Baby Apples: How the Apple Legacy Shapes New Products

There are many "what if" stories surrounding Apple (Nasdaq: AAPL), and one of them is this: What if, when Microsoft (Nasdaq: MSFT) asked Apple to license its OS, Apple had done so, becoming the core technology in Windows instead of a closed platform.

If that had happened, it is widely believed, Apple would be larger than Dell now, rather than smaller than Acer. But who knows, maybe the result would have been that Apple would be gone altogether, because they certainly had huge execution problems in the 1990s, and their closed platform actually helped them survive those hard times.

Because of all of the layoffs, however, ex-Apple people are all over the industry doing incredible things for others based on what they learned at Apple, and the massive Apple marketing engine has created a growing number of Apple imitators. I'll start with the most provocative first.

Gateway's Next-Gen iPod

Last Thursday Gateway launched what looks to me like the iPod of the next-generation. Sales data suggests that people want a mini-sized produce, and there has been wide speculation that Apple would be launching a color version of an iPod for some time. With Apple's launch last week, a color display is now the cool new feature. A vendor anticipating these trends would be motivated to get ahead of the curve and bring out a mini product with a color screen.

But what Apple announced was two large iPods, one black and red without the color screen (that makes you wonder if a black iMac is coming), and a big white one with a color display. There is little doubt that next year there will be an iPod Mini with a color screen.

Gateway, however, already has the first product that is ahead of the Apple design curve, and it did this by anticipating, rather than responding to, Apple.

So, largely thanks to Apple, you can either wait for the product you want next year or you can buy Gateway's small, silver, 4 GB, MP3 Photo Jukebox this year and have something closer to what you want for Christmas. Or you can settle for something less.

In the end, Apple helped create the right product at the right time, but Gateway will benefit from it.

OQO: Tomorrows Laptop Today

OQO launched two weeks ago, and the team that designed this ultra-small computer is the same team that created the Apple Itanium notebook. The OQO product is the first fully functional laptop computer you can put in your pocket. Think of it as a wedding between a laptop and a RIM.

Much like the original Mac, the OQO won't appeal to everyone: It is for those few who dream of something different, who want a product that is ahead of the curve and need a second computer that can go with them everyplace they go without breaking their backs.

Designed for e-mail warriors, it provides a more complete experience than a RIM and is more portable than any other laptop in the segment. Sony has a similar product on the market in Japan, and this product is expected to move to the U.S. and Europe as well, but it lacks a keyboard. For e-mail , a keyboard is clearly a requirement.

This is a product that lends itself to imagination, and part of that imagination involves accessorizing. Just as the iPod is now largely defined by the accessories market that has grown up around it, the OQO can become more capable when used with other things -- wireless keyboards (Think Outside makes a great wireless Bluetooth keyboard), wireless phones, and wireless access points. Of course, what would really be cool would be a foldable screen and a fuel cell for power, but those are still at least 24 months out.

We don't often get to see the birth of a new product class, and the birth of this one, at least for me, is one of the most exciting moments this year.

Computer for the Developing World

The original Apple II was the computer for the masses. It launched Apple into a position of dominance in the emerging personal computer space, and they held that dominance until 1995 when an error in judgment cost them the market.

Two weeks ago Microsoft and AMD (NYSE: AMD) launched a revolutionary new personal computer called the Personal Internet Communicator. Costing $185 before subsidy -- and designed to be subsidized by local ISPs -- it is positioned to meet the needs of emerging world markets. One of the biggest needs in these countries is affordability.

It is hard for us to realize that in these markets an annual income of US$10,000 is representative of the middle class, and large portions of the population make $1,000 a year or less. In these economies, a $1,000 computer is as expensive as an automobile is for us -- or similar to what computers cost in the U.S. before the Apple II.

To make this computer work required AMD and Microsoft to rethink the entire platform, just as Apple rethought the computer. The product is nearly solid state (semi-hardened), resistant to moisture and dirt, passively cooled and incredibly hard to break. Even the OS is unique: It is based on Microsoft's CE platform but looks like XP. Most viruses won't even run on it. The user is limited to the applications supplied by the hosting company. Should the user break something in software, simply rebooting the product should fix the problem because rebooting restores the critical services and applications.

In my mind there are lots of kids, retirees and even general users who simply want a computer that does the basics, almost never breaks, and can be corrected in most cases with a simple reboot. The PIC may be the new Apple II, and it owes its existence to the core concept that launched Apple, even though Apple doesn't, itself, adhere to that concept today. A computer for the masses: I wonder what would happen if Apple embraced that concept again?

Apple's Future

Regardless of what happens with Apple, the ideas, employees and history of the company will live on. The market has been incredibly enriched by this company, which is now transitioning into something new. But as they transition, companies like Gateway, OQO, AMD and even Microsoft are executing on many of the ideas and concepts that originated at Apple.

And this is far from an exhaustive list. There are other firms -- such as Orb Networks, White Box Robotics, Palm One and Sonos, which I'll cover in later columns -- that are doing things just as innovative as the Apple II was in its day and that are connected to Apple through design, ex-employees or core concepts.

Sometimes it really is about a place in history, and Apple's place is now founded on the success of its children, each of whom are showcasing innovation in new and incredibly creative ways. As children often do, one may eventually grow to eclipse the parent.

Addendum: After this column was published, a reader pointed out that pictures of all of the new little portable computers are available at Handtops.com.