Andrew Keen: Why Apple isn’t feeling the bite even as other tech titans stumble

New media

As the global economic crisis shows little sign of relenting, it’s been another brutal week in tech.

News Corp digital chief Jonathan Miller fired MySpace’s two co-founders, CEO Chris DeWolfe and president Tom Anderson. A Swedish court sentenced the two founders of Pirate Bay to a year in prison. Yahoo! announced plans to lay off another 5 per cent of staff and shut down GeoCities, the web hosting company it bought for $3.6 bn in 1999.

The once promising search start-up Cuil has closed,while Joost, at one point the great hope of online video, is for sale. Even Microsoft announced a 6 per cent annual drop in revenue, the first since it went public in 1986. Microsoft CFO Chris Liddell describes business conditions as “the most difficult economic environment the company has faced in our 30-year history”.

But for Apple, Microsoft’s greatest rival over the last 25 years, the most serious global economic crisis in a century has had little impact on the company’s growth. Yes, in the midst of all the general economic carnage, a Steve Jobs-less Apple continues to defy economic gravity.

Announcing its first quarterly sales of 2009 to Wall Street last week, Apple revealed a net profit of $1.2 bn on overall sales of over $8 bn. Leading the Apple miracle were 3.79 million iPhones sold in 81 countries, double the number from the same quarter last year. Last week Apple also celebrated the billionth download from its nine-month-old App Store.

The iPhone is more than just a successful hardware product. With its telephone and internet access, it is driving the real-time communications revolution.

Without the iPhone, Facebook and Twitter wouldn’t have taken off so dramatically. The iPhone has swept away the traditional barriers between a mobile telephone, a web browser, a computer, a portable entertainment system, and even an e-book reader.

It is now the critical vehicle of both old and new media. So is the iPhone invulnerable? Palm certainly hope it isn’t. This once-iconic Silicon Valley firm has bet everything on a new device called the Pre which will be launched in the summer.

Google’s promising Android phone will be out later this year, while the BlackBerry family of devices remains the iPhone’s primary competition among business users.

But my money is firmly on Apple. If the rumours that it will release a $99 third generation iPhone in early June, expect sales to at least double again in the second half of 2009.

Whatever happens to the world economy over the next eight months, 2009 will likely be remembered as the year that Apple overtook both Microsoft and Google as the critical engine of the new media economy.

Andrew Keen is the author of ‘The Cult of the Amateur’