Home Phone and Internet $60/moRevisiting Apple's iPhone strategy
In the post I wrote about Rich Miner of Google saying that the Android mobile software stack will gain more users than the iPhone, several people commented. The general consensus is that Apple is the BMW of the personal computer industry and is the standard for innovation that its competitors, with far more market share, follow. Android is a non-factor.
The challenge for Apple is to keep coming up with proprietary products that fuel its business model, which is based on innovation and R&D around both hardware and software. Since Steve Jobs returned to Apple, the company has had a series of hit products that don't dominate markets (with the exception of the iPod) but appeal to an elite and influential minority. Even Apple's advertising makes the marketing from competitors look tedious and uninspired.
Apple's tightly bound software and hardware provides unique differentiation in a world of mostly undifferentiated PCs and mobile devices. RIM's Blackberry also has had success by controlling its entire product.
Microsoft has made progress with its Windows Vista operating system, and its OEMs (original equipment manufacturers) have created slicker PCs and laptops to run the software, but the Macintosh is still considered a superior product overall.
Jobs is clearly making the right choice for now not to license the Mac, iPhone, or iTunes software to hardware makers. Getting into a battle for OEMs with Microsoft, Google, Symbian, RIM, and Palm, etc. is a losing strategy at this juncture. The best mobile operating system and user experience doesn't necessarily win the deals, even with Steve Jobs as the chief negotiator. Microsoft is extremely capable in working with OEMs and developers, which is a key factor in building out a platform.
On other hand, it would be interesting to see what developers could do if Apple open sourced the iPhone software. The mobile Web experience is the new center of attention and R&D spending in the tech industry. Google's Android will be a good test case. If Android were to become successful, due to its openness and developer community, Apple would feel the heat. An army of smart developers with Google behind it could create a next-generation mobile Web operating system and application platform that challenges Apple far more than the current set of incumbents.
But Jobs is uniquely talented and a master of total product design. Handset manufacturers come up with dozens of phone designs per year, but haven't been able to duplicate the user experience of the iPhone. You could say the Nokia N95, the HTC Touch, and other smartphones have similar capabilities, but they don't match the slickness, pinching, and other capabilities of the Apple device despite its flaws (no 3G network and inaccessible battery, for example). The iPhone is also part of a family of personal devices that will become even more integrated.
Throwing open-source Android into the mix could give mobile device makers a better platform to take on the iPhone, but they will be mostly competing with each other for market share.
The iPhone will continue to be the BMW or Lexus of mobile devices, with modest share and lots of profit and envy from other mobile device makers. However, Apple could stumble, failing to keep up the rapid pace of innovation, but I wouldn't count on it as long as Jobs is in the house.
Dan Farber is editor in chief of CNET News. He has more than 25 years of experience as an editor and journalist covering technology. E-mail Dan.
I agree. I used to think Apple should open up, but in reality they do a much better job of ensuring smart integration. You also can't beat their in-store experience. I personally am willing to drive to Denver vs going to a Best Buy (big mistake on Apple's part because BestBuy is an abomination of a retailer) because Apple store employees are truly empowered to take care of the customer, right now. Try that at a any big box. That's why PCs will continue their downward slope.
By the way, my next car: BMW
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Apple uniquely also makes the entire widget. This is an enormous competitive edge which competitors cannot match. Android may have a hoard of developers, but just like Linux, it won't ultimately be competitive or as good as an Apple product - where the software can be tightly integrated with the hardware, creating a better user experience.
Apple has their own stores and has created a third party ecosystem. This is another huge advantage over other competitors. There is not only the iPhone, but all the accessories that can be purchased for it that make it a more compelling product for the consumer. Just having a variety of cases from many manufacturers allows users to personalize their iPhones - what other smart phone users can't do. Apple's stores also allow users to entire the Apple family of products, which creates a huge momentum for future purchases and creates brand loyalty stronger than competitors such as Sony - whose own stores are pathetic in comparison.
Apple is a world onto itself with iPhone as just one door.
So this article isn't really about Apples acknowledged superior design or whether everyone holds at least some grudging admiration for Apple's products and innovation. It's about Google's recognition that the iPhone very likely won't penetrate the whole market; how Apple shows no intention of licensing any of their magic juju at all to those manufacturers who are likely to sell by far the most handsets; and that Google's entire business and intention is to serve the internet to the masses, not just those for whom Apple fits to a tee. Google is not at all a boutique purveyor of fine computing experience for the discerning few as Apple clearly thrives on being.
Google would be idiotic to bet the farm on Apple becoming the major purveyor of Internet In Your Pocket. Others will probably assume that mantle and Android is a big tool to help them along. Google sees a billion eyes running through their search and ads, not a few million.
On Iphone - great product. But I refuse to switch my company to Iphone because I don't want to deal with ATT. Nothing wrong with ATT itself, its just I don't like to be forced to deal with one company only, and by the way they are more expensive then T-mobile lets say. Businesses look at operating cost, and I don't see why I have to pay $60 month exta per cell phone per month just because its Iphone.
Customer service - maybe their Apple store has good support, but common. Today business expects 4 hour responce, onsite support. And by the way, Apple's phone support is not that great + you can not extend warranties as long as you can do that with other manufacturers.
97% of the world's personal computer users disagree, and buy something else.
HP is the market leader, with the world's best selling personal computers, and superior products.
Who can beat iPhone 2.0?
http://counternotions.com/2008/03/10/iphone2-competitors/
Compare that to the plethora of phones, pc's and third party software on other vendors platforms. Do they work well together? Are they reliable? Are they secure? Are they fun and easy to use?
If open source is so good why are we not running Linux on our home computers? I predict that android will become the number one platform for cybercrime as a result of it's open system.
We should not pander to hackers and geeks when it comes to technology. Our focus should be on the consumer who wants something that is fun, relaible and easy to use. Choice is a bad thing for people who are technically illiterate. I would go as far as saying that restricting what consumers can do is only right and proper. They need to be protected from their own stupidity. The internet is a dangerous place for the unwary.
Apple doesn't care about "dominating."
Apple's business model is to sell the "whole widget." Apple wants to ensure that anything with the Apple logo runs well every time. In order to accomplish that, Apple must control the hardware and the software. Licensing the software is different from, and would undermine, that business model.
If the integration of hardware and software is so wonderful, they would open it up to competition, but they don't. This is how they can charge about $500 for a new superdrive for a macbook pro -thank goodness i paid the $349 for an extended warranty ( I guess). Or an imac I bought for my job that was barley used but needed a new board. How much do you ask? $900 -it only cost $1,100. Take for example the ram from there site as compared to other sites on the net. Apple products are made for people with a lot of play money, but my computer lab i built for the kids I work with, has to be stocked by win xp pro machines that I paid $400 dollars for several years ago and still run well. And for the price of repairing one imac, I can upgrade several of the machines. Is there really a need to charge so much for their pc's. I don't think so.
The iPhone is different. It will attack the corporate market with it's new business features and it will completely take over the handheld gaming space?the very two markets Apple has ignored in the past.
Sure there are a lot of BIG players who were in the Smart Phone first but the same was true with the iPod. MS and Sony have poured gobs of money into the mp3 player market and have been so "open" with other partners. What good has it done them?
Now in the smart phone market Sony is so excited about it's Symbian (Nokia) OS that it is doing what? Licensing WinCE? And Symbian is in all those billions of phones Nokia sells. Neither WinCE nor Symbian nor Android will have anything to compete with the new Apple SDK.
The Mac will continue to gain market share and Apple will continue to outpace all other PC manufactures.
Everyone keeps thinking of Apple as the Apple of 1998, this is post 1999 and a completely new Apple.
Those still thinking of Apple's market share need, to look at the speed in which Apple is gaining and then calculate how long will it take Apple to hit 30% of the market. If Apple continues it's stride, in 10 years, Apple will be responsible for a Tectonic shift in computing that will open every blind PC user to the fact that there is a choice.
When Linux becomes easy enough to install, it will also erode Windows share.
Watch it happen...
Buckle up and enjoy the ride...
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by JadedGamer
March 17, 2008 7:52 AM PDT
- Apple DID license out manufacture of Mac clones, and it almost killed them (Power Computing); one of the first things Jobs did when he returned was to cancel ALL such deals because, unlike the Excel-gazing short-term-focused bean counters in suits, he thinks far ahead. Yes, Apple made money from the licensing deals when the license fees were paid, but lost much more in revenue six months later because people bought the clones instead of Apple hardware (as far as I recall).
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