Apple Cellphone, Media Hub and Business Models

Walt Mossberg writes in the Wall Street Journal about the different approaches that Microsoft and Apple have taken with computers and digital devices.

According to Mossberg, Microsoft follows a "component model" in which many companies made hardware and software to run on a standard platform. This is true for PC's in general as well as Microsoft's Windows CE platform and the recently released Origami platform. This model produces "inexpensive commodity devices that don't always work perfectly together, but get the job done".

Apple's model has been one of "end-to-end", in which one company designs both the hardware and software "which work smoothly together, but the products cost more and limit choice."

Much of Apple's success with the iPod has been due to this end-to-end model. Some critics believe that over time, the component model will overtake the iPod as it has in the PC market, but Mossberg disagrees:

I think the end-to-end model can prevail this time, both for Apple and other companies. Consumers want choice and low prices. But they also crave the kind of simplicity and integration that the end-to-end model delivers best.

Meanwhile, almost as a sidenote, Mossberg claims that Apple "is working on other projects built on the same end-to-end model as the iPod: a media-playing cellphone and a home-media hub."

There have been ongoing rumors that Apple is working on a cellphone, so these comments may reflect those rumors. Rumors of a "home-media hub", however, have been less prevalent.