Back in August 1995, Microsoft launched its long-awaited, new at that time, operating system, Windows 95, to much industry anticipation. The company had delayed all year long, and eventually Bill Gates announced it to the world at Windows World 95 to the tune of the Rolling Stones’ “Start Me Up”. Media coverage cemented Microsoft’s total grab of all that once differentiated the Apple Mac.

Meanwhile, Netscape had been formed the year before, and was creating a market storm. No sooner had Windows 95 launched, than Gates realised the real war was going to be waged elsewhere – not on the desktop, but on the internet.   

What I witnessed between August 1995 when Microsoft, based significantly in Seattle, not Silicon Valley, and 7 December 1995, only four months later, was a complete repositioning in the market of a company which dominated the desktop - a repositioning of that desktop software company to engage with, pursue, and eventually position itself to dominate the internet – a disruptive, new technology of unknown impact. By early December, only four short months later, when Microsoft announced its internet strategy, Windows 95 had been long forgotten, and Microsoft worked feverishly not to become obsolete as the industry move to the next curve, with or without Microsoft, leaping from the inflection point called the internet. Bill Gates released his book, The Road Ahead, which sought to outline what his company would need to do to say ahead of the curve.

The experience of seeing an industry giant such as Microsoft shift into overdrive mode, move all of the deck chairs from one side of the ship to another, in a very large organisation was an experience that has made a permanent impression in my mind.  It was the lack of proximity to the ideas brewing and exploding in Silicon Valley which many credited with Microsoft’s missing of the early signs that the internet was going to change our lives and businesses forever. Regardless, even if it was not the first to internalise the widespread change upon us in early 1994, the firm moved swiftly to reposition itself in the game. And due to the enormous advantages it had, Microsoft was able to catch up and lead.

Netscape  had come to symbolise the internet as the first browser surged through 1995, but then Microsoft Internet Explorer, a competing browser, dramatically usurped Netscape Navigator’s position as the de facto browser throughout the late 1990s until Netscape was swallowed up by AOL. Nobody talks about Netscape these days at all. Microsoft’s enemies took the battle to court with many lawsuits but Microsoft’s position was that it could not be stopped from innovating its own platform. 

Something eerily similar is happening in the music industry today. The gorillas of the old record empire have been smugly running their empires while a new music industry has grown up beside them barely giving them a glance. Can they wake up in time? Or are we witnessing the wholesale destruction of an industry with the emergence of its successor? Can the deck chairs be shifted or has the ship already started to dive?  Has Guy Hands’ Terra Firma bought a dinosaur in EMI?

If you were to build the music industry today from a clean sheet of paper, you would build an ecosystem of companies with single propositions and business models rather than a series of oligopoly record labels which dominate the industry. The artists who create music and how they are managed is a different discipline and skillset than what’s required to distribute their creations. 

The new power players in the music industry – such as Apple - are those companies who do one or the other, not both. Apple distributes to consumers because it had an insight into how people wanted to listen to music. The early bullseye gave market power – the ability to fix the price of a single as one example.

Companies such as IndependentIP out of Amsterdam are core to the new music industry. You could call them a software asset management company. Basically it connects in a “Linked In”-like fashion someone who creates music with someone who consumes music. In Web 1.0 it would have been called a supply chain company, but today it is a supply matrix company, enabling “many to many” combinations through the FUGA platform. It is agnostic to inputs and outputs, but is the essential “switch” through which music labels and music consumers will deal with each other. 

If I’m a new independent artist, I select all of the rules for distribution in the FUGA system, and IndependentIP automates and manages my song. The company offers an entire toolset to handle not just delivery, not just asset management, not just reporting, not just contract management – all of it.  And there can’t be incompatibility issues in working with FUGA. Whoever wins in terms of distributors or artists or labels, FUGA wins because of the network-orientation. We live in a world which is no longer an “or” market, but an “and and and” one.

Whereas the internet was the disruptive technology which caught Microsoft unawares, the ecosystem and its implicit network-orientation to business models is what is surprising many established businesses today, particularly in the music and content industries. Witness the following three examples:

Think of TheBizmo – an online store to sell digital and physical products. It just demonstrated the first case ever of a song reaching the charts by digital sales outside of iTunes. The key insight is to enable people to sell the music they love online, or sell on to their friends and other people who like the same music, enabling me to make money as a retailer of my music online. This network-orientation to music  - in this case, one to many - will continue grow. What is game-changing about it however, is that the economics shift around the circle for the distribution to include “me”.   

Think of Lickerish, which is changing the face of celebrity photography. Whereas a couple of giant media brands dominate celebrity content, publications around the world who can’t necessarily shoot the big stars want to shoot them. Lickerish creates a transaction around the ecosystem of players who come together for a photoshoot. By giving the celebrity a cut of future revenue which is new, or cutting them into the revenue line, they secure the buy-in of the celeb to the cost line in the P&L for that transaction. So he/she takes a cab rather demanding a Rolls Royce to get to the shoot.   Lickerish manages the vault of celebrity imagery as well, but what the insight is, is that if you align interests around the goal for everyone, you make the transaction the most profitable.

Think of Monitise, the mobile banking services firm, built out of the City of London, and run by Alastair Lukies, who had the epiphany that there was a problem with every other mobile banking proposition in the market because banks weren’t at the centre of the ecosystem; they were mobile carrier-centric. And yet banks were where people put their money. The clever part of Monitise’s “go to market” strategy was to not create parallel or alternative structures or to try to change banks, but rather to enable them.   

Today you can access your current account at HSBC, Royal Bank of Scotland, First Direct, Alliance & Leicester – 60 per cent of the UK banking market, via your mobile phone. In the US, Monitise works with 9,000 banks through Metavente, its US joint venture. You can check your balance, top up your Oyster card, and transfer funds to your daughter’s account. Soon you will be able to make payments from your phone. Monitise is winning because it takes care of all of the players in its ecosystem, and so everyone is aligned in wanting to grow the volume of mobile banking transactions. It sits in the middle taking a cut of everyone which goes through their switch.

In 2008, the network is the disruptive technology. And business models follow where technology wedges open a new battleground. The winners in this next phase will be those who take care of the ecosystem in which they operate. The world has become implicitly “win/win”. I can’t win at your expense. Rather, I have to anticipate your behaviour and align our objectives.

Microsoft jumped to the next curve in 1995, and “caught up”. The music industry is going through its “come to Jesus” moment now. To survive they must downsize and redefine what they are as an industry as they are being redefined by the entrepreneurs who are busting into their space – the IndependentIPs, the Bizmos, the Lickerishes – to name a few. 

Never has David and Goliath been such an even match.

For long enough widgets have been a cool, ‘nice-to-have’ way to get information to your desktop, publish your music and video interests or photos online or to get people to interact with you in the social networking sites, but TheBizmo now is set to change that by making its users money.

TheBizmo widget is brought to us by the developers behind Groove Mobile – the world’s largest digital download platform with the aim of making consumers and content owners into business partners. TheBizmo simply describe its widget as “the music industry in a box” because it turns the consumer into the retailer.

While existing social network widgets enable users to indicate their interests, they lack the financial opportunity their recommendations open up. TheBizmo is a fully functional media player which offers users the opportunity to discover and promote both user generated and mainstream media content, and in so doing, earn from their discovery and interests as they engage their friends and networks.

TheBizmo works because it offers artists a genuine (and free) marketing tool, putting their content in the hands of the people who use and promote their content the best – their fans. Unsigned bands benefit as much as the mainstream label-backed groups because TheBizmo puts them on a equal platform. As MySpace has become a quasi-search ground for talent, TheBizmo takes this phenomenon and puts the mechanics of a turnkey store behind it, delivering the content to your PC and mobile.

The “music industry in a box” analogy describes TheBizmo perfectly because as a one-stop shop TheBizmo enables users to buy the track(s) they like and the ticket(s) to see the band perform. Put into context, one of London’s leading independent music promoters FeedMe Music has just announced that they are now using TheBizmo’s pioneering new widget to sell ‘e-tickets’ for their events. Gig goers can instantly buy tickets to FeedMe events simply by inputting their ticket requirements into the widget and receiving a text message as an e-ticket to their mobile phone. In addition to this, users are also sent a bar-coded PDF ticket to their email address.

A unique function of the widget is that is can be easily implemented into any digital space – MySpace, FaceBook, personal blogs - and instantly empowers artists and promoters to start selling their own digital content and gig tickets directly to their fans. Implementing the widget requires no technical knowledge whatsoever. A simple cut and paste, and fans and artists have instant access to the music widget at all times.

At Ariadne, we get to see a lot of technology and services with no real focus or user benefit, but we were impressed with TheBizmo because it brings together all the stakeholders in the value chain with a simple yet powerful discovery and monetisation tool. Dave Grenfel, managing director at FeedMe Music agrees.

“The widget is amazing. So easy to use and implement, providing both bands and us as promoters with an instant and powerful viral marketing tool,” he said.

We see TheBizmo as the biggest step change in music since iTunes, which revolutionised music in the 21st century. As Last.fm and MySpace have proved, the power of music and content is best harnessed by the fans and TheBizmo now takes this power and adds monetisation – an industry win-win.

By David Scholtz, associate, Ariadne Capital

If you spend time in virtually any financial or business centre in the world, you will see people picking up their email, usually on a BlackBerry or similar smartphone mobile device. When the BlackBerry was first introduced to the UK, people didn’t want it, companies wouldn’t pay for it and BlackBerry couldn’t sell it.   

The early adopters were the road warriors who had a real need for email anywhere and on the go.    Overtime, UK businesses adopted and accepted enterprise mobile email because of its convenience and productivity boost, making it a ubiquitous solution. There has not, until now with Momail’s new service, been a mobile email solution that offers the same ubiquitous potential for the even larger consumer market.

Mobile email is actually not a terribly new concept. Ericsson, Nokia and others have had email clients pre-installed on their phones for many years already. What has hampered the adoption of mobile email outside of the office was the perceived complexity to set up and maintain it, the cost of data and the inability to manage the download and use of attachments and large files. Enterprise mobile email was so successful because the majority of businesses used enterprise email solutions, be that Microsoft’s Outlook, IBM’s Lotus or another enterprise solution to which the mobile email could be “strapped” on. The cost per seat in the enterprise model was justifiable through scale. 

Outside of the office, people had to buy an expensive phone and pay a premium to the operators to have emails delivered to that email-enabled smartphone/BlackBerry. The fact that there are a growing number of people who have elected to pay the premium shows how much consumers really do want and are ready to receive their emails - wherever they are - anytime - as long as the costs are predictable and the experience is right. Having understood this market need, Momail has developed a new ubiquitous consumer solution that is simple, cheaper and smarter which works on normal consumer handsets.

Email is as much a data management tool as a communication tool today. Webmail has enabled people to store their documents, files and photos in ‘the cloud’, making them accessible at any internet-enabled computer to edit, resend or review. Mobile email is an extension of this data management capability. In 2005, the second and third most popular WAP destination sites in the US were Yahoo Mail and MSN mail respectively. Only accessing the weather was deemed more important than getting your email live through your mobile phone.   

Just as email was the original killer application for the web, mobile email becomes the mobile web killer app when it is available on any phone, free of subscription fees, cheap to access without tariffs or while roaming, fast to download and operator independent. That is, when it’s easy, then it becomes ubiquitous.

Most consumer solutions to date have required a mobile application download, are data heavy and a decent technical savviness is needed to install and use. Momail’s tagline: “Free mobile mail for everyone” captures its power and is a reality. You can have a technology phobia and still use Momail.   

What was the game change? Momail makes use of the existing email client available on most mobile phones. This means that users do not need to download and install an application to their phone. One just registers by providing one's country, mobile number, model of phone and operator via Momail’s web or WAP site. Then, Momail does the rest. One SMS confirms handset ownership, while a second  automatically configures the data, email and access settings. At that point, the user can add their favourite email accounts (Yahoo, .mac, Gmail, Hotmail or ISP/Pop3) which Momail can pick-up and deliver to their phone. Momail really comes into its own at this point since there are some key features that make it stand out including:

Dynamic sending – If one has multiple email accounts delivered to Momail as ‘portfolio executives’ may easily have, when replying, Momail automatically uses the correct sender email address.

• Reduced Data – The Momail service minimises the data required to receive emails by up to 99 per cent, thus making it faster and cheaper to use Momail email than any other solution.
• Optimised Attachments – Momail adapts and optimises all email specifically for the make and model of handset including attachments. It is capable of converting MSWord and PDF to text which can be read directly on the phone and can optimise 40 different graphic file types. Users can therefore customise how attachments are handled on their device, for example photo attachments are optimally adapted for best fit to the specific phone and then automatically restored to original quality when forwarded on or viewed on a PC.
• True Momail – makes sending email as easy as sending an ordinary SMS using regular mobile numbers rather than an email addresses
• Spam Filtering – Momail’s server side processing performs spam filtering to ensure you only receive the emails you want.
• Push Capable – Momail system provides push technology in networks [who allow it] and to capable devices so that emails can be received automatically to the phone without the need for send and receive.

The target market for consumer mobile email is potentially enormous. Think of the teacher on a school trip who wants to keep in touch with their personal email while away or the university student with a night job who wants cheap email on the go to handle their schedule, projects and social life. Momail finally brings these possibilities to the users simply, cheaply and smartly.

Please do let us know if you have tested the service and what you think, and tell a friend.

If you would like to sign up to be an Ariadne Beta Tester, please email betatesters@ariadnecapital.com

By Julie Meyer and David Scholtz, Ariadne Capital

One of the interesting aspects of working at Ariadne is getting to see a staggeringly wide variety of ideas and innovation. But just occasionally something comes along that makes you stop and think about some of the very bedrock technology innovation.  This happened earlier in the week when a piece hit the news wires about the Japanese government initiating a project to replace the internet with a  new technology by 2020 (some of the headlines during the week put it more sensationally “Japanese government plans to scrap internet”).

Wow, replace the internet, that sounds an ambitious project. Why would anyone want to do that? Well, there are things wrong with the internet as it is: lack of effective quality-of-service, security bolted on at various layers, power consumption of the billions of components, to name a few.  But ripping it up and starting again as the headlines imply is not the  way to go about it. Having two separate parallel networks? No thanks. Having an alternative network architecture driven out of a single government’s initiative to get an edge economically? This is counter to the whole meaning of the internet.

The internet has survived and thrived today because its underlying TCP/IP architecture has be able to embrace change. One part can be replaced or added  without effecting everything else.  At the bottom of the internet stack, faster physical transports have been developed and deployed without affecting the overall network - your dial-up modem has been no doubt now replaced by ASDL broadband and will, in future, be replaced by another faster technology such as VSDL, but it is still the same universal internet you are connected to.

At the higher levels of the stack innovation has flourished at a staggering rate. Simple application protocols such as Gopher and Veronica of the early 1990s have been superseded by http, enabling the web as we now know it. The universal addressing and transport of the internet has built entire industries, and continues to spawn more new and previously uncontemplated businesses.

This is the wonderful thing about the internet: as a universal platform it has fostered unprecedented innovation. The pace of change is set to continue with the initiatives around the semantic web and new technologies allowing for the distribution of computing around the network and hence blurring the boundary between computer and network.

The future of the internet, the platform that has been the powerhouse behind growth and innovation for the last 25 years, depends on evolving it and reinventing from within to remain the single open, universal network, not on ripping it up and starting again or building a second network.

By Fraser Harding, Ariadne's CTO in residence

Is today’s computing paradigm, which has evolved over decades from the single central processing unit to networked or virtualised processing units, on which ‘applications’ are loaded and interact with ‘files’, but otherwise remained basically the same, adequate for tomorrow’s computing requirements?

Visions of ubiquitous computing and ambient computers have been with us for quite a while, mostly created by companies who would like to sell us the wall that turns into a large display, the coffee table that becomes an interaction device, the clock that announces important news, the mobile device with access to a slew of functions. 

Imagine, however, your grandmother trying to install that coffee table: “Please select the SSID for your network”, “Please assign a unique name to this table”, “Please select your server from the list of available servers”, “Please select your proxy settings”, “Select the applications that will run on this device” ... 

Clearly today’s network architecture is not ideal for handling all the devices around us that will be always ‘on’ and will interact with us and with other devices.  What is needed is an environment where there are no more servers and clients, no more applications that start and stop, no more files or documents that are saved, but rather a continuum where objects just exist and interact and are modified according to the environment, where data is not ‘saved’ but rather ‘exists.’ Each device is part of a whole doing things according to its own capabilities.  A ‘matrix’, if you will, just like in the film, where a world just exists and evolves.

For this to happen, several conditions need to be met:

- Data has to exist on the network, and not on one particular device or cluster. Google’s implementations have been impressive in this area.  Once, a whole Google data centre burnt down and users didn’t even noticed.

- Devices of all sorts (from the powerful laptop to the mobile phone to the clock on the wall) have to identify themselves to the network, communicate their inherent capabilities, and run the same functions at different levels according to what they are able to do.

- ‘Applications’, just like data, have to exist on the network and not ‘run’ on a specific processor. They have to split themselves between the powerful servers on the network and the user devices according to device capabilities and availability.  An ‘application’ has to be available from any device and has to be able to switch from one to another without any problems.

Now your grandmother can start writing you a letter on her desktop computer, and then move to the lounge where she can visualise and slightly modify the same letter on the display of the coffee table, without worrying about where she ‘saved’ the letter and without telling the coffee table how to connect to the rest of the network.

Science fiction?  Not really. A very exciting start-up (and Ariadne Capital’s newest portfolio company) by the name of GravityZoo has designed the architecture that will make this new paradigm a reality on the internet. With GravityZoo it is possible have an application ‘exist’ on a huge cluster of computers, and it is possible to access it from a PC at one moment, another PC in the next moment, and a mobile phone in the next.  Imagine, as a realistic scenario, that OpenOffice is “GravityZooed;” it becomes a suite of applications that are always available, with various levels of functionality depending on the capability of the access device.

Isn’t this just a web operating system?  Not really.  We are not talking about a complex application running at a data centre and a browser accessing it.  If everything was possible with a browser, surely Google Earth, Skype or Second Life would not force you to download complex applications in order to use their services.  This is technology that makes individual devices and servers irrelevant.  This links the whole network together into a ‘Matrix’.

By Julie Meyer and Jem Eskenazi, Ariadne Capital

With the Dow seeing its biggest one-day drop in three years, ending about 400 points lower after plummeting more than 500 points earlier in the day on the 27th of February, one could ask: “Does anyone know where this bull market is headed?”

Something new is happening not only in the way that the internet is shaping our lives this time round, but also in how new technology innovations are getting bedded down in the industry. Briefly put, venture capital-backed start-ups [a term I use for all high-growth private companies particularly in the technology sector] are being acquired much earlier by corporate enterprises who can offer scale to these entrepreneurs and who are looking to expand the way they grow new products and services. Most larger companies through their corporate development units operate a mixed economy where they balance the greater certainty of organic growth and its longer time horizon with the benefits of inorganic growth, namely an earlier starter position, and probably a more excellent innovation.

There has been a lot written about how much value destruction can happen by acquiring businesses.   Some would argue that if you’re clear about what drives the value, then acquisitions create value when they improve long term cash flows. The time frame is important here for assessing the improvement of cash flows, but so are the additional strategic value drivers and elements above and beyond financial value.

Clearly strategic value needs to be tied to financial value. However start-ups are not bought (necessarily) for the financial value they have. That’s part of it, but there’s more.   

Entrepreneurs have the greatest insight into how a particular market is developing – if they are good – as they are in the “eye of the tornado” and are dealing with how the markets are dynamically evolving real-time. Entrepreneurs also think differently. They see things that others don’t.They feel compelled to make things happen because something doesn’t exist which should. Sometimes that’s blind faith which leads to catastrophe, but more frequently, that’s great insight which is harnessed into a step change in how an industry operates. If a company acquires that asset of the entrepreneur’s insight and innovation, then they can lead in that industry breakthrough. Time and time again, we see that the benefits of market disruption and dislocation accrue to the number one and two players who embrace it. Said another way, the disrupter will be acquired by the entity they most disrupt, and embracing the disruption can be very value-enhancing.

It is common to refer to Google as a media firm today. The company entered a crowded market with better technology. Its unfair advantage was applying that better technology, specifically search algorithms, to the aggregration of audiences, which is what media firms do. Google figured its business model out later. Since going public in August 2004, it has become one of the largest media companies on earth. That game change occurred by a different approach – different thinking – and adding different technology to media.

Part of why corporates buy start-ups is to add new DNA to the corporate gene pool and introduce that new way of thinking into how they operate. Sometimes there is massive organ rejection by the body, but there have been hugely successful acquisitions. In the best of these, the startup culture has positively affected the corporate culture as well. The EMAP acquisition of WGSN has worked exceptionally well. WGSN is a Bloomberg service for the fashion and style business which was acquired by EMAP in October 2004 for £140m. WGSN’s business has doubled since then.

So is the buyer typically disadvantaged in an M&A process? Pretty much - one has to conclude as the information asymmetry is such that there is a fundamental disequilibrium. The best way to offset this is to ‘date before getting married.’  Not surprisingly, some of the healthiest acquisitions have stemmed from successful business development leading to the larger company wanting to own the startup. The longer and better you understand the asset, the better you can assess the value.      

There are more ways to get some of the right and new DNA in your firm if you are running an established enterprise. Acquiring firms will always carry the risk of information asymmetry.      Google apparently acquired YouTube in five days. It’s easy to look at the price and the time frame and see how that worked in the founders of YouTube’s favour. Increasingly, smart corporates like Skype and Google are investing  directly into startups in order to continue to learn about markets.    Recently they both co-invested in FON, a European Wi-Fi network.

In summary, it’s important to stay radically open to small change which indicates that major disruptions are happening in the market. You can become obsolete faster than you know.  Partnering, investing and acquiring have always been part of the corporate toolkit, but derivatives of each, and blended models, and an overall speed in the market mean that a corporate executive can never take anything for granted – neither his current market position, nor his next year’s forecasts.

Julie Meyer

When Apple announced financial results for its fiscal 2007 first quarter recently with a record revenue of $7.1bn and record net quarterly profit of $1bn, some of us long-term Apple fans had to rub our eyes. We’ve persisted in thinking that Apple always had an edge on fantastic products and market vision, but could it be that Apple would have strong financials as well?  Too much almost.   

Apple always been full of itself. “We’re going to make history here today,”  Steve Jobs said as he opened MacWorld in San Francisco in early January with the launch of the iPhone. Some of this brazenness has led the company to adopt a combative approach with The Beatles’ music publisher over the name, but also with the iPhone as well; very confrontational to adopt a name already used by Cisco – even if the world expected Apple to do it. The firm has had its share of original names for products, and could have surprised us with a new, imaginative, iconic name.

The iPhone signals even more the consumerisation of technology. It is resolutely not a device for business, any more than Apple computers are computers for business. This does not compete with BlackBerry at all. It is a consumer toy, and probably a lot more usable than any phone out there. The price is high, granted, but not higher than an iPod AND a Motorola Razr. People pay a hefty premium for the iPod versus other MP3 players. They might  well do the same for the iPhone.

The success will very much depend on usability. Will the screen smear or break too easily? Will touch screen buttons be pushed by mistake while you have it against your ear? Apple’s past history shows they are excellent at this sort of thing so it will probably be good. The fact that it does not support 3G is not a major problem so far. Probably most of the data transfer in terms of photos, videos and so on, will be through a computer/iTunes. In fact, when a newer model comes up with 3G, this might encourage some people to upgrade – more revenue. Not all is perfect: it is a bit silly to make the battery not changeable, especially when Apple already had quite a bit of problems with batteries on early iPods.   

The iPhone is likely to start a whole industry of mobile applications and partnerships. Some companies will want to share the limelight with the iPhone, some will see the large touch screen as an opportunity to develop sophisticated services, and some already have products which are perfect partners for this new device. SpinVox, an Ariadne client, the leader in voice to screen, would make a strong partner to complete and extend their Visual Voicemail feature.

Fast on the heals of announcing 1.6 million Macintosh sales and 21 million iPod sales in the last quarter, Apple also announced its new TV streaming device: Apple TV. This could be an excellent product. With more and more content available on the web (including downloaded or streamed films) and no (easy) way to get it to your home theatre (either for lack of technical knowledge or simply physical constraints of laying cables) this solves a real need, and people will want it. There are some devices on the market but quality and usability are poor. Apple will probably do it easy and right.

Apple is king of revolutionary steps forward and big-picture thinking brought home in amazing products. Leave it to the rest of the poor folks in the technology world to take baby steps and evolve from one product release to another. Jobs’ team will do the step changes, the order of magnitude shifts.

What is also clear is that Apple intends to build a monopoly in digital content across iTunes, Apple TV, QuickTime (Apple’s standards-based technology) and the iPhone. By releasing new devices, and facilitating the transfer of content amongst the devices, Apple is creating a great user experience, but arguably, if it is done well, also a more restrictive monopoly than Windows has ever been in PC operating systems. This will hit Apple at one point through either consumer backslash or anti-competitive government forces, or both. You don’t have to have your own philosophical view about these restrictions to know that they will have trouble. What is different about the world in 2007 than when the Macintosh first came out is that interoperability is taken for granted. Consumers want to use content on any device, not just Apple devices. Restrictions are annoying.

What is clear is that Apple is a company to watch, and a company much-loved. The technology industry provides few case studies of companies who were ‘down and out’, being reinvented and emerging like a Phoenix. In the world of 2007 where people are using technology as much for personal entertainment as for work, and with the abundance of new devices, Apple is in the good position of doing well while continuing to deliver breakthroughs in user experience.

By Julie Meyer and Jem Eskenazi, Ariadne Capital