Learning the trade from Commodore

With the iPad unleashed onto the world, and consumers in Europe more than happy to still pay a ridiculous amount of money for the iPhone (just compare it with the prices in the US), one starts to think what strategic genious Steve Jobs must be.
Sure, he’s playing his cards right, but haven’t we seen this all before?  Haven’t we seen a company using the very same strategy applied by Apple, some 30 odd years ago?
Right, Commodore were the ones who pulled of this trick with their massive success of the VIC-20/C64 and the cult machine, the Amiga.

Jack Tramiel knew that in order to make a difference and be able to produce and sell his computers as cheap as possible, he had to avoid the compromise-making one would normally face when assembling a piece of technology together from bits and pieces of a wide range of suppliers.  You would always have to take into consideration the limitations of each component and even use components for only 20% of their capacity, as the other 80% is incompatible with the rest.
So, Jack early on knew that in buying MOS Technologies (and he played it very hard), he would be able to create the custom chips he needed for his computers and at the same time be the key supplier of the chips to his competition like Apple (let’s not forget we’re talking late 70’s early 80’s here, where the price of  a couple of Mb’s could put your kids through high-school and not everyone had the technology to produce them).

The advantage obtained would put Commodore ahead of its competition in the 80’s and pave the way for yet another innovation from the big C= that would shock the world: the Amiga.
The Amiga is by all means the very first multi-media computer, even before the world multi-media was invented.  If you compare it to the other machines around at that time, nothing could match it.  It was the machine for DTP, graphics, gaming, … you name it and it was also introducing a way to interact with the machine that only today finds its match in Windows.  Yes, when the PC-clones eventually won the battle and became the standard for personal computers, it was actually a step back instead of a step forward (black screens with MS-DOS… ugh!)

So, is Steve playing the same tricks here?  If you compare the iPhone to the other Smartphones around, no-one beats it, but everyone copies it (or tries to).  So, in a way, the iPhone and now the iPad are the modern day Amigas.
As to the technology strategy, there’s a clear analogy again as back in the 70’s Apple teamed up with Acorn and VLSI to design a next-generation chip with greater graphics capabilities.  The result was the ARM processor, which got improved significantly by Digital Equipment Corporation (DEC), who made the StrongARM version of the ARM processor.  This got acquired by Intel to become XScale and this in turn resulted in a spin-off company named Palo Alto Semiconductor founded by the lead StrongARM engineer, which strangely turns out to be the processor company that Apple bought =)

So, it might not be as straightforward as Commodore acquiring MOS Technologies, but the principle is the same… own the key components of the production line and be able to customize it to your advantage.  They sure have learned the trade from Commodore!

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