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Bill Gates’ Prediction and Apple’s Success

In an interview in May 2004 with the German newspaper Frankfurter Allgemeine Zeitung, Bill Gates, a longtime competitor of Apple, expressed skepticism about the iPod’s long-term dominance. He predicted that mobile phones, with their growing capabilities, would eventually take over as the preferred method for portable music listening.

The Microsoft co-founder compared the situation to Apple’s earlier success with the Macintosh computer. While initially strong, Apple lost market share in the PC market. He saw a similar trajectory for the iPod. “As good as Apple may be, I don’t believe the success of the iPod is sustainable in the long run,’ he said in the interview. “You can make parallels with computers: Apple was very strong in this field before, with its Macintosh and its graphics user interface — like the iPod today — and then lost its position,” Gates said.

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Why Bill Gates prediction seemed way off the mark then

At the time, Gates’ prediction seemed far-fetched. The iPod was hugely popular, selling millions of units, while mobile phones were generally bulky and lacked the music storage and playback features of a dedicated MP3 player.

However, Gates’ prediction turned out to be partially correct. Smartphones did eventually become the go-to device for music, offering features like the iPod alongside the ability to make calls, access the internet, and run apps.

However, the company that played the biggest role in this shift is Apple. One can safely say that the move to smartphones has been spearheaded by Apple. Though initially skeptical of the phone market, Apple released the iPhone in 2007, a device that combined phone functionality with an iPod-like music player and internet access. The iPhone’s success far surpassed even the iPod’s, revolutionizing the mobile landscape.

So, while Gates correctly anticipated the decline of dedicated MP3 players, he underestimated Apple’s ability to adapt and dominate the then emerging smartphone market. Till then, Microsoft played a key role in the mobile operating system segment with Windows Phone.

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