Friday, May 21, 2010

Google is the new Microsoft, Apple... is still Apple

In the past couple of days, Google I/O 2010 marked the beginning of a new all-out War of the Platforms. The announcements of Android 2.2, GoogleTV, the new VP8 format (albeit poor and patent-risky as it might be) and the new Chrome Web Store have put Google on the offensive, clearly assuming their do-no-evil antagonism with Job's already vilified, and increasingly closed, Apple.

In a long gone era, Microsoft was taking the lead on the PC market by opening up the platform and forging agreements with large manufacturers in order to gain relevance in a market dominated by one large, slow, hardware-heavy incumbent (IBM). One falshy player, with some hot new superior (if not technologically, at least usability-wise) products: Apple.

During the 80's, Apple was gaining some amazing market share due to their superior, more cohesive offering. But when software-centric Microsoft noticed they could play a large part in their manufacturer's value chain and focused on creating a large, open-for-all ecosystem, Jobs refused to do the same with the Macintosh, and we all know how well that went then. Steve moved off to form NeXT, and Microsoft to take on the Windows world.

In 2001, after Jobs' return and the company's return to profitability, Apple introduced the iPod, and in the years after, a whole set of mobile devices that ended up in the iPhone and now the iPad. Apple has the lead, again, forging a string foothold on an emerging, hot market, just like the PC once was.

And now, a web-centric Google, already gaining relevance in a market dominated by one large, slow, software-heavy incumbent (Microsoft) and trying to make leeway into the same emerging hot market that Apple commercially pioneered, started yesterday to seriously show that opening up the platform and forging agreements with large manufacturers in order to play a large part in their value chain and on creating a large open-for-all ecosystem is their play too, just like Microsoft was. And yesterday they were not fearful of Apple's position, they were making fun of it.

Why? Because history can - and will, unless Steve pulls a crazy-ivan on Apple in the coming years - repeat itself. Instead of opening up, Jobs started closing down: only allowing developers of their mobile platforms to use Apple's own tools to develop applications and games, discretionarily deciding which applications get approved onto their App Store, and fencing their ecosystem under a strictly guarded wall.

Wonderful, hugely valuable technologies such as Unity3D (which we used to make games and that you can find at or even our never-published iPhone Java SDK Jaiphon (which got a cease-and-desist letter) are being explicitly denied entry onto the Apple garden, under the arguments that they pollute and undermine developer usage of Apple's technology advances. Guess where the Unity3D guys went preaching to the choir: to the Google I/O crowd, where they showcased on the 18th Lego Start Wars running on NativeClient.

Google announced that their Android ecosystem is selling more phones than Apple is. It would only be a matter of time: many manufacturers are jumping on the 'droid's boat, and their sheer numbers are weighting in. Even if I don't like Android's interface (I find it way too geeky - and I'm a geek), the open(er) ecosystem that supports it is doomed to win.

Don't get me wrong: I'm typing this on a recently purchased MacBook Pro, I use an iPhone - heck, we develop for iPhone. But Apple is becoming, for me, a recently all-too-common "love the products, hate the attitude" kind of thing, and only saying that spells bad karma for any company: their customers are tolerating something they don't like to get something they like just a little bit more.

Google is now the new Microsoft: it is the elephant of the web arena, and it's creating large open ecosystems for phones, tablets and TV's - just like Microsoft did for the PC. We all know how that will end. And Apple? Well, Apple is doing their thing: building a great walled garden where the grass is still greener, but only until supplies run out - just like they did with the original Mac. And we all know how that will end as well.

With Steve getting older and wanting to benefit from that second chance at life he got after the pancreatic cancer, I'm afraid that unless Apple does something real fast, this time there will be no next NeXT to save them, and Apple may just be loosing their second change at greatness.




António Mota said...

O que e que queres dizer com "Android's interface"? User interface ou API? E' que user interfaces ha muitas, HTC, Motorola, Samsung e Sony Ericsson pelo menos criaram as sua proprias UI's...

Hugo José Pinto said...

Ois. Tens razao - a minha experiencia de UI's é sobretudo baseada nos HTC... vou clarificar no artigo.

António Mota said...

Bom, claro que podes nao gostar de nenhuma delas... :)

Anonymous said...


cool article and I liked most of it, but you have parts of your history wrong. In the 80's, Mac lost because it was poorly mis-managed by inferior CEOs. Even with less than 10% of the market share, Apple was a profitable company around 2003.

The growth to $200Bn is of course based on iPod, iPhone and iPad, but the market share of Apple is not an indication of success.

My best indicator for Apple success is the profit margin that they have on each device they sell. Compared to industry peers, it is **huge**. Last quarter it was above 35%...

As for "open" vs "closed", the open is clearly superior in my view, but I'm still waiting for the market to respond to that. For now, they seem perfectly happy to buy the closed, "curated", experience that Apple is selling.

So no matter how many jokes Google makes in their presentations, remember this: Google has 1 successful profitable business - ads; Apple has 3: Macs, IPhone+iPad's, and Media retailer. On all of those Apple is either number one in sales (US, don't know in the rest of the world), or (in the Macs) number 1 in the most expensive categories.

I wouldn't be worried.

Hugo José Pinto said...

Hi Pedro,

You're right regarding profitability being the best indicator of a company's health.

Nonetheless, Apple must stay relevant to keep up that huge growth - and I believe being the niche player it once was with high-end PC's will make it hard to influence an increasingly silo-ed marketplace.

Fingers crossed.

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