Gruber was first to convince me that Apple didn't care about the business that Dell was in. Dell could have it. No margin.
Apple believed they built computers for the "elite" consumer who had taste or money or both and wanted a premium experience. They played there because that's where the margin is.
This situation (highlighted by iPhone vs. Android) is a stark departure for Apple, and it probably illustrates one of two things:
1. The competition is better, or 2. The switching costs for phones is much lower than for computers, and by costs I mean both money and the hassle of migrating data and applications.
Google is doing an amazing job on both fronts. If the iPhone didn't exist, Android would be the clear leader in this market. And when it comes to switching costs, Google is eradicating them: I use Gmail, Google Calendar, and Picasa. All work on both platforms very well. And I use Google Contacts as my primary rolodex.
I don't use Mobile Me because Google provides the equivalent for free (Google's services are probably better, really). Apple really doesn't have any hooks into me.
If Google can deliver a compelling alternative to iTunes, I could move tomorrow and the only costs I'd incur would be walking away from the $30 in Apps I've purchased.
Compare that to my trying to move from OS X to Windows.
Apple is rightly terrified of Google.
And it probably gets worse when the Chrome OS hits the market.
I love love love my MacBook Pro and my iPhone. But increasingly they are delivery vehicles for Google services. The irreplaceable part of that equation is Google, primarily because I'm not interested in Microsoft's or Yahoo's or Apple's alternatives.
And my argument revolves around iTunes. The sheer amount of content that apple has sold through iTunes would surely suggest that moving to another platform would be a major barrier to transferring to another service.
As you said, Google indeed is doing a fantastic job on a lot of fronts. But from what I see, in this "war" Apple is accomplishing a well executed flank attack by controlling both the hardware and software platforms.
Apple will never get into the search business, but there are so many outliers that many companies (Google, MS, Yahoo etc) have that Apple can out-flank and simple dominate in the long term.
In addition, I'm convinced that Apple is sitting on the AppleTV since they don't yet in their eyes have enough control over games, media content and associated distribution. But, they are headed there, and I would expect that the app Store will soon make it's way to the apple TV (and variants) platform.
That will not continue to be true for long. The future of media consumption (well, at least music consumption) is from streaming services, which don't make you deal with syncing. iTunes may be user friendly, but the whole sync process is still time consuming and frustrating. Also, all music that's been sold on iTunes for over a year is DRM-free, and you can 'upgrade' your older songs for a relatively modest fee if you want to.
There's an argument that video content (which is still laden with DRM) will provide adequate lock-in, but that will probably start streaming too in the next year or two. And I think it's less of a big deal to most people if they can watch a TV show on their phone, anyway.
I am really looking forward to the day Apple will stop calling the Apple TV a "hobby" and do something cool with it. The App Store (or an App Store) might be the way to go…
As for iTunes, as jkincaid said, the catalog is now DRM-free so it's not as much of a lock-in problem. But right now, there isn't much to move your music to. You can replace it with services like Pandora and Last.fm, but your music library would stay where it is. However the acquisition of Lala.com and the rumors around itunes.com (if they become true) have the potential to maintain Apple's control of the music part when it moves towards a completely streamed system. And in that domain, Apple's mindshare is already so huge that it would assure their success if they execute on time.
What market? Nor iPhone nor Android are the leaders of any market, either separated or combined. Add the marketshare of iPhone and Android together and you (almost) get RIM's marketshare. Double that and you get Nokia's minus a few percent.
Enthusiasm is generally an alright thing to have, but the enthusiasm of Android fans was always unrealistic and it's becoming off-putting.
The touchscreen mobile phone market.
Sit back and pass the popcorn.
--Joel Spolsky, Strategy Letter V
http://www.joelonsoftware.com/articles/StrategyLetterV.html
Google is trying its damnedest to commoditize the smart phone business. It would love for Apple, HTC, and everyone else to go down the same road PC manufacturers went down and cut their own throats competing on price. Only instead of taxing the manufacturers with a fat fee for each copy of Android, they will make their money owning the advertising and search business.
I guess the question becomes: Why does Apple think that it needs to 'own' the (smart) phone business to be successful? They've been able to remain popular and profitable while keeping their products as a premium brand. Why does the cellphone market need to be so much different?
Because Microsoft is making money selling software and commoditizing hardware, while Google sees both software and hardware as a compliment to their business (and so, gives software away for free (hardware is commoditized enough)). By comparison, Apple is trying to make profit off markup in precisely those areas: hardware + software.
In short, the numbers are very different. While laptops are now split nicely at $1000 (<1000 - mostly PC's, >1000 - mostly Macs), what we're talking about is devices Apple wants to sell for $700 soon costing less than half of that for similar "Android" manufacturers. I forget the marketing-speak explaining this, but that gap is a big problem.
In summary, Google wants a world where both hardware and software are a commodity. For Apple, this is bad, bad, bad, as that's precisely the market they're trying to make their markup.
Really, how? And so what? I wouldn't want a mutual advisor or board member either if I was Jobs/Schmidt.
Haven't there been rivals (even bitter rivals) since the dawn of capitalism? As long as everyone fights legally/fairly, what's the problem?
When I did IT at a UPS call center, managers would take shots at FedEx at least once a week in morning meetings (higher-ups were so pissed that FedEx was in "Cast Away", it was hilarious). People switch sides and take better jobs in any industry. Again, as long as there's no NDAs being violated, what's the problem?
Is Apple out of line with the patent issue? Other than maybe that, I don't see what's abnormal.
>Really, how? And so what?
He gives specific examples in the article.
"I.e. it’s not particularly interesting that Apple hired Pittman, or that Google lost him, but it is interesting that Apple poached a director from Google, period. That didn’t use to happen."
"Mr. Campbell was forced to choose, and according to a person with knowledge of the situation, he dropped his formal responsibilities at Google, although he is still informally mentoring executives there." This is new, they have never asked advisors to take sides.
In addition its not mentioned here but Jobs use to advise Sergey Brin. They were friends and helped eachother. This is no longer true. This is new...
"[Sergey] Brin was also known to take long walks with Mr. Jobs near his house in Palo Alto, and in the nearby foothills of the Santa Cruz Mountains. According to colleagues, they discussed the future of technology and planned some joint ventures that never came to fruition – like a collaborative effort to develop a version of Apple’s Safari browser for Windows." - http://www.nytimes.com/2010/03/14/technology/14brawl.html?pa...
(Obviously Apple could adopt a royalty free format, but would they unless forced to?)
Looks like someone's still a bit touchy about microsoft. http://en.wikipedia.org/wiki/Apple_Computer,_Inc._v._Microso...
Hmm...I think I might submit that.
Spot on.
I found this paragraph towards the end interesting: I was thinking recently about how it can sometimes be difficult for two guys in a garage to get traction on their ideas/products, because to really leverage them you might need a whole set of products around it. They're good ideas but would be a part of a big system that you can't build unless you're Google, Microsoft, etc. (e.g. if you want to do something where you access the data of emails, you need to piggyback on other companies' email systems)
So, I found this last part interesting because it puts Apple in a similar situation as the two guys in their garage, at a larger scale, where they (might) have to develop their own map service, where they have to get involved more in online services (MobileMe), etc., even though it's not their core competency[1]. The same way I would not use the two guys' product if it doesn't work with my existing email account, some will get an Android phone just because it integrates perfectly with their Gmail and Google Voice account.
That's something Apple will need to focus on more IMO. We're heading towards having everything just online (pictures, documents, backups, music…) and Google definitely has the advantage there.
[1] I'm not saying they don't know how to build online services. iTunes is a proof that they do, but it doesn't (really) have an online front-end.
Any Apple Employees?
Having said that, I saw probably 10 iPhone users in the same carriage, and as yet they have no truly compelling reasons to switch.
I'm strangely pleased at how rattled Apple are (by this account at least).
“Most people make the mistake of thinking design is what it looks like. People think it’s this veneer — that the designers are handed this box and told, ‘Make it look good!’ That’s not what we think design is. It’s not just what it looks like and feels like. Design is how it works.”
That quote was curated by Gruber: http://daringfireball.net/linked/2009/03/20/design-is-how-it...
