Steve Jobs Just Doesn’t Get It…

Steve really doesn't understand what it means to build a platform.  Apple's deicsion to close the iPone ensures its success only as a niche product.  His recent comments about the iPhone are telling - quoting from the MSNBC article here:

“You don’t want your phone to be an open platform,” meaning that anyone can write applications for it and potentially gum up the provider's network, says Jobs. “You need it to work when you need it to work. Cingular doesn’t want to see their West Coast network go down because some application messed up.”

Its pretty groovy that Cingular (AT&T) has chosen to market the Apple iPhone, but if Cingular was really worried about 3'd party applications running on their network, then they wouldn't be selling the Samsung Black Jack, Cingular 8525, Palm Treo 650, Palm Treo 680 or Palm Treo 750, Nokia E62, Cingular 3125, Cingular 8125 Pocket PC, BlackBerry Pearl, BlackBerry 7290, BlackBerry 7130c, or BlackBerry 8700c.  Others have noted the same thing, for example this item at ArsTechnica from Clint Ecker.

These are all open platforms; 3'd parties are free to write - and monetize - applications for them.  This is good for Cingular as well - customers are attracted to their service because their phones can be more usefully than Cingular can make them by themselves.

Being an open platform has long been a key factor in the success of many new products.   The first Palm devices succeeded where others failed because they made it easy for developers to write applications and for users to load them on a Palm.  Apple has had success here as well - one of the drivers of the early Macs was HyperCard.  Lots of people bought Macs so they could run any number of the many HyperCard applications availed.  I've always belived that Apple killed HyperCard becuas its openness limited their ability to monetize the HyperCard eco system.   They had no success with this by making HyperCard part of the Claris applicatoin suite.  

One of the things that has made Microsoft successfully is our focus on being a platform.  Yes, the Mac OS is a platform as well, but not to the extent of the Windows, Office and Visual Studio franchises.  Why?  Because we have long know that enabling others to leverage our platforms to make money is of strategic importance.   In contrast, Apple only enables others when it suites their purpose.

The advantage of openness from a platform perspective is clear - profitability and scale.   The Windows PC business dwarfs Apple - it long has and it will continue to do so.  Can Apple remain profitable? Of course!  But the business eco system around Apple will always be more limited than the Microsoft eco system because of Apple's desire to monetize everything.  

Just look at the financial numbers for Microsoft and Apple - there really isn't any comparison.  If you add in the Windows based business from other companies such as Dell, HP, Lenovo, AMD, Intel, and thousands of others, the ratios become even more lopsided. The cynics will point out that this disparity is because Microsoft "doesn't play fair".   I call bullshit on that sentiment - we (Microsoft) have our issues and make mistakes, but we fundamentally "get it" that maintaining a profitable eco system around our products is of long term strategic importance: it builds virtuous circle and leverages network effects.  In contrast, apple seemst to go out of their way to avoid these models.

Of course, Apples decision to close the iPhone can be reversed - even in a controlled way at any time.  But Steve should be more clear - Apple's goal is to monetize as much of the iPhone revenue as possible and (for now anyway) this means developing and selling all the applications that run on it and monetizing any recurring services based on those applications.  Its the same model as the iPod and Zune and I don't think it is a model that can sustain long term success.

Comments (6)

  1. Brody says:

    I agree but here are a few points:

    – Windows Mobile 6 needs to be very good in order to attract more converts (and halt iPhone converts). People will trust Apple (even though they have no reason to, clever marketing [lies]).

    – Windows is far superior to MacOS but consumers don’t get why – Microsoft needs to tell the consumers about this fact and stop expecting their money hungry partners to spend any money on advertising Windows.

    – Microsoft needs to go back to a universal DRM, but make it free for all users/OEMs. Advertise saying "if it’s not U-DRM, you’re being screwed" and show how iTunes DRM stops Apple software from working with Media Player. DRM may be Apples greatest asset, squash it no matter what the costs are.

    – Windows NT8 needs to be even more visually-stunning and needs to have fantastic built in consumer-targeted applications. And what’s with the pricing? In Australia, Vista Ultimate costs more than a notebook! That’s crazy! I would have halved all the prices, it’s not the consumers fault that Vista took so long to build… it was just a mistake that needs to be accepted and learned from.

    I’d love to here your thoughts on what I have said Richard (mrmckeb [at] hotmail . com), thanks.

  2. GAURAV SHARMA says:

    Network effects and Virtuous circles aside, the bottom line is no Windows mobile handset seems to match up to the kind of cohesion provided by Apple’s hardware/software combination in the iPhone. If you want to buy music legally from a store that actually works, use Google maps, watch widescreen video (standards based, not some proprietry Microsoft WMA/WMV format) and have a phone that *actually works well as a phone* then you get an iPhone. Hardly any phone user writes software for their phone anyway. Why should they need to?

    Open standards are no excuse for sheer incompetence and carelessness.

  3. And MS doesn’t get it either because while it gets the open platform thing, it doesn’t get the whole "design" thing because you’ve got 50 cooks in the kitchen instead of one like Apple.

    Now if someone could fuse Steve Jobs with MS Programmers and Logic…. OH YA! THAT’S MY JOB! 🙂

  4. Looks like Apple has decided to lock down the iPhone, and not allow 3rd party developers to put their

  5. As for the iPhone and 3rd party development.  I like most folks that develop software for mobile devices would love to see the iPhone wide open but there are actually good reasons why Apple wouldn’t/shouldn’t make it an open platform.  Chief among them is security of course.  This could be handled by walling off the low level network interfaces etc.  While it may sound impossible for a single phone to bring down a large part of a carrier’s network I assure you that it is possible and something the carriers worry quite a lot about.  

    In the end Apple may choose to use an approach similar to Qualcomm’s BREW model for app signing, licensing , and deployment (although via iTunes rather than OTA).  3rd parties would write apps and Apple (and Cingular?) would have discretion over what went on the phone.  This would give them the chance to extensively test and approve for safe service all apps being considered.

    A final unrelated word: As one that as done development on just about every computer platform over the last 25 years Brody’s comment that "Windows is  far superior to MacOS" is simply bunk.  I assume he/she was referring to Mac OS X and I think that the jury has come back on that and developers that have used and developed for Windows and OS X far and away prefer Mac OS X with xCode etc.  Try before you speak from your butt.

  6. Michael Winckler says:

    With a mobile platform and an open system, people might start to develope applications that go beyond the standard stuff that you get on a mobile. But maybe Apple would like to get the big piece of that cake. That, to me, is the sole reason to close the platform for 3rd party developed applications.

    The ways around technical problems have been named by several people in this discussion:

     – construct a solid model to access the lower network level and close this level for programmers

     – introduce a certification model for applications, but let the user decide about the actual installation

     – give us a reset button 😉

    @Brody: "Windows is far superior to MacOS …" Question: Are we talking about the same op-sys here? Now, we could turn yet another blog into stupid Win/Mac/Lin bashing, but a claim like yours needs support or it is just … a claim.

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