Apple and the mobile market

Tom Dunne

Interesting article from Wired magazine that asks will Apple make the same mistakes with the iPhone as it did with desktop computers, drawing parallels with Google and Android.

Linky.

The short history of the computer industry is dominated by two well-known stories of business triumph and defeat. The first is the story of how mainframe makers failed to take the personal computer seriously until it was too late. Most of them faded away, and those that didn’t still failed to dominate the PC industry.


The second is the story of how Apple Computer refused to license its innovative new operating system to other hardware makers in the early days of the PC revolution and ended up ceding the market to Microsoft, which licensed its operating system far and wide.


The temptation to fit every new computer industry business conflict into one of these two molds is strong, and frequently surrendered to. For a modern example, look no further than the current battle for the mobile market between Apple, Google, RIM, and others. The first story may end up applying in the case of RIM, which might have waited a bit too long to recognize the primacy of the touchscreen and the mobile application marketplace. Or perhaps it applies to Microsoft, which refused to let go of the idea of shoehorning Windows onto a phone until very recently (or not).

But I want to talk about the second story, the one about the company deciding not to license its operating system to third-party hardware makers. In the mobile-market version of this story, Google is Microsoft, Android is Windows, iOS is the Macintosh operating system, and Apple is, well, Apple. The pieces match up so well, it’s barely even an analogy. The lesson seems clear: unless Apple learns from its past mistakes and opens up its mobile platform, it’s going to end up with a Macintosh-like minority market share while Google licenses its mobile OS to all comers and the Android phone becomes the Windows PC of the new mobile computing era.

Could you see Apple ever licensing IOS to other hardware developers? Not likely, I think.

So, does that leave them vulnerable to losing market share by simple volume of numbers of Android phones?

Possibly.

DonRosco

Some would call it a mistake, some would call it a choice. Whatever it is, it works for Apple, they're making some fat loot, and people who don't like tinkering with their computers and phones love their products. Personally, I wouldn't buy an apple computer because the price doesn't justify it, I like messing around with windows, and the range of software pales in comparison to what's available on PC. With the iphone, it's the other way round, somewhat paradoxically. I would have moved to android this gen if it wasn't for the range of apps available. When android catches up a bit, i'll probably move. As a company, I really dislike Apple. They're worse than microsoft for **** behaviour.

JohnC.

They sell many millions of each model and probably at a rather nice profit on each unit, so I'm not sure they care all that much. I don't think they are out to dominate the market. If they were, I'm sure they'd have more than two phones on the go at any time (a current gen model and a last gen for the cheaper end).

While the Mac may be a minority, it is very profitable for them. I'm not sure the article is right to call it a mistake. Many PC companies have disappeared while Apple are rolling in money. They won't be crying if the iPhone performs that "badly" into the future.

Rabble Rabble

I think people who think that Apple dont care are wrong. Steve Jobs wants to win this time.

Siracusa is correct in his arguments - the thing they need to do is open up to all possible carriers worldwide. Manufacturers dont matter in the iPhone age - FoxConn is making them all anyway behind the scenes. Apple will get aggressive on prices, particularly the iPad and the lower end iPhone in the next year as well.

And the OS matters. If something like the 3GS runs iOs 4.x for the next 1-2 years, it can continually be reduced in price as new models of iPhone 4 are introduced. So a low end phone will run the latest iOS. Meanwhile Android 3.0 has very high entry specs - something like 1 GHz processor, and 512MB as minimum requirements. That means they wont be cheap.

The 3Gs is the one to fear for the competition.

Look at this. The online tracker for iPhone 4 and iphone 3GS 8M across England as of Sunday 8th august. 02 got a huge shipment in Thursday and everything was available whenI checked on Thusday afternoon ( academic interest - have to keep my 3Gs for while).

Notice that the 16G iPhone 4 is sold out and the iPhone 3GS 8M is totally sold out. 32G is not selling so much.

JohnC.

Rabble Rabble wrote: »

I think people who think that Apple dont care are wrong. Steve Jobs wants to win this time.

How can he win when they don't even compete in the cheap end?

Rabble Rabble

Kahless wrote: »

How can he win when they don't even compete in the cheap end?

sigh.

I answered that with the 3GS.

JohnC.

It won't happen. And while cheaper than the latest, it's still not cheap and won't be in the near future.

Rabble Rabble

Kahless wrote: »

It won't happen. And while cheaper than the latest, it's still not cheap and won't be in the near future.

Let me repeat:

The 3Gs can run iOS 4.x. The latest version of the OS, it runs it well. The equivalent Android phone running the latest Android needs a 1Ghz processor and 512 MB of RAM. As more models based on the iPhone 4 come out the 3GS - which will be still in production - will get cheaper and will run iOS 4 and probably iOs 5. There is about 2-3 years left in that model and in 2 years they will be giving them away for free on cheap contracts.

The very cheap non-smart phone market doesnt matter, if that is what you are referring to.

JohnC.

It still won't happen. It'll be dropped the same as 3G was dropped when 4 came along. Apple don't keep old generations going like that.

Rabble Rabble

1) They haven't dropped the 3G in terms of iOS support.
2) The 3GS is a *huge* improvement over the 3G. Look at the way they both run iOS 4.

My 3GS is utterly happy running iOS 4. I bet it will run iOS 5 fine too. Apple are deliberately positioning the 3GS as the lower end version of their lineup. Thats why the 16G and 32G models were discontinued and only a new 8G version remains: to not compete with the 16G and 32G iPhone 4 models.

In the next few years they will keep the form factor of the iPhone 4, but increase speed. So we will have an iPhone 4S 16G, and 32G, an iPhone 4 16G, and 32G and an 3GS 8G which will get progressively cheaper as the cost of the chip and other components drops in price and there is less risk of high end cannibalisation.

It is a perfectly serviceable machine. It will be around for 2-3 years. Apple want this market and are well aware of their previous history.

uvox

I don't think they will make iOS available to OEMs. The evidence is to close off options (pace Flash) rather than extend them. Apple doesn't have a big expansion record as a company and is sitting on piles of cash (actually all the big SV players and MSFT are too).


In terms of total numbers, Android will obviously win out over iOS. However, that's never been Apple's strategy. Instead, through its app stores and developer programmes for apps (in this sense Apple apes how MSFT acheived Windows hegemony) along with superior design and UX the iOS-based iPhone will remain a premier brand - driving sales of other Apple products too (evidence of this happening already: http://www.ft.com/cms/s/2/00265a20-9430-11df-a3fe-00144feab49a.html). Therein - I think - is a limiting factor - are there enough iPhone app developers? Not in Ireland anyway given how busy some of them are. Plus, the natural UI of the iPad presents further challenges - there aren't enough talented developers out there to take advantage of what's posible right now (plus the HCI guidelines are not there for gestures on the iPad yet, they refer to basic iPhone ones) - but all that will change over time.

See also: http://www.ft.com/cms/s/0/29360552-89f7-11df-bd30-00144feab49a,dwp_uuid=31a10250-e970-11de-be51-00144feab49a.html