Benjamin Bloom - thoughts and analysis of digital strategy, cloud based marketing solutions, and consumer experiences.
Apple's identity (account and Touch ID) stategy comes into focus here in this Chart via BusinessInsider.
The meta-battle is now:
# of exclusive SKUs, Total SKUs, and ease of purchase. Apple might have the digital content piece (apps, movies etc) but Amazon and Paypal have the physical (and second-hand) universe on lockdown.
TouchID certainly is going to help with ease of purchase, and the rest of the battle is: how can we get consumers to buy ____ with Apple.
Much of this post was orginally a comment on "Snubbing the Media — Strategy or Revenge?" at Bulldog reporter. I'm working on a larger post about what a universe run by Apple would look like.
The manufacture of the gadgets that have become part of our lives, and made Apple a hugely profitable company in the meantime, has transformed Apple's operations into a lightning rod for outrage over worker conditions. Listeners to This American Life were let in on the sad story even before the Times article was released.
What was damning about the NYT story was that it went further in context and further in exploring corruption. In context, it was better able to show the matrix of conditions costs and imperatives that are involved with being an apple supplier and a worker at such a supplier. But in corruption, the NYT was able to get former Apple employees to discuss the company's internal perspective on the problem, without being official mouthpieces. Culpability seemed to be at the heart of these admissions. What are we to say about that? Apple ruthlessly prevents outside access to its inner deliberations, and in some ways this culture of secrecy is good business practice, but in others, it allows sensational news items to define the company's story.
So now Apple is using its main currency, (thirst for details about the company), to attempt to control the story and diver the narrative away from the labor issue. It's an authoritarian move, and we shouldn't expect Apple to change that approach overnight any more than it can change Foxconn's practices overnight; in many ways that approach might continue to work.
Apple isn't just freezing out the NYT: it is freezing the citizens of the world and the community of its users from being stakeholders in Apple's governance.
As the goods we purchase transition to digital rather than physical, the tangible devices and experiences we do purchase become increasingly important expressions of their lose their tangibly, the opportunity we have to participate in the industrial decisions surrounding their production is real and a true test of the world's appetite for respecting craftsmanship, effort, sacrifice, and pride. Will it become harder to exploit citizens of other low-wage countries, or easier? That much is up to us.
Nice wrap up on SAI, from a Quora post about how apple uses its massive cash resources:
When new component technologies (touchscreens, chips, LED displays) first come out, they are very expensive to produce, and building a factory that can produce them in mass quantities is even more expensive. Oftentimes, the upfront capital expenditure can be so huge and the margins are small enough (and shrink over time as the component is rapidly commoditized) that the companies who would build these factories cannot raise sufficient investment capital to cover the costs.
...
Apple is not just crushing its rivals through superiority in design, Steve Jobs's deep experience in hardware mass production (early Apple, NeXT) has been brought to bear in creating an unrivaled exclusive supply chain of advanced technology literally years ahead of anyone else on the planet. If it feels like new Apple products appear futuristic, it is because Apple really is sending back technology from the future.
Reminds me of the Clarke's Third Law:
Any sufficiently advanced technology is indistinguishable from magic. -[Wikipedia]
By painting Apple as a new untouchable in the CE industry, has Dave Morgan taken the liberty to show us that the consumer experience trumps just about everything else? After a decade of losing Apple vs. IBM comparisons (in which I, as a boy, defended Apple to the ends of the earth, aided by my weekly infusion of MacWEEK) can Apple have a further decade of dominance? Eerily familiar to descriptions of IBM in the 1960s or 70s.
Apple: The First Trillion-Dollar Company? 01/13/2011:
Apple is out-innovating and out-executing the entire market. No other company is delivering better consumer electronics products with better content and communications experiences to the market, and iterating them constantly, than Apple.? Not only that, but no one else is delivering consumer electronic products and related software and content at the scale, and with the degree of customer service, that Apple is today. Not Sony. Not Samsung. Not LG. Not Google. No one.
The business of video on demand was possible and eminently doable in 1994-95. Most of the cable companies buried their heads in the sand. IBM was content selling servers, having lost the DOS vs. Windows battle (or even OS2/Warp!) Yet we didn't see it for more than a decade in most US Cable households.
Great products and ideas die, all the time. I personally never owned a mac clone, but some of those machines were really insipiring piecves of machinery. Gil Amelio couldn;t save Apple, but Jobs did. He rebooted the company.
And that's why the powerhouse that Apple has become, can't last forever. What IBM has build doesn't rely on one person, ditto to GE, Comcast, Verizon. Apple has a lockup on the fringe, but it can't take the mass. The mass just won't tolerate it.
David Pogue suggests this morning that CES was a sideshow of Apple copycats. His money quote from an industry insider:
“These companies are like 6-year-olds on a soccer team,” one company representative told me. “The ball goes over here, and they all run after it in a blob. ‘Tablet!’ ‘Tablet!’ ‘Tablet!’ ”
The innovation, however, is moving to the cloud- the services on top of the devices. That will keep shiny, new things on our TVs for now. See InsideFacebook's The Best Facebook-Integrated Devices from CES 2011.
But it can't last longer than Steve Jobs. Even as Steve keeps the fanboys cheering (and even some day clicking the "like" button) he hasn't build anything that can outlive him.
Well, maybe, just maybe, it's fixing the news business! (via Fake Steve Jobs)
The news business has descended into the gutter in a pathetic attempt to stay alive. It’s been a horrible race to the bottom. This is turn has polluted our politics, and now we’re seeing the result of it.
Fortunately for the world, we’re going to change all that, with iPad and the apps model. But that’s a story for another day.
Over at SAI, the chart of the day suggests that ChromeOS is a jab at Windwows (duh) and that Google needs the OS to succeed because it is the best hope to kill a weaker Microsoft. Despite Microsoft's attempts to break out of the doldrums, and the extreme diversification of their product offerings (many of which never stood a chance of working)- Windows remains the cash cow for the giant.
If I were Google, I wouldn't try to win the war against Windows under current conditions; I would need more things to fall into place.
Android users are wising up to the Google Platform, and applications for Android are proliferating. Windows Phone 7, how are you feeling?
Bing is getting better, has differentiated itself and is integrating with Facebook more obviously (the future of social search is very scary for any company that does not follow Bing's lead)- that's got to be scary for Google.
ChromeOS apps would all be web apps, and the value proposition would have to involve the cloud, and applications that are enhanced by always on-data networks. WiFi in the current sense just will not cut it. You know what would? 3G/4G wireless connectivity built in.
ChromeOS laptops might be a miserable failure like the Nexus one, but if Google sold them at a loss, they'd exact a far more painful loss on Microsoft. With onerous license fees from the essential connectivity, Google has to own the key patents in order to reduce its costs. This illuminates why Google may be fighting so hard against Apple and RIM for Nortel's 3G/4G patents.
When yo sign into Google Apps, use email, docs, spreadsheets, watch Youtube videos in the Chrome browser, and android apps all day, getting served advertising by Doubleclick until you remotely program your Google TV from your android phone and watch The Office when it's convenient for you...that's when Microsoft dies. And with the exception of GoogleTV, I haven't named one thing above that sucks.
To do the same thing on Windows/microsoft/Bing/MSN/Xbox, you're making some compromises along the way, for sure. It's not a done deal, but it's for all the marbles.
Reading The dirty little secret about Google Android, I've been enjoying the insightful analysis of how Apple's decision to free the device from the restrictions of the carrier were key to the identity of the device, and seem more in keeping with what Google originally promised with the Nexus One.
Unfortunately, the Nexus One flopped. The non-Apple customers buy their wireless devices and service very differently. Mass-market phones, even smart phones, need marketing spend behind them, and those campaigns are linked to carrier restrictions and modifications which compromise the "open" vision. The upshot, according to the article:
the consequence of not putting any walls around your product is that both the good guys and the bad guys can do anything they want with it. And for Android, that means that it’s being manipulated, modified, and maimed by companies that care more about preserving their old business models than empowering people with the next great wave of computing devices.
I think this rolls back into the S-Curve of technology adoption.
[credit: Wikipedia]
As the market matures and a it becomes a mass market product, smart phones and apps become both more standardized and more understandable for the average community. We see and hear idiotic advertisements exhorting us to be "twin texting turbos" with the Droid 2. And this is great for Verizon's bottom line, for marketers and developers launching Android apps, and for mobile web content growth. But it basically sucks for the innovators who want to be able to get a great device and move from carrier to carrier in the US market.
Other perspectives: Nic Brisbourne of DFJEsprit writes
[T]he longevity of the app paradigm versus open web standards will depend in large measure on who wins the hardware battle. Open standards at the software level probably will probably only prevail if hardware manufacturers with a PC mindset prevail over those with a preference for closed ecosystems...
Unfortunately, the principles of openness have been interpreted to mean an open app ecosystem, and haven't changed the economics of the closed carrier/device model in the US. Google wants a big market for Android apps and as many users as possible, and that motivation is at cross-purposes with the open-ness that geeks want.
“If you boat a lot, you're known as a boating enthusiast. I like to boat, but I just don't want to ever be referred to as a 'boating enthusiast'. I hope they call me 'a guy who likes to boat'.”- Mitch Hedberg
I read that Microsoft's new KIN Windows 7 phones, are "aimed at 15- to 30-year-olds who are social-networking enthusiasts." Ew. Never mind targeting teen interests in Glee, Justin Beiber, WWE, college, funny videos, or body spray - who describes a product this way even in a press junket? Presumably they left the research out, or they'd have realized that 31% of their target demographic already plans to buy an iPhone.
It's shocking, really. After so many years of getting it wrong you'd think someone could just do the opposite of all that and make a serious score! Microsoft has been making mobile products longer than Apple has been making the iMac- it just so happens that few of Microsoft's products were very good. When aQuantive was bought by Microsoft in 2007, my Razorfish colleagues and I collectively worried that we'd lose our Blackberry devices in favor of Windows Mobile "smartphones." The worry was well-deserved; those who received them were usually miserable.
Microsoft proved unable to create the kind of extensible platform on its mobile devices that has made Windows dominant in the corporation and in the home. While Windows may be too entrenched to be dislodged from either, it's stunning what Steve Jobs has been able to do in his return to Apple.
And now, with the prominence of the iPod/iPhone/iPad as a platform, Apple's role as a "gatekeeper" to the platform is drawing a wave of anti-Jobs sentiment, centered around the perception that Apple is a draconian gatekeeper of its own platform.
Maybe so. Is that so bad? Isn't it better than the sludge that Windows Mobile is? (I have not tried out Windows 7 Mobile so I reserve judgement for now). I believe that the power Steve Jobs wields most effectively is the power of No. And what Microsoft, by trying to pack everything into every product it ships, has always been shackled to Yes, And... (well, their version of Yes, anyway).
No, that is too hard to use
No, that looks like crap
No, that feature sucks
No, that app doesn't belong in the app store
No, we don't talk to the press
No, I don't answer emails (actually I think Steve Jobs responding to email of late is like the ultimate blog/twitter account)
After all that NO, it's clear that the most important thing to Apple is to make awesome products that people love. It's not ego, or even greed (except by association- great products cost $$$). But Apple has transformed itself from a manufacturer of niche PCs that a few people love, to a mass-market CE company that makes products for millions more. The masses expect Apple to stand behind every product decision and to contuniue to uphold exacting quality and usability standards.
Is that democratic? Surely not- Steve Jobs is an admired autocrat. He's a sort of a benign autocrat, which isn't all that bad (see also the original Thirteen Colonies and "Salutary Neglect") Strong, determined leaders in the autocratic model don't much care for input from you, or me, or anyone else. If they stopped to ask what we wanted, we might choose the wrong thing.
As in the 1700s, this was all more or less OK until the colonists got wind of the the autocrat's real priorities- the intolerable acts were ones that benefited the sovereign else at the expense of the colonists. Enter the rebellion.
Are we net beneficiaries of Steve Jobs' power of No or are we on the brink of Apple's decisions benefitting the company more than the base of users, developers, and accessory manufacturers?
Apple's power comes from protecting the user experience. Whether you see that experience as stifled by an evil dictator or shaped by divine will is really about YOU not about Apple. With the user at the center, the design decisions of an otherwise evil monarch are altruistic. Right vs. left, republican vs. democrat- this is an interpretive exercise rather than a factual one.
Apple is facing an onslaught of ad-driven solutions, particularly if it releases always-on wifi and allows multiple apps to run simultaneously. A successful ad model could be important to keeping developers afloat. But the key to that monetization of the audience is the data about the audience, and strategically Apple needs this piece- to be the sole provider of such data and kill AdMob.
So Apple 's development process might be reduced to:
No matter how many applications Steve Jobs or his employees arbitrarily deny from the app store, if people just love the damn thing, they'll think he's Jesus.
