With MobileMe, Apple Bites Off More Than It Can Chew

When Phil Schiller, Apple’s (AAPL) senior VP of Worldwide Product Marketing, introduced MobileMe onstage at the WWDC keynote in June, the audience was wowed into believing that the most stylish hardware and software company had transformed itself into a formidable Internet service provider right before its eyes.

MobileMe not only promised to be exceedingly functional - an “Exchange for the rest of us” that would synchronize our emails, contacts, calendar appointments and photos across devices using push technology - it was also exceedingly beautiful. By applying its legendary design expertise to the SproutCore JavaScript framework, Apple had created a browser-based hub that not only empowered consumers with device flexibility; it also raised the notion that Apple would become a major player in cloud computing, even if MobileMe was technically only an upgrade to the six-year-old .Mac service.

But alas, the transformation has proven itself to be more of a slog than Apple had hoped. After a false start, persistent outages, and all-around bugginess, Steve Jobs has admitted to employees in an internal email that “it was a mistake to launch MobileMe at the same time as iPhone 3G, iPhone 2.0 software and the App Store,” and “the MobileMe launch clearly demonstrates that we have more to learn about Internet services”. This is an atypical admission by a company known for its well-maintained image of impeccability. It also raises the question of whether Apple will be able to metamorphize as services and software move online around it.

Apple is certainly not without its previous Internet successes, namely the iTunes Store with its paid music and movie downloads. The store’s success appears to be why Eddy Cue, Apple’s VP of iTunes, has been put in charge of all Apple Internet services following the MobileMe mess. But it has yet to be seen whether Cue can translate his experience deploying an Web-connected desktop app within a proprietary framework (iTunes) into a more distributed, browser-based platform that competes with the likes of Live Mesh and SugarSync. And then there is the question of whether Google will ever add desktop syncing to its webtop services, competing even more directly with the MobileMe offering.

Comments

[RLLH:]

Instead of doing what it does so well, Apple is adopting some of Microsoft's hubris that it can be the best at anything it tries. Pride goeth before a fall, indeed. As a person I admire Apple's nerve, as an investor I deplore it.

2008 Aug 05 05:57 PM

[roxola:]

Apple took an idea that a phone could be as useful as a laptop and began the quest to deliver. The iPhone has been out for roughly a year and it already has a successor in the 3G iteration. MobileMe (no I would have chosen something different) was a necessary advance for Apple to embrace if this device is ever to be the enterprise success we all hope for. Did Apple bite off a bit more than it could chew on the 3G launch day...you bet and they promise to fix it. I applaud the guts and determination of this company to deliver beautiful products that work well and from an investment point of view, one couldn't ask for more.

2008 Aug 05 06:22 PM

[Doug, Mtn. ...:]

User 58276, how could you EVER compare Apple's stumble with anything Microsoft? What's APPL's response? Admit culpability and pledge to fix it. I believe SJ when he says he'll fix it. Now how has Microsoft handled its Vista debacle? By launching a $300 million advertising campaign to tell you that you are wrong, everything is just ducky, and you need to re-think your own impressions. You call that "adopting some of MSFT's hubris"?

2008 Aug 05 07:07 PM

[iphonedied:]

It's just another sign that Evil Apple wants to lock in everybody and everything through proprietary garbage. Time for the Dept of Justice to step in and have a very close look at what Apple is up to.

2008 Aug 05 08:44 PM

[turleymuller:]

I think the title should be "bit" not "bites" for the past tense is more appropriate. I am a MobileMe user, and the only issue I encountered was the service going down sporadically for a few days subsequent to the launch. Since then, MobileMe has worked fine.

It seems people, especially the media, are making this a bigger issue than it actually is. The impetus many refer to is- a rare blunder for Apple since it has a long standing reputation for quality and flawless products. The truth is that no firm/individual is immune to mistakes, and Apple has made many over the years. However, the crux of the issue is that Apple takes these matters very seriously and resolves problems quickly. That is the reason Apple enjoys a favorable reputation, any problem that arises is just a blip, that only a select few users and experience, and everyone forgets.

Other firms, such as MSFT, never fix all the problems. Just take a look at Vista. Or XP. Why does it freeze up so hard I have to yank the power cord out of the wall? Why does it constantly crash and have to be rebooted on a daily, if not hourly basis? And why does Windows take for ever to boot? These issues are not encountered with Mac OS, yet have been standard with Windows for years. That drives me nuts, I don't understand why MSFT can't develop an OS that is stable and doesn't fall apart after a year.

In my opinion, the significance of this event is Apple's commitment to rectify the issue and keep improving its products at a pace well ahead of its competitors.

2008 Aug 05 09:02 PM

[tom1234:]

it takes humble man to admit he made a mistake and a big man to correct it ---syeve jobs is A-ok in my book

2008 Aug 06 08:34 AM

[PK de C'ville:]

Actually, I hope Steve sees his accountability in MobileMe's harsh startup.

After all, Steve is beyond real when leading a product introduction (Not meaning only the stagecraft, but the years of development and production readiness before the stagecraft.).

Now, he needs to really GET the cloud's realities. When you screw up email and such, you've made a major, perhaps catastrophic 'dent' in someone's universe.

If the previous cloud leader was overconfident and pushed to launch on iPhone 3G day, he has to deal with the harsh reality of his mistake and the impact it made in many people's lives. (Apple's reputation is a secondary hit.)

Steve needs to get someone (perhaps Steve himself) to manage the cloud stuff as well as Steve manages the products.

2008 Aug 06 09:16 AM

[brewer:]

I don't use email on any subscription service, but if you ask me, the new syncing capabiities are an awesome improvement.

I put up a lot of pictures on Gallery (part of MobileMe you never hear about). That works great, I am getting so many compliments on it from family and friends. You have coverflow and quicklook features, and it behaves in a browser much as it does as a Mac app, which is pretty incredible. It is working with web standards, doesn't work in I.E. (naturally) and is really amazing, as is calendar, in that they work VERY much like iLife apps.

This is going to work, much of it has been working all along, it was just too much to roll out at one time.

MobileMe is a lot more than just email. But they will have the email working very well, just give it a little time. Not time as in 7-8 years (Microsoft sense of a little time), but as in a few weeks.

2008 Aug 06 10:13 AM

[mollytjm:]

i had a .mac account and switched to mobileme...had to change some settings but the tech person on the phone was great and everything works wonderfully.

Apple underestimated the pent up demand for the iPhone and found themselves having to handle 5 times the number of start ups, plus a new network. as good as they are, this was temporarily more than even they could manage.

but they're fast learners and the difference between apple and microsoft is that apple actually fixes things, making them better.. and they won't take 7 years either!

as an investor who prefers to buy and hold, this is a good stock, with tons of growth potential and is a financially secure, innovative, highly profitable company.

2008 Aug 06 10:51 AM