By Edward Harrison of Credit Writedowns.
I want to take a break from banking and macro stuff and talk a little bit about technology. I wrote an article about Android a few weeks back. That was a more personal account on why I was switching from a Windows Mobile phone to Android, the latest whiz-bang operating system running mobile phones. (Don’t ask me why I stuck with Windows Mobile for so long – even I don’t know any more). This article is looking at the Android phenomenon more from a strategic perspective.
You may have seen the Verizon commercials on TV. They’re everywhere: Droid has arrived. And this happens to be a big problem for Apple Computer. In case you haven’t seen the commercials, one is embedded in the version of this post on Credit Writedowns.
As you may know from reading my blog, I am a bit of a technophile. I’m that guy you remember from high school who was taking AP Computer Science and programming in Pascal, the guy you remember who always had the latest gadget. And I’ve done my stint in technology companies too.
But, at heart, I am a finance guy and when I look at technology, I do so from a finance guy’s point of view. That’s why I see the emergence of Android phones as significant. The recent flurry of announcements about hardware manufacturers adopting the Android platform has me thinking about Apple Computer and the 1990s again – and that’s not good for Apple.
The Macintosh
From the mid-1980s to the mid-1990s, I was a Macintosh user and an avid fan of Apple Computer and its products. I started using PCs only because incompatibility with my colleagues’ work product forced me to do so. The Macintosh was miles ahead of the PC in user-friendliness and platform robustness. And Apple is a company that cares about customer service too.
But, forced to do so or not, I did switch to the PC, as did millions of others. The reason: one company cannot compete against 100s. Apple refused to open its system and that limited production to Apple alone. Meanwhile, in PC world, you saw Compaq, Gateway 2000, HP, Dell, IBM, Toshiba, NEC, Packard Bell and a host of other vendors jumping onto the PC platform. Eventually, the PC was ubiquitous – and often incompatible with the Macintosh. How could Apple compete? It couldn’t. Eventually, the Macintosh lost market share and became a niche product for die-hards, education and design.
Digital Music
But, Apple maintained its core competencies of user-friendliness, platform robustness and customer service. While PC makers were technology companies run by engineers, Apple was a consumer product company run by design and marketing. So, when Apple hit upon the digital music scene with iTunes and the iPod, it instantly became a success.
I am a big music fan. Because I tend to be an early adopter, I went all-in for digital music and CDs, buying my first CD player in 1988 – a top-rated Kyocera DA-610cx. When digital music hit the portable device market, I was there as well with my portable supposedly skip-free CD player plus car adapter. But, eventually I switched to Mini Disc and then on to Digital Audio Players. Remember the Diamond Rio 500?
The iPod
Then came the iPod. This was a ground-breaking product which was to digital music players what the Macintosh was to computers. It revolutionized the industry, bringing Apple Computer back to prominence as a technology company. The iPod became the dominant digital audio player (the hardware) – and with it, iTunes became the dominant digital music player (the software). It was almost like Intel and Microsoft rolled into one. Again, it was the product design and robustness of the iPod and the user-friendliness of Apple which made the difference.
Since then, Apple has successfully branched out into all manner of related spheres: video, podcasts, and most crucially digital music purchases and mobile telephones. They have also been very successful at integrating all of the platforms.
The iPhone – Android wars
But, everyone knows the standalone digital music player is passé. And iTunes, the digital music software application is a loss leader. The real money is going to come from digital music purchases and Apple’s mobile telephone, the iPhone. So, strategically speaking, this is why I see the flurry of announcements about Android phones as a problem for Apple.
Android is the Linux-based operating system developed by Google. it is now being implemented on a number of different platforms from internet tablets to low-end personal computers to mobile telephones.
What I question is how Apple is going to compete in mobile telephones. Don’t let the hype around the Verizon Droid fool you. The phone, manufactured by Motorola, is a very good phone. But, it is only one of many that are now coming to market. There are also phones in the works from Sony Ericsson, Samsung, HTC, Dell, Garmin, LG, and a host of other manufacturers. Even Google is supposed to be coming forth with the much anticipated Google Phone – the phone designed to prevent the splintering of Android which doomed Unix as a consumer-based operating system.
To my eyes, this is looking like a repeat of the Macintosh-PC Wars of the 1990s which Apple lost. On the one side, you have Apple, competing at the high end and very concerned about platform integrity and control, and preventing other manufacturers from building its hardware. On the other side, you have another operating system designed for the lower end and installed on a host of manufacturer systems – which may or may not cause serious platform integrity problems down the line. Who wins that battle?
In the 1990s it was Intel and Microsoft. And they went on to reap massive rewards as Apple foundered. Today, Apple risks a repeat of this if it does not come out with a credible solution to deal with its burgeoning Android problem.
I hope there are some technophiles out there that appreciate this departure from the norm and want to chime in.
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As a technophile, I find Apple’s business model to be very user unfriendly. I tend to prefer what might be called a kludge: favoring a larger number of apps with specific functions over fewer large apps. On Windows/Linux, free apps are available for virtually all requirements. Apple sells a consistent, yet inflexible, user interface at a large markup. Apple’s architected limitations prevent novice users from hurting themselves. A mobile device should have a fully functional web browser to access free features of WWW. Paying for separate apps for features that should be free is for suckers.
Full disclosure: I worked on the Droid.
You’re the first person I’ve seen publish the comparison of the mobile OS wars to the PC wars of decades past. It seems pretty obvious to me. So far, Google is doing a much better job at PR than Apple, and I think that will matter. People aren’t ready to trust another Microsoft.
Based on the talented development I’ve seen done at Google first-hand, I think they will be able to continue to offer compelling upgrades to the OS which will make splintering more modest, because alternative versions of Android will want to stay compatible to take advantage.
I found it amusing 6 months ago when everybody was asking, “Where are all the Android handsets? Is Android a bust?”
One other important factor is the cooperation of the telcoms. They are scared to death of being reduced to being dumb pipes that sell Apple phones.
Now if Nintendo would get off their ass and partner with a smartphone vendor before Apple takes over the portable video game world.
I’ve been writing software for handheld devices since Windows CE 1.0 and the original PalmOS (that’s back to the early 1990’s). I now write for Blackberry, Android, Symbian and Windows Mobile. WM is still the platform with the best tools and infrastructure (so I’m most productive when developing for WM) and the best selection of hardware for vertical markets. So, for enterprises at least, Windows Mobile will continue to win for quite a while.
Where they’ve fallen down is on the consumer side. Actually, its almost *because* their tools are so good. Almost any programmer can create an app for WM and that lowers the average quality.
I have been using an Android powered G1 as my primary phone since the beginning of the year. I also have an Android app (exercise timer) I developed published on the Android market. Here are my random observations:
– Most people still don’t understand that Android is a platform, not a phone. They soon will. Within the next year we’ll see Android powered netbooks, tablets, handheld GPSes, and in-car navigation systems among other things.
– The first batch of Android phones, especially the G1, were woefully underpowered from a hardware standpoint. That is starting to change.
– The future will be defined by two things: 1) the cloud and 2) location based services. Android supports this better than any other mobile OS out there. Think Sherpa + mashup on steroids.
– Companies are getting better at developing web sites tailored for mobile devices. Likewise, newer technologies like HTML 5 will make things that had been difficult with traditional web apps much easier.
– With regard to the two points above, eventually the concept of “how many apps are available for xyz platform” becomes irrelevant. Look at the Apple app store. Eliminate the fart apps, to do lists, iBeer, baby shakers, and other nonsense and what is left? A handful of apps that really should be local apps (games, utilities, etc.) and everything else that really ought to be a web app on a server in the cloud.
The iPhone is a really slick device. Apple always hits the ball out of the park when it comes to the aesthetics and ergonomics of its hardware and always offers robust integration between its hardware and software (by controlling it end to end). However, the future, with regard to mobile devices as platforms for new business models and new ways of social interaction, is with Android.
“Now if Nintendo would get off their ass and partner with a smartphone vendor before Apple takes over the portable video game world.”
Apple’s upper management hates games even more than they hate Flash.
Apple sells a consistent, yet inflexible, user interface at a large markup. Apple’s architected limitations prevent novice users from hurting themselves.
Large mark-up or not, consistent user interfaces are exactly what you want for consumer electronics. Apple has always gotten this, and that is why they have been successful. Technophiles are too small a market for Apple to care. Indeed, it is bad business sense for them to cater to technophiles.
A similar example is Modern Warfare II which came out last week. The PC gamers (the technophiles) canceled their orders and swore off the game because of lack of dedicated server support. And the PC launch did poorly, unable to knock Dragon Age of the top. However, the console sales (the consumers) bought 5.5 million copies in 24 hours and have now brought the game to over $500 million in sales. Those PC gamers sure showed Activision!
A mobile device should have a fully functional web browser to access free features of WWW.
Which except for Flash, Apple has. Why they are missing Flash is a matter of great speculation and flame-wars.
I will say the Android is interesting. And Apple needs some damn competition. But technophiles do not understand this market as well as Apple does. That is why every time you turned around people would talk about the next “iPod killer” that wasn’t. Maybe Droid will do well. But until I hear cogent analysis from people that are not technophiles, and who get consumer electronics, I am not convinced.
“And the PC launch did poorly, unable to knock Dragon Age of the top. However, the console sales (the consumers) bought 5.5 million copies in 24 hours and have now brought the game to over $500 million in sales. Those PC gamers sure showed Activision!”
Well, yeah, they did. They showed that if you make a PC version of a game like Dragon Age that plays to the PC’s strengths, and allows users to modify the game to their hearts’ content, it will sell well (ceteris paribus). If you treat the PC version as a port of a console version and treat users like idiots who need to be controlled, it won’t. Now, Activision may well decide that they don’t need PC users given their sales on consoles, but it certainly shows how to go about a PC version if you’re going to publish one.
Apple’s upper management hates games even more than they hate Flash.
I happen to have information that says this has changed. Beyond that I can say no more.
No.
Frankly, I’m getting tired of this theme. You know, “in the 1990s Apple made this mistake, and now they are doing it again!” I saw it with the iPod phenomenon quite clearly with lots of predictions about how the open market of competitors would take down the iPod market. Nope, never happened, and this is how it will be with Android. Lots of excited predictions, but it’s not going to happen.
Instead Android will be the Linux of the phone market. Very slick tool, open, full of technical goodness, philosophically correct, the geek choice. And since it’s the geeks who write about technology, you’ll see as many Android-is-taking-over articles as we see Linux-is-taking-over articles. But it will never actually happen because most of the marketplace is not made up of geeks. Most people haven’t a clue about openness or APIs or anything like that. They just want the choice that works and is the path of least resistance. That’s how the Windows market survives despite it technological inferiority (it’s just easy to get Windows when you buy a PC), and it’s how the iPod market survives despite it’s lack of choice (everyone has one and the ecosystem is centered around iPods), and it’s why Blackberries and iPhones will continue to keep a dominant share of the smart phone market (they just work for what they are meant for).
Android will devastate the Windows Mobile market. It will capture a decent chunk of the smart phone market just as Linux has carved out a nice niche for itself. But it will never be the dominant player in the overall market. The average person will have no reason to go with Android. It is not a “menace” to Apple in the least.
Where I think Android is different is on three factors:
1. A large company sponsor. Google is pushing Android in a way that no large corporation was pushing Linux. Linus Torvalds was not Google and that is significant.
2. Consumer-orientation. Another poster was right about Apple being a design-Nazi about hardware-software integration. This certainly limits adoption, but it does mean they make some high quality consumer-electronics gear. This is the kind of stuff that my 80-year old mother can use and that’s what counts. Whether I can root my G1 and install a bunch of non-compliant apps is not what sells iPhones or Droids to the masses. People want something like a television or a car that is easy to figure out works every time, no fuss.
3. Widespread adoption. As soon as Dell said they were going to sell some Linux boxes, you saw Intel and Microsoft swoop down and kill that one dead. This is not happening with Android. We have a huge number of mobiles coming out. But other channels use Android too. Garmin is going Android for GPS. Archos is using it for Portable Video Player and Acer is using this for Netbooks.
I see Android as a stealth way to get Linux platform adoption and penetrate the Microsoft stranglehold on PCs. I am sure that’s one reason Google is doing it. the fact that they can kill two birds, both Apple and Microsoft, with one stone makes this a smart move.
IBM pushes Linux and is a major corporate sponsor.
Do they push linux to consumers? They don’t seem to push anything to consumers.
IBM pushes Linux to developers and that’s how Google is pushing Android – to developers.
The phone companies are the ones pushing Android to consumers, but they slog everything all the time without any sense of loyalty to any one platform or company.
Yes, and No.
IBM pushes Linux as an enterprise server OS, and it’s quite successful there. It doesn’t really push it as a desktop environment, not even to developers.
However, I’m generally in agreement with your view of it at this stage. I’m still viewing Google Android as more analogous of Linux vs Windows, than Wintel vs Mac Classic.
But I can see the argument, Apples and AT&Ts deathlock has prevented me from buying an iPhone even though I covet one… If the other hardware manufactures and Google can come up with something that’s very close on the application, integration, usabilty front I will be tempted.
Of course the other reason I haven’t pulled the trigger is my mixed feelings about giving up my keyboard… I don’t text as much as a kid, but I do text more than I actually talk on the phone and the touch keyboard is unappealing.
“Linus Torvalds was not Google and that is significant.”
– and Google is not Apple. Google is not a large company — they are just a highly capitalized one on the Nasdaq.
Since it’s inception, Apple has sold to the common consumer and interacted with them as a seller of physical goods. Google has no experience whatsoever dealing with people. That in my book is even more significant.
“That’s how the Windows market survives despite it technological inferiority (it’s just easy to get Windows when you buy a PC)”
Which is why whoever it was at the justice department who decided to attack Microsoft about the Browser, instead of their anti-competitive OEM agreements, when they took them to court over their anti-trust violations, should be flogged.
Don’t confuse Android with Linux. Android uses Linux as a means to an end. The Java space is where the power of Android lies, and that piece has very little to do with Linux.
Apple was able to fight off the Zune and other device manufacturers with iPod/iTunes. Why not the same with iPhone/iTunes?
“Eventually, the Macintosh lost market share and became a niche product for die-hards, education and design.”
Gosh. Certainly sounds as if Apple expired and is no longer selling personal computers. It would have been nice if the author had continued to “explain” the history and accounted for Apple’s resurgence from their nadir in the late 1990’s.
As the “history” stands, it completely misses the point that Apple has not fundamentally changed its closed PC architecture, and yet if growing that business very nicely, and has been since Steve Jobs re-focused the company’s efforts when her returned to the company. Supposedly, over half of new Mac sales are to Windows users who have never owned a Mac before.
I hate to sound like an Apple fan-boy, but while your “history” is factually accurate, it stops where it does because the underlying rationale won’t support the subsequent results for the company.
There is more to the company’s success than the closed-vs-open debate. If open architecture were the “killer” attribute that you seem to believe, both Microsoft and Apple would have been crushed by the onslaught of Linux long ago. Your premise that open architecture represents a significant advantage is flawed. History indicates otherwise. Other factors determine success/failure.
Fair point. But, I can’t really cover all the bases in 1000 words or less.
When I bought my recent PC, I had considered getting a Mac and running it dual boot. The fact that mac dumped the PowerPC chip and went with Intel makes a huge difference in my opinion.
That is one of many reasons (including integration with the iPhone, iPod and Apple TV) that the Mac is doing well.
Ed said..When I bought my recent PC…
For shame tisk, tisk, geeks build their own, not buy them.
Skippy…with the money saved I put two more SSDs in raid 0. GRUNT!
iPhone and Android are transforming the cell phone market. People who think Windows Mobile has any future are living in denial. Sell stock in Microsoft. The reall 800lb gorilla in the room is Symbian, can they react fast enough or are they doomed to be the CPM of cellphone operating systems?
Apple is making two very serious strategic errors, that lead me to agree with the post.
First, all iPhone apps are implemented in Objective C. Hello? Talk about Apple arrogance out on full display. Anyone want to guess what the ratio of Java to OC developers is? And let’s not forget that Google has leap-frogged all the legacy Symbian and JME systems by recognizing the cellphones will no longer be underpowered and there is no reason for these restricted Java profiles.
Second, Apple’s control of what apps are allowed to run on the platform is again a huge mistake. It surely reflects Apple’s “We know what’s good for you attitude” that if anything is worse than Microsoft.
I don’t relish Apple’s impending decline due to the strategic mistakes it is making. Their UIs are amazing and all of my desktops and laptops are Mac Pros. And I particularly don’t relish that, as the war heats up between Apple and Google, Java is going to find itself even more of an orphaned child on the Mac platform than it already is. Look how long it took Java 6 to be ported to the Mac. If this happens, I may have to reluctantly give up my Macs so I can get my work done.
It reminds me of that movie, Pirates of Silicon Valley, with the crowd shouting, Steve, Steve, and Balmer in the background saying to Gates, When did it stop being a business and start being a religion?
It is common to assume that the way Windows cornered the market is the blueprint for how technology markets normally work. This is not really true. Microsoft cornered the market with some very aggressive plays against Netscape, IBM and OS2 that ultimately led to the antitrust cases. I don’t expect Google to try to crush the phone that makes it so much money with its default browser pointing at Google. I cannot see how it could even try if it wanted to. It’s the search that makes it money, not Android or the phones themselves.
I welcome Android to the market and hope that it is successful, and the Droid looks a good device. As an iPhone user, however, there is nothing yet that demands I should switch. I would also have to replace the thirty or forty apps on my phone. No biggy, but it is a barrier.
I found it interesting that on this of all websites you ignored money. Apple is still massively successful in computers – it makes more money out of them than any of the assemblers. It also makes huge money in phones. 2.5% of the overall market against Nokia’s 35%. The iPhone makes more money than Nokia. Confusing marketshare with profits is a habitual mistake – look at Apple’s market cap compared with Dell’s.
Android is competition for the iPhone, which will make them both better in the long hall. If Android is the death of anyone in this market it is Microsoft. Winmo is the one losing market share while Apple’s and RIM’s are increasing.
Also, you mention the Google phone, and the need to prevent the splintering of Android. Mike Arrington is a believer, but Google’s Andy Rubin, vice president of engineering for Android, said Google would not “compete with its customers” and “We’re not making hardware. We’re enabling other people to build hardware.” The Google phone is still a rumour, and Apple is still designing for one device, with one set of buttons and UI expectations. Android will have to avoid fragmentation, and the handset makers will need to make a profit. Even if Android is a roaring success, don’t write off Apple. They may just sit there like in the PC space, creaming money off the top with 30% margins while the others squabble over $300 netbooks.
I agree — technophiles, even technophiles who have interests in finance, are not the best sources for good opinions on luxury mass market goods (Apple – as opposed to the 200 dollar netbook common market vendors)
While I’m sure Apple would love to dominate the markets, doing so at the cost of pitiful margins is an open invitation to disaster. Apple seems to be one of the few companies left that understand that good profits from good products = success. The rest seem to be under the delusion that market share is everything and profits don’t matter.
Interesting that you forgot that tiny irrelevant company in the worldwide mobile phone business: Nokia. ;) . In terms of world market share it is what? First?
Have a look at this baby: http://maemo.nokia.com/n900/
(Not affiliated in anyway with Nokia)
Tiago’s 100% right on this one.
Us yankees don’t make a habit of following markets outside the U.S.
Outside the U.S. Nokia’s Symbian OS rules. There’s a good reason for it too. Wide open platform, very good media freedom, ability to connect to jails like blackberry’s messaging.
Symbian is *still* a good decade ahead of Apple and Google. The challenge is that it is different to develop for. Meaningfully so. As soon as they finish integrating QT, I think it will attract more developers. It will, again, be years ahead of what Google and Apple are attempting.
And, for the record, don’t make the mistake of thinking Google’s OS is ‘free.’ They have two versions, Free and non-free. In both cases, what’s left of the Linux kernel is Free, but there’s a minefield of Google’s license restrictions on top of that. That doesn’t make Google evil, but the gotcha’s that arise haven’t made it into the MSM yet.
The other common mistake is associating thousands of applications for Linux distro’s with the potential that these existing apps can run on an Android. They cannot. They are built using two *entirely* different tool chains.
Once the money-flushing promotional flourish is over, it’ll be interesting to see what Google’s penetration turns out to be.
Check out the Nokia e7x phones. Awesome! Communicators are better still, but I couldn’t afford to replace my old Communicator.
This is a joke yes? A full decade? How so?
Disclaimer: I just got an iPhone after having a Palm Treo and using a first generation iPod touch for over a year, and I switched to a Mac about two years ago after having a PC for six+ years and working with PCs throughout most of my sixteen years in software testing. I love all three Apple devices I have.
Apple succeeds by being very profitable and satisfying its customers. Does it have a huge market share, no. So what? It has a profit on just its iPhone sales that exceeds all of Nokia’s profits, yet while Nokia produces 35% of the handsets, Apple produces 2%. See these articles for more details:
http://www.techcrunch.com/2009/11/11/while-rivals-jockey-for-market-share-apple-bathes-in-profits/
http://arstechnica.com/apple/news/2009/11/apple-most-blingin-handset-maker-despite-tiny-market-share.ars
I respect Google and like the idea behind Android, but smart phones represent a still small, but growing, share of all handsets in the US, never mind worldwide. Even if Android beat out all the other smart phone OSs, Apple, if they continue to innovate and focus on usability, will still succeed and be very profitable for many years to come.
In complete agreement, and the analogy to the PC/Mac wars is excellent. I think we’re near the beginning of having mobile web access and open platforms better support the development of new ideas that will form around the new tech/data/network combination. MS/Intel became dominant as the low cost provider… it even eventually co-opted the laser printer that was one of Apple’s early game-changers. Android could well play out in similar fashion.
Further, I think Google understands data better than Apple (or Microsoft for that matter). I read a statistic somewhare that a Windows server admin can support around 25 servers, while a Google admin supports around 400 of their servers… it’s hard to think around that kind of tactical advantage when you’re trying to sort out the world’s twittering and offer something useful based on that.
Incidentaly, I got my first CD player in 1986 and would have killed to take AP Computer Science; my HS didn’t offer it at the time.
Last time I checked, iTunes store was a loss-leader to sell high-margin iPods, not the other way around.
Not a loss leader – it makes money, but only a few hundred million a year or so.
Joel Spolsky pointed out that people are superficial, especially when it comes to cars and computer interfaces. Apple products appeal to people because they look “cool”, even if the competition’s product is actually better. I bought a G1 phone because you could change the battery yourself without shipping the damn thing to Apple. One must give Steve Jobs credit for moving Apple away from computers into consumer devices, and Apple’s iPhone has a lot more apps than Google’s phone. The purposes of the two phones may be different as well. iPhones are made to sell Apple software and music. The G1 phone was made so that people would use Google services more. Google noticed increased traffic from iPhone users, so they decided to get into the mobile device market because it was good for their business.
Much appreciated. I love technology too. My bet is on Google.
Does market share matter as much to the user with phones? I mean, does a phone use have to care that much about compatibility with other phones? One phone can always call another phone, send a message to another phone, etc. With smartphones, I suppose the apps that you can get, etc., technical features, might persuade someone one way or the other. And of course, carriers are an issue, too: I’m not getting an iPhone because I don’t want to switch to AT&T. All of which is to say that forces that aligned to let MS take over the PC market may not necessarily work the same way with phones, and several different standards may coexist.
There is a big move down today in Apple stock and the stock market.
But there was a way to make money from this move, if only your DJIA index timing signal told you TWO DAYS AGO that the market is in correction mode.
admin
http://invetrics.com
I founded Firepad, which sold one of the top 5 PalmOS consumer apps for many years. We looked at mobile platform strategy quite a bit.
Mobile and PC operating systems are not strategically analogous. OS switching costs are low on mobile devices, largely because users mostly consume, rather than create, mobile content, and most of that content is open. As a result, “OS wars” do not have the strategic significance they did on PCs.
Apple’s strengths lie elsewhere.
1. iTunes is a network-effect natural monopoly. Users need the largest music library, and music vendors need the largest audience.
2. Eight years of iTunes dominance have created an installed base of millions of people with billions of songs under Apple’s DRM scheme, and billions of little iPhone apps. People paid for these and don’t want to give them up. Switching costs.
3. Apple spent 3 decades developing a consistent and much-beloved consumer brand. That’s a big, hard-to-copy advantage straight out of the StratMan textbook.
4. Apple has an under-appreciated physical distribution advantage. By selling direct through proprietary stores, they run tight inventory, can scale hugely for holidays, can react instantly to consumer tastes, and can gain tactical surprise again and again, to the consternation of competitors.
5. Apple is the only company offering an integrated media platform. This gives them a huge and persistent ease-of-use advantage, as well as endless cross-selling opportunities that have driven the recovery of Mac market share. This can be hard for technophiles to appreciate, because it benefits only non-technophiles.
These strengths, even taken together, are not as strong as the Windows monopoly was in its heyday. But they are pretty strong.
I’ve used both the iPhone and the gPhone. I could be happy with either one. The difference is just not that great. Except for the 5 things above.
If I were Apple, I would worry much more about Google’s netbook OS, which if well-done would pull the rug out from under MacBook sales.
Some very interesting points, and the ones I have the expertise to comment on I agree with…
except this one:
“If I were Apple, I would worry much more about Google’s netbook OS, which if well-done would pull the rug out from under MacBook sales.”
Apple computer skims off the top end, netbooks are stealing from the low end (I own a macbook pro, 2 macbooks, a mac mini, and 2 netbooks (currently running linux, though I did install OSX just for the fun of it). You don’t buy a netbook for the same reason you buy a macbook, if you are price driven enough that you are looking at a netbook as your only computer (or even only mobile) then you were likely never considering a macbook to begin with.
Price is not the only reason people buy netbooks. With the new iteration of upcoming netbooks, the trend is towards portability, with experimental displays such as oled, etc, which can command high prices. Look for apple to take the Macbook Air to the extreme – the $2000 netbook that will both be ultra portable, as well as keep the coffers filled at Apple.
Fact check: MacBook Air is $1500, not $2000. (Tangent: for nontechnical users, Apple is only expensive if you place zero value on your own time. If you include maintenance and software installation effort, and if your time is worth at least minimum wage, then you generally save money by owning Mac.)
Good point about MacBook/netbook user differences. Creatives will use Mac regardless. Students are price sensitive early adopters, so they likely buy cloud-only netbooks first.
The unanswered question is home users. And those folks are pretty tied to iTunes at this point. So maybe Apple wins that round too.
Google will buy its market share with the OEMs and carriers if necessary, for both Android as well as its upcoming operating system Chrome.
This article by VC Bill Gurley really knocks it out of the park, and it’s well worth the read. http://abovethecrowd.com/2009/10/29/google-redefines-disruption-the-%E2%80%9Cless-than-free%E2%80%9D-business-model/
To answer the question: can they stop the Android menace?
They might.
In (at least) two ways Apple today is a very different company than they were in the the original Mactinosh era:
(1) Apple understands developers, and takes care of them.
The fact that after a relatively short period of time there so many applications available, which can be easily deployed and run speaks for itself. Developers I know speak very highly of the quality of the development environment.
(2) Apple is a supply chain master.
They got many generations of iPods and iPhones out without substantial supply chain hitches. They seem to use their purchasing power very effectively to gain short-term exclusivity for. The vast majority of their components today are standard components, so they get the benefit of scale in the industry.
Heinz
Object C is not a problem, especially considering the horrendous Java implementation on virtually all mobile phones. In fact, it’s probably one of the iPhones biggest advantages and there seems to be no shortage of available apps. Not Object C is the problem for app developers, it’s the race to the bottom with regard to app pricing. It’s becoming increasingly hard to sell anything for more than $0.99/€0.79. Apple’s use of Object C on the iPhone did not lead to low developer adaption.
In order for Android to even put a dent into the iPhone’s success, Apple’s competitors must begin to make phones that are not complete garbage (in terms of hardware) in comparison to the iPhone and right now, I just don’t see it happen.
Nokia has still not managed to produce anything with a somewhat decent touchscreen. In addition to that, they’re cutting corners on their midrange and low-end offerings, resulting in hilariously bad products like the Nokia 5000 (a glorified S40) and the 5800, which is so shitty in terms of hardware that it’s not even funny.
With the exception of the Xperia phones (which use the crappy Windows Mobile), SonyEricsson is essentially re-releasing the K800i hardware over and over again. Even SE’s premium products like the Satio suck compared to the iPhone. Instead of good hardware, we get useless gimmicks like the EyeToy-camera on the Yari. Seriously, what the fuck?
Samsung fares a little better but the i900/F480 still suck compared to the iPhone and right now, Samsung seems more concerned in selling gimped lower-end versions of these phones (i.e. Galaxy).
LG… they not even a player in the market for high-end smartphones.
Blackberry has its corporate niche and it will stay there. Their phones are far too clunky, both in therms of hardware and usability, to ever appeal to the mass market.
Nope, Andriod by itself won’t change the market landscape until mobile phone makers get their heads our of their asses. And even if they do, the greatest threat to the iPhone is probably pricing and the fact that Apple got greedy and is not content with selling phones, they want a chunk of the provider’s earning. This means that the iPhone plans are rather unattractive to many consumers.
I don’t think of myself as a technophile. Or even an early adopter though I have a better than average understanding of electronics and I think I had a CD player before you did, Edward. A Carver, I think. There have been a few recent technologies which have just knocked me out. My first 1600bps modem. My first “car phone” – “not cell phone”. It went under the seat a d plugged into the cigarette lighter. One day right after I got it I was driving across Indiana when it rang. It was my wife telling me that the people who I was on the way to meet at the airport had been delayed. It saved me 1/2 a day. A leap in productivity. Now I’m reading your words and responding to them on this new iPhone. Constantly able to multi-task (which I have a think or two to learn about). But it represents a new level of productivity. That’s all for now. Must get back on that tractor!
I don’t think apple has too much to worry about. I do think Microsoft could have problems on their hands. Linux based systems are becoming more and more user friendly, and compatible with pc hardware. Most experienced pc users despise windows with a passion ( I am one ) because of its fragility and inclination to crash, taking valuable data with it. Having worked with unix and linux systems for the last several years, I can’t help but admire the robustness of both systems.
The other reason apple probably doesn’t have too much to worry about is hardware based. All pc parts these days are manufactured in China for numerous vendors. It is not uncommon for me to have to replace hard drives that are only a few months old. These days, the fact that something is purchased new, means very little, and the component could fail anytime after day one.
I know that apple has a plant in China, but so far they don’t seem to be affected by the problems facing pc components and parts.
Speaking as a user of a G1 google phone, I must say that I am pretty impressed. My father has an iphone and I wanted one but was not willing to switch to AT&T. (I have been with T-Mobile for 5 years and they really take care of me…) So when I heard about the G1, I had to get it. From using my father’s phone, I can tell you that Android has a LOT more useful free apps than the iPhone. Also, the G1 I have is the one that has both the on-screen keyboard and the flip-open keyboard so it is really nice to not have to try to type everything on the screen. As far as long term usage, I am no expert in that department, but so far the only quirky thing I have found is that when I am listening to internet radio, the songs on my SD card randomly start playing… But apparently they are working on a fix for that… Anyway, just some observations from a G1 owner.
Both platforms are awesome! They should work together to create one big uber platform =) that would never happen…
Anyways, with the technology knowadays, anyones grandma can dev. an iPhone or Android app, using tools like Titanium which is an opensource SDK for developing cross platform native apps with only HTML, CSS and JavaScript, check it out:
http://www.appcelerator.com/products/titanium-mobile/
you impressed me with this post. anyways, i totally see eye to eye with you. you should read this on how google subsidizes the android platform. http://bit.ly/1eWrVB
Well Apple `failed’ in the mid 90’s partly because of illegal business practices from Microsoft (and thus controlling key applications, protocols and data formats) and mostly because their hardware – which was never terribly good – really fell in a heap quality and performance wise (as did the os). Presumably neither of those is likely to happen again, at least not in quite as forceful a fashion. I was a sysadmin in the mid 90’s and the mac’s caused the most work for the least number of less useful machines, then windows, then unix (which did far more work). I put `failed’ in quotes because in reality they were always over overpriced and pretty niche in my part of the world.
Android will cost Google less to develop and maintain since they’re leveraging the work of others through Linux. And will easily support far far more hardware. Lower licensing fees to handset makers can’t hurt. If they can make decent quality handsets anyway.
Google has a lot more ‘street cred’ amongst the types who write software for free. It might take a bit longer but eventually it will have more decent zero cost applications. This will keep away (many) devs but this is simply the reality of where the software industry is going anyway. e.g. I haven’t bought a single piece of computer software in over a decade. apart from some forcibly bundled with a laptop. (I do buy lots of games for my games consoles, and no I do not use unauthorised copies or subsidised versions). Yet I have never had trouble doing what I need to do.
Google should be able to leverage the network the same way MS leveraged their hold on the OS and Apple to a lesser extent is leveraging iTunes. Accessing your data as easily from your portable device as from your desktop (if you even need one anymore), and so on. And this isn’t just about enterprise businesses either, small business and individual people have increasing amounts of ‘data’ they want to access and manage.
It will be interesting to see how it plays out. I’m hoping (but not all that hopeful) that these new high performance low power devices becoming available with usher in a new ‘golden age’ of software choice and competition, such as Android. And there’s someone other than Apple that most fears fair competition (although they’re not to big on it either).
I just have to say, I absolutely loved my Diamond Rio 500. I had the green clear one.
I still have mine – the grey model! It’s right here with an absolutely giant Smart Media card. Total capacity: 64MB. My iPod Classic has 160GB. Amazing.
Edward,
Nice column. Very informative for me. And I am an Apple user. MacBook, iPod, iPhone. But I really, really hope that Android delivers a solid kick to Apple where it hurts. And I want to be clear that my beef with Apple is all about their interface.
DISCLOSURE: I am NOT a techno geek. I’m one of the great unwashed who buys an iPod because I want to listen to music and an iPhone because I want to make a call.
A little more than a year ago, I suffered a catastrophic Fire in my home. Thankfully, no one was injured. But ALL of my possessions were destroyed. I mean everything. Including my MAC computer, all of my back ups, and literally ALL of my music. Vinyl, turntables, mixer, etc., and every CD I had ever owned. Gone.
With one exception — my 160 GB iPod. It was in my pocket and it had lots and lots of great music and audio books on it. Here’s the catch. About 35 percent of the material I had purchased through iTunes. The rest had been uploaded from CDs that I had rightfully purchased, or produced, over the last two decades. Music CDs going back to the 80s. The Harry Potter series through book 6, which I had purchased in CD format (at some $60 a pop) and which my 10 year old daughter just loves. And thousands of tracks of mostly local (Harlem) Hip Hop, R&B, House and Trance music which can never be replaced. It’s not for sale anywhere.
The first time I tried to sync my iPod to my newly purchased MacBook I learned that iTunes works in one direction only. Anything in your iTunes library on your computer can be synced to your iPod. But if your computer is new and the Library empty, the only material on your iPod that can be transfered back to the computer are those items that were purchased through iTunes. Were I were to complete a sync operation, all of my non-iTunes-purchased stuff would be deleted.
But, hey, I’m not a tech guy. Surely Apple has a solution. So I went to the Fifth Avenue Apple Store and sought assistance. I mean, there must be a way to transfer the contents of my iPod onto my new MacBook.
But there wasn’t. And to this day there still isn’t. No one at Apple would help me, whether in person at the store or by telephone. Their advice was to go ahead and sync the iPod. But the loss of all that personally important material was strictly “my problem.” This is not a glitch in the iTunes interface. iTunes works this way because Steve Jobs, that arrogant, control freaking little prick, wants it that way.
So, yeah, I hope that Android beats the crap out of Apple at least enough to put a little fear in their hearts. And more. I hope Steve Jobs loses another 50 pounds.
Tim in Sugar Hill
Tim, have you tried this?
http://www.askstudent.com/general/how-to-extract-songs-off-your-ipod-using-itunes/
I’m not guaranteeing it would work — I’ve never tried it. Best of luck.
It’s not clear whether Google can imitate Microsoft in cell phone space with its new offering. Both Linux and Java can, in a long run, be Ahille spots not strenths. Java is a crappy language with a portable run time. Linux as a clone of Unix is a server OS.
1. In enterprise space Linux has pretty low marks for stability. Main usage of Linux in large enterprise space is frontend WEB servers although this slowly changes (after all this is almost 20 years old OS; so it’s high time to show some stability). With limited number of hardware platform for mobile phones this might be less of a problem, but stability issues might hunt Google too (and stability of current Google cloud applications, while unrelated, is nothing to boast about). The fact that Linux design favor server space might be an issue too.
2. Use of Java is a very mixed blessing. It is tremendously popular in enterprise space due to successful marketing from Sun and IBM and it definitely became an enterprise standard. But the language itself is of very low design quality:
Java as an application development platform has high overhead and simultaneously high programming cost platform (way too verbose)
While high salaries solve many problems, the language itself is not sufficiently dynamic to have a genuine appeal for developers. High quality implementation of JVM is the only plus, but classes are and will forever be buggy due to overcomplexity problem and incompatible demands of the marketplace. IBM actually suffers from over-reliance on Java and is losing market share in enterprise space (Tivoli, etc) to more nimble competitors which use scripting languages which are as inefficient as Java but much more compact and dynamic (which lower the cost of programming, debugging and testing). On the other side I cannot imagine that complex applications like Excel written in Java can successfully compete with C++ or Object-C implementations. Open Office troubles are very telling in this respect.
Java stimulates usage worst features of OO including OO fundamentalism when design of myriad of deeply nested classes became the main goal instead of development of usable product. Absurdly high depth of nested classes (Java class hell) makes debugging unnecessary complex and applications fragile: that’s why market for Java testers now is one of the few that still have some openings.
So all-in-all Java is just a new Cobol. I see few advantages for Google here and I see potential low performance problem and stability problems.
IMHO it was due to shortcoming of Java platform that Microsoft managed to became so successful with .NET.
Linux has low stability compared to what exactly? If you’re comparing to to an AS/400, then yeah. Everything’s unstable compared to AS/400s, but then they serve different needs and are hugely more expensive (awesome machines though). In the experience of sysadmin friends (who largely work for large corporations, investment banking, etc), Linux servers typically fail due to hardware problems. And yes while they probably mostly run web servers, that being what most servers host, they also host all kinds of machine critical systems such as databases and transaction systems. It used to replace systems like Solaris and AIX because it was far far cheaper and so could be used far more cost effectively, but by the end it replaced them because it was as good, and far more flexible.
Google’s systems might not be 100% stable, but they also run a larger distributed load than any other company in the world. I’m told by people who would really know that they’re at the cutting edge of this kind of thing (largely because they’ve thrown unbelievable sums of money at the kinds of people who can solve these problems, and treat them very well indeed).
While I don’t like Java much either, Microsoft had success with .Net because it was an easy system for companies with huge legacy costs invested in legacy microsoft systems to migrate to.
the iphone is already obsolete in terms of hardware and certain software. android (along with the g1) moved the goal posts slightly with its gps, compass, gyroscope, etc sensors. and there are plenty of apps (like location- and environment-based services) that make use of these features.
i think mainstream adoption, monetization, and growth of such services will result in apple having to play a bit of catch-up in terms of hardware and controls.
will apple be able to stop android? they will probably be aiming to not get left behind for the time being. they dont have to worry as much about losing customer base as they have to about not finding more new customers.
imho, the reason for the iphone’s success was its processing density (this results in a very responsive human-machine interface.) it was the first realistically viable desktop alternative. you were able see and interact with the internet just like you would from a laptop or desktop, for the first time on a true phone. it was the arrival of a new generation of smartphones(including their OSes.)
Great thread Ed about something I know nothing about. What I did grasp was Apple has 2.5% of the market and makes all the money. This means that going forward if they lose the reason for people to keep buying them, they will have to give up margin. I have the cheapest POC I can get for a cellphone and do nothing but talk on them because I don’t care to give phone companies and electronics firms another cent more than they already get. Good article though, as most people under 25 would leave home without their legs before they would leave without their phone toys.
Edward,
Thanks for a great article that brings back a nice nostalgia of when I was a techie. My disclaimer is, before I went back to school to become a shrink (thus familiar with human psychology), I spent about a decade as a hard core bithead and software entrepreneur. I started with TI-99/4A, moved to DOS, and then Windoz. I wrote major applications for DOS and Windows, primarily in C/C++, but like you, I also had a love affair with Turbo Pascal. Most recently I programmed in Java/SWING which I find to be a total joke, unstable, buggy, and useless outside the corporate intranet. However, my undergrad education was in CS with an emphasis on user interfaces, and in my younger days I also developed a few GUIs from scrarch. Some of the major aps I wrote in the 80s and 90s are names you might know.
But for some years now I have worked in psycholovy and psychiatry, and I no longer considrr myself a techie, early adopter, or technology fanatic. Yet. I think I understand both sides of the equation, the technology as well as the human side, thus my comment about Apple and Android below. Also, I should say that recrntly I dumped WinMo for the iPhone, and my only regret is that I did not do it sooner. I’ve also owned a number of iPods which I think are revolutionary and inovative. On the desktop I still use Windoz but as soon as the next MacBooks are released, I’m going to officially divorce myself from Microsoft.
First, Apple is the only tech company that gets the idea that it is human beings that use their products. All the rest are ran by techies who love to code and nothing else. Because of this Apple is about the only inovative company out there, and the rest can only immitate them.
Second, those here who wrote that the lack of Java or Flash on the iPhone is a problem have obviously never used an iPhone with its superb browser. As stated above, Java is a worthless piece of junk that will be marginalized even more now, with the sale of Sun. As far as Flash goes, I have not missed it on the iPhone, and given its security risks, I don’t want it.
Third, Linux vs Unix (the iPhone’s and Mac’ OS). Unix is the ultimate in OS stability and security. Unix is what banks and governments use, and I don’t think they’re about to switxh to Linux any day soon. On the other hand, Linux has always been and shall always be a hacker’s system, splintered into 1000 versions incompatible with one another. The vast majority of smart phone users won’t miss the ability to hack the code and recompile their favorite app.
Fourth, Google is a great search company with a very good revenue stream from advertising. It’s also grosely overvalued. Their Android is merely a shameless immitation of Apple’s OS. Why bother with an immitation, when 100 bucks can get you the real Mccoy? I predict Google will fail in the OS arena.
Fifth, I understand in 2010 Apple will extend licnses to other wireless providers besides ATT, which should make the argument, “I’m not getting an iPhone ’cause I hate ATT” completely irrelevant.
Sixth, Apple is not going to remain static while Android is ganging up on them. I have gotten used to see truly revolutionary products from Apple, and I suspect in 2010 we’ll see them at it again.
Seventh, the quality of the iPhone, iPod, MacBook as well as the software that run on them is absolutely superb. I just don’t see the Nokias or LGs or Motorolas of the world ever matching the quality and usability of Apple.
Eight, what this post and most comments miss is that people truly love their iPhones. The psychological satisfaction provided by the iPhone and its incredible smooth integration with the human being that is using it is something no Google or Microsoft will ever understand or achieve. As a psychologist and former user interface designer I get what Apple gets and the rest don’t.
Nine, just because for now Apple is married to ATT does not mean you have to be also. I unlocked my iPhone so now I can use any GSM provider, and when I go back to Greece (where I live part time) I just pop in a local SIM card. Plus, I have installed lots of aps that Apple does not allow via iTunes. I even have full access to the Unix root. So, hackers should be happy with the iPhone as well.
The bottom line is that the iPhone is by far the most advanced phone on the planet, and Apple is a company that produces quality produccs that its users love, and which it supports well. I think this Android will be the CPM of smart phones.
Vinny G.
Vinny G, you Apple fanboy, you. Who would have known! I can see you now on the El rocking out to some Queen.
You make some pretty good points. The one thing you said that I think bears most noting is the part about your knowing psychological and sensing the psychological attachment. This is what separates the iPhone from other phones. My wife is not a technophile, but she loves her iPhone. It empowers her – makes her feel smart, hip, even tech-savvy. She has a serious emotional attachment to her phone. There is zero chance she is switching to another device.
There are now hundreds of thousands, even millions of people like that out there in Apple’s installed base. And I have had the fortune of using her phone. I think it’s wonderful (even if the tech geek in me wants multi-tasking or an sd Card or what have you). The iPhone is still the best designed phone on the market.
But… and there always is a but… the iPhone is still a Niche product at the upper end of the phone spectrum. Apple has huge margins on it. This makes them vulnerable. I would liken it to the Japanese cars of the 1970s which came on market in the U.S., dominated in small cars and gradually moved upmarket into every area where the Big Three had any profits – minivans, SUVs, luxury cars, you name it – the Japanese are there too now.
This is what Apple must worry about and one reason they have dropped price aggressively. Can they continue to innovate and dominate the upper end? We’ll see.
Yep, I’ve certainly been using the iPhone a lot on the El, although nowadays I’m listening to more Frank Sinatra than Queen. But the best part is that my students (who are about half my age) think I’m their coolest professor. :)
It’s ironic, but my wife is still using WinMo, and let’s say she’s not the most computer savvy person I know… I think I better get her an iPhone right away, as her computer self-esteem could use a little boost.
I am thinking that another issue that was not mentioned in this discussion is the Steve Jobs factor, and how dependent is Apple on his ability to be actively involved with the company in the future. I guess we’ll have to see what happens next year.
Vinny
Linux is Unix. Banks and government do use Linux and switched to it a long while back.
“Unix is the ultimate in OS stability and security. Unix is what banks and governments use, and I don’t think they’re about to switxh to Linux any day soon. On the other hand, Linux has always been and shall always be a hacker’s system, splintered into 1000 versions incompatible with one another.”
— Your off base in several areas on this one… Linux has been gaining market share against System V in the server market (which is the only market Unix, assuming you are defining Unix as system V, not the various BSD flavors and it’s offshoots, plays in. In the server market Linux (SUSE, Red Hat) isn’t any more splintered than Unix (AIX, BSD, UnixWare, Solaris, etc). I’m a Unix guy, but your Linux criticisms are way out of date. I’ve been watching mission critical applications at major corporations move onto Linux for years now, in the industry Linux is recognized as enterprise class for servers (ie where the real heavy lifting is done, not toys like desktops).
“Their Android is merely a shameless imitation of Apple’s OS. Why bother with an imitation, when 100 bucks can get you the real Mccoy?”
— Why? Because Apples OS only runs on Apples hardware, and because competition is good for the consumer. We’ve already got one monopolist abusing their market share in the PC arena, we don’t need another one in the in telecom. I own several Macs, partically because they are a good operating system, and partially to vote with my pocket book against Microsoft’s war on it’s customers (Vista, DRM, draconian activation, etc)
Nice post. I am a recent Iphone adopter (still doesn’t sell in India). But I think the war of phone OS is not fully started.
The earlier war that Apple lost was probably a bit different. Microsoft-Intel super structure, in my view, gained from workplace adoption. Microsoft was the saviour of sorts when it launched hardware independent Windows and MS Office. It created a whole industry of software programmers. Windows provided the platform for various apps (like Office, internet browsers, games etc). Reads like apple-iphone strategy doesn’t it? Today more viruses attack MS because it runs some of the most important installations. The scalability is huge.
It is still not clear what is the equivalent of “enterprise / work place adoption of Microsoft” in the phone wars. People believe it will be music or consumer-centric media (video/books etc). But what will it be? That still remains to be seen.
——–some notes—————-
Sadly, in its war with Netscape MS became the very devil it killed and became a target of ridicule.
Apple has made the correct initial moves in the phone wars. It created a platform with an environment for apps. But Apple wants to address security in a way MS did not. So it decided to lock down the core OS. Anyways let us watch.
——————————-
Here’s an example of why Android is not a threat to Apple, at least not yet:
http://www.reuters.com/article/technologyNews/idUSTRE5AJ1EU20091120
“Rochefort said the company has cut back on investment mostly due to weaknesses of Android’s application store.
“It is not as neatly done as on the iPhone. Google has not been very good to entice customers to actually buy products. On Android nobody is making significant revenue,” Rochefort said.
Games for iPhone generated 13 percent of Gameloft’s revenue in the last quarter. “We are selling 400 times more games on iPhone than on Android,” Rochefort said.”
Apple’s iPhone is built on top of Linux, as is Android. It shouldn’t be hard for iPhone App developers to adapt their code to Android.
Another Mac fanboy here.
I don’t think this is, “a repeat of the Macintosh-PC Wars of the 1990s”.
And it is not really the “Android menace”. I think it is more the “miniaturization menace” and the transition affects all electronic product categories …
The overriding driving force here is the piecemeal migration of the desktop computer to the cell (smart) phone, which is fast becoming the hand held computer. This transition is enabled by more powerful hardware and improved software. Apple has been smart enough to stay out front and sell this transition piecemeal through good UI, marketing, and quality products, as has already been mentioned. Google will do well also as they too understand UI, and have VERY deep pockets.
Computer OS languages are like human languages, they are tools of dominance and the installed base does tend to determine share of the pie. But operating systems are not as critical as they were in the 90s when non internet stand alone aps were the main thrust of computers and determined computer choice, i.e., for business aps you would buy a pc, and for graphics aps you would buy a mac, but both were essentially geared towards business productivity and an upscale buyer.
Since then the development of the net has changed the playing field through the development of web browsers that all speak common or ‘translating languages’ (HTML, JavaScript, and CSS), and now there are plenty of aps available on line, or aps can be put on line, and made available through all computers, including all of the hand held ‘smart phones’. This has also made content access and creation the main thrust of computing as opposed to the predominantly business use in the early 90s.
Apple will continue to be a player as it is well aware of the overriding driving force of the migration (miniaturization), and is well positioned for the tasks of miniaturization with its experience in the mac mini (you could see where they were going when they first came out with it). The mac mini is only 6.5” square and 2” thick and has great power and connectivity. And look at the Imac with all that hidden power (read miniaturized power). It is only a matter of time before the desk top is gone and you will come home and wifi your hand held computer (i phone, Android, etc.) to your wall screen and keyboard (talk board). That Dick Tracy wrist watch is here.
Lots of folks buy utilitarian products, but lots more, given our logo lemming society, buy the added on status and many more buy the love of a fine product that Vinny speaks of. I’m a lover, I love my Macs!
I think the the next biggy, and what will turn the markets upside down, will be ‘no on going service charge’, or, ‘severely reduced service charge’, ‘Neighbor Link’ products that will bypass and/or integrate with, for a lesser fee, the corporate choke hold of centralized controls of net access. Buy the device and plug it in or simply change the battery once in a while. Think open source walkie talkies (smart phones) on roids where the ubiquitous devices roll it all into one and become the backbone of the local open commons shared content net.
Wow. We have come along way from that old 128k mac!
I see the 80’s parallel and the PC’s Network Effects as well, but perhaps like you I made the same prediction when the iPod came out. The iPod succeeded despite the avalanche of cheaper competitors. The iTunes store gave Apple the Network Effects in that round.
As of this moment, “there’s an app for that” is the dominant Network Effect.
I’d like to see Android and an open platform pull the Network Effect and market … but Apple managed to hold iTunes. It might go their way again.
“Sadly, in its war with Netscape MS became the very devil it killed and became a target of ridicule.”
Microsoft’s treatment of the browser wars wasn’t a change in direction for them, they have always owed most of there success more to business moves that are at best ethically gray, than to technilogical accomplishments.
They were born out of selling an operating system they didn’t own… their real initial surge came from stealing GUI designs from Apple (who stole them from Xerox).
Once they got defacto monopoly power, they began heavy handidly forcing contracts onto PC manufactures saying they couldn’t sell a PC with any OS other Windows, or Microsoft wouldn’t license Windows to them at all (Anti-trust barriers to trade anyone?).