Let me start by saying that I love my iPhone. I can barely function without it any longer. Seriously, I went to a wedding last weekend in northern Michigan and had no reception for 4 days! It was brutal. Your sympathies are much appreciated. For all of you planning weddings out there, try to consider the mental health of your electronic addict friends before scheduling. Enough about me and the daily crosses I must bear. Back to the iPhone’s demise.
Repeat of the PC wars?
Before we proceed, a little history lesson (don’t worry, it’s short). Back in the early 1980′s, Apple dominated the PC market. They were titans. Controlling, with an iron fist, the hardware and software for their beautiful machines. Then along came Microsoft. They didn’t really care too much about the hardware. They allowed everyone to go ahead and build their own machines: IBM, HP, Dell, Gateway, Joe & Mary PC Nuts, and anyone else with access to computer hardware. These computers were ugly, grotesque, gargantuan, and, above all, cheap. The result: Microsoft came to dominate the world while Apple, for 20 years, languished on the brink of destruction.
Of course, the last 7 or 8 years have seen a great resurgence for Apple. It started with OS X and some good new laptop computers, was greatly advanced by the iPod, and has absolutely exploded with the iPhone. So much so, that in the past few weeks Apple has passed Microsoft in market cap. That’s right, on paper, Apple is now a bigger company than Microsoft. So much for Apple being the underdog.
But I fear that Apple is gearing up to make the same mistake they did 30 years ago with the PC. They control both the hardware and software – including a dictatorial rule over the apps that are allowed to run on it. Contrast this to Google that is basically just writing software and allowing HTC, Motorola, Samsung, and any other hardware manufacturer create their own devices. You can also bet your bottom dollar that Microsoft will take the same tact. In fact, when they announced the release of Windows Phone 7 they announced they’d be partnering with Dell, HTC, LG, Samsung, Sony-Ericsson, and more for hardware; and Verizon, AT&T, T-Mobile, and Sprint for carriers.
So what does all this “software for any hardware” mean? It means that non-Apple phones are going to get cheaper and cheaper and the data/voice/text plans for them are also going to plummet in price. Apple has a huge head start and a great product. They are not going to die any time soon. But the question is, even with this great product, can Apple count on a huge customer base that will be willing to pay a lot more for their devices?
If the PC wars of the past are any indication, the answer is, “No,” and Apple is in trouble.
Actually, your history is a bit off. First off, Apple has never DOMINATED the PC market. If anything, they did and still do dominate that segment of the market that does ANYTHING creative. Secondly, Microsoft didn’t do anything special. They didn’t ALLOW anyone to build ANYTHING. IBM (actually a bunch of marketing people at IBM) decided they needed to build a desktop computer. Without actually designing anything (they contracted everything out to companies that could build each subassembly) they came out with the PC (what they really did is coin the term). IBM needed an operating system, so went to Digital Research Incorporated in Pacific Grove California where Gary Kildall had written the CP/M operating system for microprocessors. He didn’t want to have anything to do with IBM, so sent them packing. They then approached Microsoft, who had no operating system but knew of someone in nearby Bellevue who had stolen a copy of CP/M’s source and had already ported it (without realizing it) to the very microprocessor that IBM planned to use in its PC. Microsoft bought the stolen system fore $50,000 and offered to license it to IBM. And try not to look to closely at ANY of Microsoft’s products – you might notice “similarities” to other company’s products.
Hey Joe,
I don’t disagree with you about how Microsoft achieved their dominance in the market place. My post wasn’t a praise or complaint about Microsoft, it was simply saying that the model they used – licensing the software to anyone that wanted to build the hardware – was how they ended up destroying the strong foothold Apple had in the personal computer market.
And now Google is using this same model to go after the iPhone – and it’s working. Just last week, Gartner reported that Android has now surpassed iOS in worldwide sales. While Apple is still a dominant player, they definitely should be worried. At the very least, they need to get on to more carriers or they are going to continue to lose market share to Android.