Six months ago an Apple analyst told me he thought the company's long-term goal was to become the internet's cable TV company. I didn't get it then. I really get it now. Most think of Apple as a computer or consumer electronics company. I think that's becoming a means to a much bigger end: becoming a giant news, entertainment and communications network with Googillian ambitions.
Most of its money still comes from selling computers, iPhones, iPods and iPads. But with its move into advertising, the spike in revenue from selling iPhone aps (four billion downloads and counting), as well as its move to take a percentage of book and other content sales on the iPad have NEW MEDIA COMPANY written all over them. It is moving to build the self-perpetuating effects that come with such a platform with astonishing speed.
The portals like Yahoo tried this. Their mistake? They didn't make iPhones or iPads. Turns out, desktop and laptop computers and existing cell phones are lousy at consuming content. Everyone keeps running into the "lean forward lean back" problem. Computers are lean forward devices, but lousy entertainment machines. TVs are great to watch a movie on but lousy at doing email or web surfing.
The iPhone and probably the iPad are the first devices that truly solve this fundamental problem of media convergence. Probably because of their portability and touch screen, we are just as happy to do email and web surf as we are to lean back and watch a video or a movie with handheld, touch-screen devices.
I'll leave the goodness or badness of Apple's ambitions to others. What is not debatable however is that what Apple is doing has the potential to be a colossally huge business.
Cable TV companies' are always constrained by their capital costs (laying and maintaining all that cable). Apple has none of those worries. I appears that for the moment all it has to do is keep making killer devices and software and the rest will take care of itself.
Devices like the iPad and iPhone generate audience, which attracts advertisers (a business Apple just said it was plunging into), which attracts content. It doesn't hurt that Apple has proven to be one of the few online platforms capable of charging for digital content.
We can debate the pros and cons of Apple's proprietary standards — as we have, and are — endlessly. As a matter of principal I don't like them. Practically, they make things so easy that I'm not sure I care. Maybe Google's model — control the software and let everything else take care of itself — will prove to be a better model.
But that was Microsoft's model too, and we all know how happy we were about that. Maybe in the long term Apple's platform will be popular enough, the content good enough and devices usable enough that it won't have to lock us in.
What is clear is that with each passing day Steve Jobs is looking less and less like Sony's co-founder Akio Morita and more and more like CBS's Bill Paley — the man credited with inventing network television.
That is a very big deal indeed.
Fred Vogelstein is writing a book about the intersection of media and tech in Silicon Valley.
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