For Apple, It's the Simplicity Stupid

Rich Tehrani : Communications and Technology Blog -
Rich Tehrani
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For Apple, It's the Simplicity Stupid

How Apple's dead simple interfaces and walled-garden approach are wreaking havoc on the competitive world of technology and entertainment

If you have any interest in the future of computing read this post from Charlie's Diary which explains why he thinks Apple is blocking Flash from many of its newer devices. In a nutshell, Flash allows cross-platform development and Apple of course doesn't want to see this being done. There are other cross platform tools available for the iPhone at but let's not go there at this moment.

Another interesting point in the article is a mention of HP buying Palm to compete with Apple via webOS. This is 100% correct. The world has changed. I wrote a while back about how Apple is destroying open computing with its walled-garden approach. Now that I have an iPad I continue to assert this is the case.

But it gets worse for the competition because Apple has the same secret weapon in devices that Sony has in cameras. The proprietary memory stick is what allowed Sony to make more money per camera than the competition. If they chose to they could either lower prices or add more innovation into the camera and sell more than the next guy. Memory Stick technology really didn't keep up with other devices which means this advantage is not so great for Sony today.

But for Apple, they have a very good idea what each iPad/iPhone customer is worth over the life of the product due to App Store revenue. All this and iTunes revenue to boot. So now Apple can charge less for a device today because of the revenue it will make tomorrow. Moreover Apple knows as it sells even more devices the developers will come calling in larger numbers which of course means more revenue per user.

Another concept in the above-mentioned post has to do with the PC era being at an end. I am not sure I agree with this idea but what I do believe is Apple's products continue to kick the rear out of all others and the company has a head start which is unbelievably scary for those who hope to keep computing ecosystems open.

Apple took a phone and made it bigger and now it is eating into the general netbook market. They could tweak it again and turn into a laptop killer. Tweak it once more and it is a desktop killer. Each time they do this they keep the ecosystem closed... Shut... No entry unless you are a massive computer company based in Cupertino. Or of course unless they say you are approved.

Face it... When it comes to computing devices, HP is screwed. Dell as well. Sony may not stand a chance.

These new Apple devices have the most simple user interfaces and even leave important things like multitasking and Flash out. Still people can't stop buying them.

For years, the tech industry survived by out-featuring each other. If your product has 100 features, mine had to have 120, etc. This is obviously not the same methodology Apple is employing. They are simplifying and the market is drooling.

In the VoIP space there have been thousands of software failures. One of the biggest successes came from Skype because the company used simplicity and a fun and light interface where others used arcane user name addresses and passed along unnecessary complexity.

When will other vendors learn? At this rate it may be too late. I understand that many people hope Google will be the counterbalance but Android to me is a poor copy of the iPhone OS. We are entering a world of computing simplicity where the number of partners the walled garden ecosystem is commensurate with success. Few people saw this coming but now that this new world order has been revealed, how will computing respond from the competitive threat Apple is now wielding on numerous industries?

Here is an excerpt from the above-mentioned story:

I've got a theory, and it's this: Steve Jobs believes he's gambling Apple's future -- the future of a corporation with a market cap well over US $200Bn -- on an all-or-nothing push into a new market. HP have woken up and smelled the forest fire, two or three years late; Microsoft are mired in a tar pit, unable to grasp that the inferno heading towards them is going to burn down the entire ecosystem in which they exist. There is the smell of panic in the air, and here's why ...

We have known since the mid-1990s that the internet was the future of computing. With increasing bandwidth, data doesn't need to be trapped in the hard drives of our desktop computers: data and interaction can follow us out into the world we live in. Modem uptake drove dot-com 1.0; broadband uptake drove dot-com 2.0. Now everyone is anticipating what you might call dot-com 3.0, driven by a combination of 4G mobile telephony (LTE or WiMax, depending on which horse you back) and wifi everywhere. Wifi and 4G protocols will shortly be delivering 50-150mbps to whatever gizmo is in your pocket, over the air. (3G is already good for 6mbps, which is where broadband was around the turn of the millennium. And there are ISPs in Tokyo who are already selling home broadband delivered via WiMax. It's about as fast as my cable modem connection was in 2005.)

A lot has been said about how expensive it is to boost the speed of fibre networks. The USA has some of the worst domestic broadband in the developed world, because it's delivered over cables that were installed early -- premature infrastructure may give your economy a leg up in the early years, but handicaps you down the line -- but a shift to high-bandwidth wireless will make up the gap, assuming the frequencies are available (see also: shutting down analog TV and radio to make room). It's easier to lay a single fat fibre to a radio transciever station than it is to lay lots of thin fibres to everybody's front door, after all.

Anyway, here's Steve Jobs' strategic dilemma in a nutshell: the PC industry as we have known it for a third of a century is beginning to die.

PCs are becoming commodity items. The price of PCs and laptops is falling by about 50% per decade in real terms, despite performance simultaneously rising in real terms. The profit margin on a typical netbook or desktop PC is under 10%. Apple has so far survived this collapse in profitability by aiming at the premium end of the market -- if they were an auto manufacturer, they'd be Mercedes, BMW, Porsche and Jaguar rolled into one. But nevertheless, the underlying prices are dropping. Moreover, the PC revolution has saturated the market at any accessible price point. That is, anyone who needs and can afford a PC has now got one. Elsewhere, in the developing world, the market is still growing -- but it's at the bottom end of the price pyramid, with margins squeezed down to nothing.

At the same time, wireless broadband is coming. As it does so, organizations and users will increasingly move their data out into the cloud (read: onto hordes of servers racked up high in anonymous data warehouses, owned and maintained by some large corporation like Google). Software will be delivered as a service to users wherever they are, via whatever device they're looking at -- their phone, laptop, tablet, the TV, a direct brain implant, whatever. (Why is this? Well, it's what everyone believes -- everyone in the industry, anyway. Because it offers a way to continue to make money, by selling software as a service, despite the cost of the hardware exponentially dropping towards zero. And, oh, it lets you outsource a lot of annoying shitty admin tasks like disk management, backup, anti-virus, and so on).

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