A report in today's Financial Times examines the potential for Apple's iPod and iTunes to become the dominant platform in the music market.
It states that: "To shareholders of Apple Computer the iPod is more than a miniature music player. It is, potentially, a platform." And, as a platform, the iPod could be set to become one of "the de facto standards around which whole markets are built".
But to establish the iPod as the leading platform for digital music, Apple must not make the mistakes it made in the past. According to the FT, by keeping its software to itself while Microsoft was establishing its operating systems, and working hard to win-over software developers, Apple missed out on being a bigger player in the PC market.
The FT grants that in the case of the iPod and iTunes, Jobs seems to have learnt from this error. The report cites the recent deal with HP as proof that "Apple has made a series of moves to widen the market for the iPod".
According to Michael Cusumano, a professor of management at MIT (Massachusetts Institute of Technology), it is important that Apple continues to cooperate with companies that are making add-on products for the iPod: "The evolution of such an ecosystem of complementary products is one sign of a platform emerging is ensuring that a platform emerges."
But Harvard's David Yoffie, another professor of business, doesn't believe that the development of complementary products is enough to ensure platform leadership: "The test is whether a company is prepared to put its technology into the hands of rivals."
The report concludes that Apple must license its technology if it is to become the dominant platform. According to Cusumano: "If Steve Jobs was serious about establishing the platform for digital music he would be licensing the technology. You have to wonder whether they really understand platform dynamics."