Before the iPhone Was Apple's Digital Hub Strategy

Steve Jobs returned to Apple in 1996. At the time, most people had a digital camera, like the Canon Elph that was released that year and maybe a digital video camera and probably a computer and about 16% of Americans had a cell phone at the time. Some had a voice recorder, a Diskman, some in the audio world had a four track machine. Many had CD players and maybe even a laser disk player.  But all of this was changing. Small, cheap microprocessors were leading to more and more digital products. The MP3 was starting to trickle around after being patented in the US that year. Netflix would be founded the next year, as DVDs started to spring up around the world. Ricoh, Polaroid, Sony, and most other electronics makers released digital video cameras. There were early e-readers, personal digital assistants, and even research into digital video recorders that could record your favorite shows so you could watch them when you wanted. In other words we were just waking up to a new, digital lifestyle. But the industries were fragmented.  Jobs and the team continued the work begun under Gil Amelio to reduce the number of products down from 350 to about a dozen. They made products that were pretty and functional and revitalized Apple. But there was a strategy that had been coming together in their minds and it centered around digital media and the digital lifestyle. We take this for granted today, but mostly because Apple made it ubiquitous.  Apple saw the iMac as the centerpiece for a whole new strategy. But all this new type of media and the massive files needed a fast bus to carry all those bits. That had been created back in 1986 and slowly improved on one the next few years in the form of IEEE 1394, or Firewire. Apple started it - Toshiba, Sony, Panasonic, Hitachi, and others helped bring it to device they made. Firewire could connect 63 peripherals at 100 megabits, later increased to 200 and then 400 before increasing to 3200. Plenty fast enough to transfer those videos, songs, and whatever else we wanted. iMovie was the first of the applications that fit into the digital hub strategy. It was originally released in 1999 for the iMac DV, the first iMac to come with built-in firewire. I’d worked on Avid and SGI machines dedicated to video editing at the time but this was the first time I felt like I was actually able to edit video. It was simple, could import video straight from the camera, allow me to drag clips into a timeline and then add some rudimentary effects. Simple, clean, and with a product that looked cool. And here’s the thing, within a year Apple made it free. One catch. You needed a Mac. This whole Digital Hub Strategy idea was coming together. Now as Steve Jobs would point out in a presentation about the Digital Hub Strategy at Macworld 2001, up to that point, personal computers had mainly been about productivity. Automating first the tasks of scientists, then with the advent of the spreadsheet and databases, moving into automating business and personal functions. A common theme in this podcast is that what drives computing is productivity, telemetry, and quality of life. The telemetry gains came with connecting humanity through the rise of the internet in the later 1990s. But these new digital devices were what was going to improve our quality of life. And for anyone that could get their hands on an iMac they were now doing so. But it still felt like a little bit of a closed ecosystem.  Apple released a tool for making DVDs in 2001 for the Mac G4, which came with a SuperDrive, or Apple’s version of an optical drive that could read and write CDs and DVDs. iDVD gave us the ability to add menus, slideshows (later easily imported as Keynote presentations when that was released in 2003), images as backgrounds, and more. Now we could take those videos we made and make DVDs that we could pop into our DVD player and watch. Families all over the world could make their vacation look a little less like a bunch of kids fighting and a lot more like bliss. And for anyone that needed more, Apple had DVD Studio Pro - which many a film studio used to make the menus for movies for years. They knew video was going to be a thing because going back to the 90s, Jobs had tried to get Adobe to release Premiere for the iMac. But they’d turned him down, something he’d never forget. Instead, Jobs was able to sway Randy Ubillos to bring a product that a Macromedia board member had convinced him to work on called Key Grip, which they’d renamed to Final Cut. Apple acquired the source code and development team and released it as Final Cut Pro in 1999. And iMovie for the consumer and Final Cut Pro for the professional turned out to be a home run. But another piece of the puzzle was coming together at about the same time. Jeff Robbin, Bill Kincaid, and Dave Heller built a tool called SoundJam in 1998. They had worked on the failed Copeland project to build a new OS at Apple and afterwards, Robbin made a great old tool (that we might need again with the way extensions are going) called Conflict Catcher while Kincaid worked on the drivers for a MP3 player called the Diamond Rio. He saw these cool new MP3 things and tools like Winamp, which had been released in 1997, so decided to meet back up with Robbin for a new tool, which they called SoundJam and sold for $50.  Just so happens that I’ve never met anyone at Apple that didn’t love music. Going back to Jobs and Wozniak. So of course they would want to do something in digital music. So in 2000, Apple acquired SoundJam and the team immediately got to work stripping out features that were unnecessary. They wanted a simple aesthetic. iMovie-esque, brushed metal, easy to use. That product was released in 2001 as iTunes. iTunes didn’t change the way we consumed music.That revolution was already underway.  And that team didn’t just add brushed metal to the rest of the operating system. It had begun with QuickTime in 1991 but it was iTunes through SoundJam that had sparked brushed metal.  SoundJam gave the Mac music visualizers as well. You know, those visuals on the screen that were generated by sound waves from music we were listening to. And while we didn’t know it yet, would be the end of software coming in physical boxes. But something else big. There was another device coming in the digital hub strategy. iTunes became the de facto tool used to manage what songs would go on the iPod, released in 2001 as well. That’s worthy of its own episode which we’ll do soon.  You see, another aspect about SoundJam is that users could rip music off of CDs and into MP3s. The deep engineering work done to get the codec into the system survives here and there in the form of codecs accessible using APIs in the OS. And when combined with spotlight to find music it all became more powerful to build playlists, embed metadata, and listen more insightfully to growing music libraries. But Apple didn’t want to just allow people to rip, find, sort, and listen to music. They also wanted to enable users to create music. So in 2002, Apple also acquired a company called Emagic. Emagic would become Logic Pro and Gerhard Lengeling would in 2004 release a much simpler audio engineering tool called Garage Band.  Digital video and video cameras were one thing. But cheap digital point and shoot cameras were everwhere all of a sudden. iPhoto was the next tool in the strategy, dropping in 2002 Here, we got a tool that could import all those photos from our cameras into a single library. Now called Photos, Apple gave us a taste of the machine learning to come by automatically finding faces in photos so we could easily make albums. Special services popped up to print books of our favorite photos. At the time most cameras had their own software to manage photos that had been developed as an after-thought. iPhoto was easy, worked with most cameras, and was very much not an after-thought.  Keynote came in 2003, making it easy to drop photos into a presentation and maybe even iDVD. Anyone who has seen a Steve Jobs presentation understands why Keynote had to happen and if you look at the difference between many a Power Point and Keynote presentation it makes sense why it’s in a way a bridge between the making work better and doing so in ways we made home better.  That was the same year that Apple released the iTunes Music Store. This seemed like the final step in a move to get songs onto devices. Here, Jobs worked with music company executives to be able to sell music through iTunes - a strategy that would evolve over time to include podcasts, which the moves effectively created, news, and even apps - as explored on the episode on the App Store. And ushering in an era of creative single-purpose apps that drove down the cost and made so much functionality approachable for so many.  iTunes, iPhoto, and iMovie were made to live together in a consumer ecosystem. So in 2003, Apple reached that point in the digital hub strategy where they were able to take our digital life and wrap them up in a pretty bow. They called that product iLife - which was more a bundle of these services, along with iDVD and Garage Band. Now these apps are free but at the time the bundle would set you back a nice, easy, approachable $49.  All this content creation from the consumer to the prosumer to the professional workgroup meant we needed more and more storage. According to the codec, we could be running at hundreds of megabytes per second of content. So Apple licensed the StorNext File System in 2004 to rescue a company called ADIC and release a 64-bit clustered file system over fibre channel. Suddenly all that new high end creative content could be shared in larger and larger environments. We could finally have someone cutting a movie in Final Cut then hand it off to someone else to cut without unplugging a firewire drive to do it. Professional workflows in a pure-Apple ecosystem were a thing.  Now you just needed a way to distribute all this content. So iWeb in 2004, which allowed us to build websites quickly and bring all this creative content in. Sites could be hosted on MobileMe or files uploaded to a web host via FTP. Apple had dabbled in web services since the 80s with AppleLink then eWorld then iTools, .Mac, and MobileMe, the culmination of the evolutions of these services now referred to as iCloud.  And iCloud now syncs documents and more. Pages came in 2005, Numbers came in 2007, and they were bundled with Keynote to become Apple iWork, allowing for a competitor of sorts to Microsoft Office. Later made free and ported to iOS as well. iCloud is a half-hearted attempt at keeping these synchronized between all of our devices.  Apple had been attacking the creative space from the bottom with the tools in iLife but at the top as well. Competing with tools like Avid’s Media Composer, which had been around for the Mac going back to 1989, Apple bundled the professional video products into a single suite called Final Cut Studio. Here, Final Cut Pro, Motion, DVD Studio Pro, Soundtrack Pro, Color (obtained when Apple acquired SiliconColor and renamed it from FinalTouch), Compressor, Cinema Tools, and Qmaster for distributing the processing power for the above tools came in one big old box. iMovie and Garage Band for the consumer market and Final Cut Studio and Logic for the prosumer to professional market. And suddenly I was running around the world deploying Xsan’s into video shops, corporate taking head editing studios, and ad agencies Another place where this happened was with photos. Aperture was released in 2005 and  offered the professional photographer tools to manage their large collection of images. And that represented the final pieces of the strategy. It continued to evolve and get better over the years. But this was one of the last aspects of the Digital Hub Strategy.  Because there was a new strategy underway. That’s the year Apple began the development of the iPhone. And this represents a shift in the strategy. Released in 2007, then followed up with the first iPad in 2010, we saw a shift from the growth of new products in the digital hub strategy to migrating them to the mobile platforms, making them stand-alone apps that could be sold on App Stores, integrated with iCloud, and killing off those that appealed to more specific needs in higher-end creative environments, like Aperture, which went ended in 2014, and integrating some into other products, like Color becoming a part of Final Cut Pro. But the income from those products has now been eclipsed by mobile devices. Because when we see the returns from one strategy begin to crest - you know, like when the entire creative industry loves you, it’s time to move to another, bolder strategy. And that mobile strategy opened our eyes to always online (or frequently online) synchronization between products and integration with products, like we get with Handoff and other technologies today.  In 2009 Apple acquired a company called Lala, which would later be added to iCloud - but the impact to the Digital Hub Strategy was that it paved the way for iTunes Match, a  cloud service that allowed for syncing music from a local library to other Apple devices. It was a subscription and more of a stop-gap for moving people to a subscription to license music than a lasting stand-alone product. And other acquisitions would come over time and get woven in, such as Redmatia, Beats, and Swell.  Steve Jobs said exactly what Apple was going to do in 2001. In one of the most impressive implementations of a strategy, Apple had slowly introduced quality products that tactically ushered in a digital lifestyle since the late 90s and over the next few years. iMovie, iPhoto, iTunes, iDVD, iLife, and in a sign of the changing times - iPod, iPhone, iCloud. To signal the end of that era because it was by then ubiquitous. - then came the iPad. And the professional apps won over the creative industries. Until the strategy had been played out and Apple began laying the groundwork for the next strategy in 2005.  That mobile revolution was built in part on the creative influences of Apple. Tools that came after, like Instagram, made it even easier to take great photos, connect with friends in a way iWeb couldn’t - because we got to the point where “there’s an app for that”. And as the tools weren’t needed, Apple cancelled some one-by-one, or even let Adobe Premiere eclipse Final Cut in many ways. Because you know, sales of the iMac DV were enough to warrant building the product on the Apple platform and eventually Adobe decided to do that. Apple built many of these because there was a need and there weren’t great alternatives. Once there were great alternatives, Apple let those limited quantities of software engineers go work on other things they needed done. Like building frameworks to enable a new generation of engineers to build amazing tools for the platform! I’ve always considered the release of the iPad to be the end of era where Apple was introducing more and more software. From the increased services on the server platform to tools that do anything and everything. But 2010 is just when we could notice what Jobs was doing. In fact, looking at it, we can easily see that the strategy shifted about 5 years before that. Because Apple was busy ushering in the next revolution in computing.  So think about this. Take an Apple, a Microsoft, or a Google. The developers of nearly every single operating system we use today. What changes did they put in place 5 years ago that are just coming to fruition today. While the product lifecycles are annual releases now, that doesn’t mean that when they have billions of devices out there that the strategies don’t unfold much, much slower. You see, by peering into the evolutions over the past few years, we can see where they’re taking computing in the next few years. Who did they acquire? What products will they release? What gaps does that create? How can we take those gaps and build products that get in front of them? This is where magic happens. Not when we’re too early like a General Magic was. But when we’re right on time. Unless we help set strategy upstream. Or, is it all chaos and not in the least bit predictable? Feel free to send me your thoughts! And thank you…