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Apple: Repeating the Mistakes of the Past

Here we go again, right back where we've always been. In the 1980s the Apple Mac OS was the best operating system on the planet, and {complink 379|Apple Inc.} was heading toward a dominant share in the personal computer market. Microsoft's MS-DOS had a text interface with arcane commands rather than an easy-to-use graphical interface. The IBM PC was just getting off the ground.

But, a funny thing happened on the way to market dominance. Apple decided to keep the MAC OS and the MAC architecture proprietary. For some inexplicable reason IBM, historically a company that kept everything to itself, decided to make MS-DOS and the PC architecture open systems. A series of clone manufacturers emerged; and, as the Microsoft operating system evolved, it became overwhelmingly more popular with developers. Easy to see why: The potential market was much bigger.

Today, Apple has a dominant share in the smartphone market. Apple has also created the tablet PC market and dominates it. The Apple iOS (born as the iPhone OS) is the best smartphone operating system on the planet. It has been ported to the iPad, and it is the interface with the Apple App Store for both the iPod and iPad. The App Store has far more apps available than any other site. The iPod, the iPad, iOS, and the App Store are all proprietary.

Can't anyone see this train wreck coming? For now, the Apple App Store is the most popular smartphone app site, and iOS is by far the most profitable platform for developers. But Android is winning the battle of smartphone market share. There's every indication that far more Android phones than iPhones will be sold as time progresses.

For now, app developers are frustrated, because they have to develop code for a wide variety of smartphones that use Android. But, we've been here before. Eventually, cellphone manufacturers will coalesce around a standard; and the market for apps written for that standard will be much, much bigger than Apple’s iPhone/iOS market. A similar situation exists for tablet PCs.

Apple CEO Steve Jobs is a marketing genius, no argument. He has created at least four major markets: easy-to-use personal computers, MP3 players, downloadable music, and smartphones with display-based interfaces. He's working on a fifth, tablet PCs. But, there's a blind spot. Unless the iPhone, the iPad, and iOS are opened up, they're going to be doomed to minor market shares. Then Apple is going to have to invent the next big thing — all over again.

24 comments on “Apple: Repeating the Mistakes of the Past

  1. AnalyzeThis
    May 20, 2011

    Morry, I generally agree with you and I certainly think the comparison to the 1980's situation is very valid: there are many similarities.

    You're completely right that Android will almost certainly dominate — at least in the smartphone space, the situation is different in the tablet market — in time. Already, I believe Android has around 35% of the market, so 40% and even slightly more than 50% is not an unrealistic goal.

    But Morry, what are your thoughts regarding Google's recent decisions regarding making Android more proprietary? What happens if Google decides to make Android more like iOS? Won't this kind of be shooting themselves in the foot? I mean, I understand why they're doing this because fragmentation is indeed a problem, but still…

    The Android situation is slightly different than the DOS situation, obviously: Microsoft did not have the level of control over DOS that Google has over Android, and if you didn't like MS-DOS for whatever reason there were alternatives such as PC-DOS.

    Anyhow, any thoughts on how Google's move towards closed-source could affect all this?

  2. SunitaT
    May 20, 2011

    Morry,

     I totally agree with you that Apple is repeating the mistakes. Android which is open source has lot of advantages over iOS. Since Android is open source, it allows for easy customization and adaptation, and the ease of developing Android apps helps populate the ecosystem with content.  Moreover Android apps are also cheaper to deploy compared to those written for iOS.

  3. Taimoor Zubar
    May 20, 2011

    I think if Apple decides to go 'open', Apple won't remain Apple anymore. What makes Apple successful amongst the others is the fact that the Apple device is a powerful tool in it's complete form. This means that what creates the 'Apple experience' is performance of hardware and software together. While it's debatable that whether the performance of iOS can be as good on other platforms, from a marketing and brand-image perspective, Apple wouldn't want to be like the others and start selling out the OS independently.

  4. Nemos
    May 20, 2011

    I have exactly the same thoughts  Apple likes the monopoly and tries to build an Empire around its best products such as ipad and iphone.

    It is grounded that Apple will repeat the mistakes of the past. The first time I saw the Android platform, I guessed  that will be the next platform which will dominate to the mobile O.S market.

  5. Clairvoyant
    May 20, 2011

    I agree, TaimoorZ. Apple has their own unique image, which many companies have tried to copy at times. Experience with using Apple products is different than other manufacturers. I think Apple needs to keep this trend to stay successful going forward.

  6. t.alex
    May 21, 2011

    Android devices will sure outgrow Apple devices. The reason is it is cheaper and good enough to use. Apple fans still love their products of course. Nevetheless, i am interested to see what will happen in 2 years time.

  7. DataCrunch
    May 21, 2011

    Morry, I have sensed the same feelings for quite some time about history repeating itself for Apple.  So far Apple is still the setting the standard, but others are playing catch up and fast.  At this point, I see no indication of Apple becoming more open.

  8. itguyphil
    May 21, 2011

    You are right but remember that quantity does not always equal quality.

    Apple may be locked into the hardware they operate on and the carriers that can utilize their devices BUT their users love them.

  9. Parser
    May 21, 2011

    There is a huge difference on the source of income. While IBM made architecture and software an open platform and that platform is sold everywhere it is not and has not been a sole income for IBM.

    Apple tried to allow others to manufacture Mac computers in 1990. The effect was cutting its own profits, because this all what Apple does. No other income.

    Apple is unable to make their products as an open architecture. Their market is too narrow for them to risk competition.  

    Google is offering Android as a complete OS and it is not an open architecture. However now Android is being expended to control home appliances using cheap specially designed low-cost wireless network.

    The two companies are quite different in business strategy and source of income. It is not a monopoly by choice. Apple may have to stay innovative to survive. 

  10. SP
    May 21, 2011

    Well Apple definitely likes monopoly but then they are giving what user wants. And with the way people are using Apple products it looks like that they love using it.

  11. Nemos
    May 21, 2011

    “It is not a monopoly by choice. Apple may have to stay innovative to survive.”

    What will go wrong for Apple if adapt also the Android platform for its products?

    Why insists to use Mac os. Is this a way to be innovative?

  12. Parser
    May 21, 2011

    @Nemos,

    They are not a jellybean company to compete with everyone. They are the leaders. And as we know leaders fall, but it is the higher cause they are fighting for.  It is like being a USA citizen and die for homeland. They will go out of business rather than engage in peer to peer competition leaving the leadership to others. 

    I was a fan of Apple when they were going out business a few decades ago. Their design was superior and no-one recognized it (not on profitable scale). Now they combined leadership with profit.

  13. Himanshugupta
    May 22, 2011

    @Parser, i agree that Apple is completly different from others and what they do is a standard in itself. This is the company which has a solid fan base and no matter what they will try to keep that base. But this is the right time for Apple to do something different as history does not repeat itself. Apple should try to embrace other companies and make partnership, make their products more affordable and reasonably priced by sharing the burden of innovation.

  14. Ms. Daisy
    May 22, 2011

    Morry:

    I think Apple has a smart team of executives who would have thought over the historical past and the opportunities in the future, as well as the risks of opening its platform to every smartphone manufacturer. I seem to agree with their closing the platform and maintining the quality of their products to the level it has always performed.

    Apple is probably making up for the posibility of repeating the past by buying its suppliers/competititors and re-structuring these new acqusitions to Apple's standards. The Apple quality that has its base and new comers drawn to it is what Apple is protecting and it is important they protect this asset since innovation is Apple's main area of expertise.

    Trailblazing comes with small market shares so that the company has more time devoted to R&D of new technologies and products.

  15. Michell Prunty
    May 23, 2011

    Morry,

    I’d like to compare this to another market: The PC / console market.  

    A few years ago developers left the PC gaming market en masse for the console market.  Why?  Because it is easier to develop for one set of hardware – i.e., the Xbox, PS, or Nintendo.  These are closed sourced systems yet if you go to your local gaming shop, you’ll find a smaller and smaller market place for PC games every year.  Its harder to develop for the PC market because every configuration is different, leading to bloat – a cause for long development times and higher costs.  

    “The iOS is by far the most profitable platform”  –  Like the console market, the iOS is a single hardware system, which is identical to the PS, Xbox, Nintendo systems.  The Android is like the PC system.  

    For the gaming market at least, it seems developers prefer a closed system.  Does that translate to the smart phone market?  

    A possible turning point for Android?  A single, hugely popular piece of software that only runs on the Android.  Like World of Warcraft did for the PC – 12million players strong and now one of the only reasons PC gaming still survives.  

    “Eventually, cell phone manufacturers will coalesce around a standard” – that’s the main problem, until there is a standard then Android will be second tier compared to Apple.  And what is the likelihood that multiple hardware providers will be willing to standardize?  

    One of the main differences between now and then, is the proliferation of the internet – want to find out how to develop for Apple?  It’s a Google click away.  🙂

  16. Susan Fourtané
    May 23, 2011

    Morry, 

    Good post. 

    As history shows Apple is the one always coming up with the innovation and the rest just copy. For this I would say that yes, we can expect the next big thing coming from the Apple's oven, too. 

    -Susan 

  17. sdb999
    May 23, 2011

    One thing no one is talking about is the stability of iOS vs Android.  With Apple keeping the OS proprietary, they are ensuring the stability of the product.  That is a BIG plus with consumers these days.  Consumers don't want their products to crash.  I own an Android phone and an Ipod Touch.  My phone needs restarted twice a day because it is locked up.  My Ipod never has any problems.

    The other thing to consider with Apple is the applications available are virus free.  Wait for the first virus on Android because it is open source and see what happens to Android markt share.

  18. elctrnx_lyf
    May 23, 2011

    Android will certainly grow into much bigger and bigger markets. As Android phones become more popular the OS will become a standardized like Windows OS in PC market. So probably Apple has to innovate some thing better by then, they belive in lower customers, higher prices and higher margins.

  19. Tim Votapka
    May 25, 2011

    I agree. Apple's ability to invent markets is uncanny. In most cases, a product development team would determine what's needed or wanted before it got too far into a product's life cycle. Apple tends to predict what its audience will want, build the product and then create the demand.

  20. mario8a
    May 25, 2011

    Hi

    From my point of view, times change, people change, Apple has 20 years more of maturity, so Steve Jobs, I highly doubt they will make same mistakes.

     

    Regards

  21. Susan Fourtané
    May 26, 2011

    Tvotapka, 

    More than prediction I would say Apple has a very good market research team. 

    -Susan

  22. Tim Votapka
    May 26, 2011

    I'd tend to think you're right, though I'm not on the inside there. Going by what I see, I can't deny that every generation or version of an Apple device seems to answer specific issues customers verbalize one way or another.

  23. Susan Fourtané
    May 27, 2011

    Tvotapka, 

    And isn't that all what market research is about? They first find out what the customers would like to change/add/have in a product, they manufacture and deliver. Apple seems to do this very well. 

    -Susan

  24. Tim Votapka
    May 27, 2011

    Totally!! Yes. In fact we apply a series of condition formulas to the businesses we work with (works for individuals too btw). And when you have a brand new idea, project or effort underway, and surveying is a vital step. In fact the entire formula goes like this:

    1. Find a communication line

    2. Make yourself known.

    3. Discover what is needed or wanted.

    4. Do, produce and/or present it.

    It's simple, but you'd be amazed at how many bypass this step.

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