Apple’s Tim Cook Demanded Competitor Innovation: He Got it

| Particle Debris

On July 19, 2011, Apple CEO Tim Cook, during the Q3 Earnings Report, said that he loves competition, but "we want people to invent their own stuff." It appears that his wish was granted.

Preamble

One of my favorite observations about technology is reaffirmed over and over again: all great things come from the inspired genius of one man. In other words, committees are seldom able to develop new ideas and products because the clutter of competing visions seldom beats the clarity of individual genius.

In the context of Apple, Scott Forstall, from what's been published about him, may have thought that he was carrying on that very same legacy of the idiosyncratic genius of Steve Jobs and, as a result, ruled iOS with an iron hand.

Meanwhile, Apple was about the business of going "thermonuclear" with a patent war against Samsung and (indirectly) Google. I will affirm that before the iPhone came out, smartphones were awful. It was perhaps a driving factor in the development of the iPhone. Below is a chart that Apple has shown depicting how Samsung phones changed after the arrival of the iPhone.

While I am totally sympathetic to Apple as the visionary for the modern touch screen smartphone and respect its rights and patents, I also will admit that it's very hard to seize and maintain control of a compelling new product category that has universal appeal. Very hard.

Apple shows how smartphones came to copy its original vision.

If that were consistently doable in American enterprise, there would only be one car company, one company making TV sets, and only one company making personal computers. So when an incredibly popular idea comes along, like the modern touch screen tablet, one can expect that there will be variations on the original theme. Everyone jumps in, lawsuits happen, but business continues.

I think something remarkable happened while Apple's Mr. Forstall was being very single minded about iOS and Apple's attorneys were suing all the competitors.

Samsung and Google attorneys, managers and very smart engineers all got together.  They were spurred by the specter of Apple's litigation and a seeming stagnation in the development of iOS. iOS went from being a great OS for a small 3.5-inch display iPhone to being used on a 9.7-inch tablet, a device many people hope can replace their PCs and Macs.

The problem was that Apple was single minded on keeping not just a single OS for both but a single UI and UX, so while, for example, a single window/single foreground app makes perfect sense on an iPhone, the metaphor is strained to the limit on a full sized iPad. This stagnation was addressed by a David Sobotta in, "Risk Averse: Will iOS Become Apple's Windows XP?" And no doubt, larger iPads are coming, and that will completely break down the metaphor for smart people who, themselves, want to step up their productivity game on tablets.

The customer thirst and competition's appreciation for larger screens and the innovation I've seen with Android 4.x is an evolving phenomenon that Apple has been slow to address. That's probably, we all think, why Tim Cook fired Scott Forstall. Mr. Cook saw that in the fast paced world of innovation and technology from the competition, Apple needed all hands on deck to counter the competitive threats.

Great minds can launch great new things on their own, but over time, when an army of smart people gang up on you, it requires a lot of teamwork, with patent attorney assistance, to maintain a high level of competition in this fast moving technology era. For example, Google is likely deliver a viable Google Glass commercial product later this year. Apple is racing to meet the challenge with its own vision. Can Samsung be far behind?

Tim Cook probably got more of "people inventing their own stuff" than he originally bargained for. As a result, nowadays, observers are expecting Apple, in response, to seriously up its game to a new level. In a frenetic society of A.D.D., blog hits for dollars. social media and instant gratification, the wait is killing us.

Tech News Debris

There was an interesting duo of articles this week on Apple's tablet market share. First, Matt Asay at ReadWrite pondered whether, as Apple's tablet market share drops, profit share must also drop. "As iPad's Market Share Falls, Must Profits Follow?" Incremental improvements to the iPad won't stem that tide. As a result, according to Mr. Asay, Apple needs to be innovative and come out the revolutionary, not evolutionary, products every few years. Even so, despite some wavering, Mr. Asay recognized Apple's business fundamentals, so the article title needs to be taken in the right context.

Later in the week, a crisper analysis was provided by a writer I admire, John Kirk. At Tech.pinions, Mr. Kirk looked more deeply at the thesis that as market share falls, profits must also fall. "Does The Rise Of Android’s Market Share Mean The End of Apple’s Profits?"

Mr. Kirk noted that "The problem with our obsession with market share is that it rests on two faulty foundations. First, it assumes that every product sold within a category is always just as valuable as another. Second, it assumes that every customer who buys a product is of equal value. These two premises are laughably wrong." What it boils down to is having the right market share that not only has desirable customers but also customers that developers appreciate and can profit from. It's a great article, and I've never seen Mr. Kirk miss the mark.

Why are ISPs invoking data caps? Is it because of network congestion? Are ISPs, like Comcast, who own content creation companies, trying to block competition? Or are they seizing the opportunity to make some extra money to finance their network? It may be a little bit off all these things as various organizations, each with its own economic axe to grind, are pointing fingers at each other. Here's some background on all the parties and what their arguments are: "Battle Over Data Caps Heats Up." Of course, it all started when the U.S. federal government decided that it's okay for ISPs to also own and sell major content -- in competition with other companies that depend on that national infrastructure to deliver their own content.

If you're arrested for, say, a traffic offense, can the police officer search your iPhone? It might depend on whether your iPhone is password protected. This article at ars technica starts by looking at cases in Canada, but ends by looking at the situation in the U.S. "Cops can search mobile phones—only if they’re not password-protected." It might influence whether you routinely password protect your iPhone when out for simple errands in your car.

I have been writing about smart glasses lately, and specifically, Google Glass. Joshua Topolsky got up close and personal with a pair recently and wrote up a terrific article on his experiences with the device. This is must reading. "I used Google Glass: the future, with monthly updates."

Image Credit: The Verge

Even more to the point is how smart glasses and iWatches will interact with human beings for good or evil. For example, at one time, all analog cell phones did was allow us to make a phone call. We paid for simple voice connectivity. Today, a modern smart phone is a target on the Internet for criminals, and our personal behavior is monitored by both the manufacturer and the carrier. Is it likely that smart glasses and wearable devices will turn the tide? Or will they continue down the path of doing us more harm than good? Brian Hall looks at these technologies in terms of advertising and intrusion: "Apple iWatch vs Google Glasses and the Next UI Battle."

Is Java doomed on the desktop? Are the security issues just too big to deal with in a modern threat environment? Does Oracle need to change its ways? Do you have Java installed on your Mac, and, if so, why? This and more is discussed in "After so many hacks, why won't Java just go away?"

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Comments

skipaq

Competitors who innovate are good for everyone including Apple. Today’s smartphone market is better than it would have been if Apple remained the only game in town. This competition has brought better choices for iOS users and Android users.

John Martellaro

Along the lines of larger displays, I’m still not convinced that 5.5-inch Phablets are a mass market opportunity or even an enduring product, but here are some interesting thoughts from Ben Bajarin, especially in terms of competitiveness and innovation.

http://techpinions.com/the-galaxy-note-2-one-giant-step-for-android-phones/14292

The advantage competitors have is that they are willing to keep probing for holes in Apple’s product line until they find a winner.

AdamChew

The word innovation is loosely used most of the time including your good self.

I don’t see the innovation you saw in your take on the kindle fire.

Correct me if I am wrong as nowadays new features are passed on as innovations but to me innovation is creating something that is totally new and not something old but make new.

And I don’t mean to pour cold water over others effort in their push to advance technology.

wab95

John:

I want to take a step back, way back, and say something that, I believe, needs to be repeated for perspective’s sake, at least to my thinking.

Much of this angst about Apple’s future, their innovation and market share, is based on a faulty premise. It is based on the observation that, at their height, Microsoft dominated the PC industry with monopolistic market and profit share. This was an anticompetitive aberration that was deliberately and wilfully constructed through a ruthless but brilliant marketing strategy on MS’s part that exploited two things: 1) non-existent and inadequately applied extant laws and regulations governing the tech industry and its innovations; 2) tech naïveté on the part of consumers, who, buffeted by the fast-paced, indeed effervescent, rise and and fall of computer companies (Commodore, Acorn, Texas Instruments) took refuge under the shadow of enterprise’s guidance on platform of choice and the way forward. It was the birth of the computer tech industry as we know it today, and it was a unique moment in time.

Along the way, things changed. The technology advanced, Apple came back, albeit as an iconoclastic alternative to the dominant Windows platform, and we moved from the PC to the post-PC era, none of which was the most important change. The most important change was us. We, the consumers, went from being the tech naïve savages, reminiscent of those ape-men gathered round the monolith in Arthur Clarke’s ‘2001: A Space Odyssey’, to seasoned, battle-hardened clients who sought guidance, not from enterprise, but from fellow übergeeks, who could not only distinguish paste from pearl, but grades of diamond.

Then, the real revolution happened, without fanfare or pundit acclaim. We. Took. Control. No longer following enterprise’s lead, enterprise now followed us. Apple not only recognised the revolution, they enabled it by placing the consumer at the centre of their business strategy and product offerings. It stood the industry on its head, and landed the once mighty MS, wrong-footed, on their arse.

However, in the post-PC era, not only has the pace of innovation quickened, led unequivocally by Apple - still - but we have returned to that quintessentially free market environment characterised by competition, marked not by monopoly but plurality of offerings and options. This is something that neither investors nor the chattering classes of the pundits seem to appreciate (as in ‘like’). Based on the dynamics of MS vs Apple in the 1990‘s, they seem to believe that the zero sum game is the standard - the norm for computer tech competition (NB: no one seems to expect this for any other industry). Not only do they view any competitor to Apple as potentially the next MS poised to reduce Apple to single-digit market share while maintaining an outsized, 1990’s style MS vs Apple dominance; they seem to view the fact that Apple haven’t dealt the deathblow to their rivals in any given field as a failure - on Apple’s part - rather than as a success of the free market to permit competition and choice.

Not only is John Kirk right in his verdict of faulty analysis on the part of analysts who fail to look at the data regarding market and profit share (Apple’s profitshare having increased while relative marketshare has declined), and who continue to sound the death knell on all things Apple (no one else, mind you, should their marketshare slide or they fail overwhelm); the whole premise that a healthy tech market is characterised by monopolistic market share and profit share dominance by one company is asinine and based on nothing but our aberrational entry into the modern personal computer era, and one from which we, like a group of weekend drunkards, are still recovering.

I, for one, do not wish to see a market owned by any single company, including Apple. As a client of Apple, I think it best that the market remain competitive, and believe Apple are at their best when they are pushed, indeed, besieged, by competition and are forced to dig deep.

My final point, being in the post-PC era is not simply about devices and how we use them, it is also about a newer, healthier and more robust market dynamic that will power us forward into continued innovation.

John Crawford

Always read your articles, John, particularly wab95’s comment.

stefn

I do have the awful feeling that Google’s plan is to make us all street cameras for its maps.

gavin

So are we thinking this new laptop from google is innovation….?
and the marketing for this is innovative?

I took a look and it’s so similar to apples product and marketing I thought it was a parody. copy copy copy down to the cosmos on the screens in the video - and yes just to get us to become advertising trolls for their business. if goggle continues to work this way then I have lost faith.

Brian

If you ask me, nothing in Android to date passes the bar for innovation.  They copied the iPhone, then allow you to draw on the screen.  And they hype ‘bump’ file transfer as if it were cool and new.  It was played with in 2008, on iPhone, it’s really stupid, it’s not ‘innovation’ by any stretch of the imagination.

Android has not caught up on the app store or in sales either.  The Malware Place has as many titles now, which is a big deal, but they are lacking so many great titles, and they aren’t selling software, just shareware, adware.  That’s a death knell, waiting to happen.  Very, very few apps ship on Android first, what would be the point?

Win8 phone has more innovative features, at least it’s something, for ONCE in Microsoft’s history, that they haven’t just ripped off from Apple and pretended it was new.  But no one is buying that anyway, so it hardly matters.

stefn

The prices of Google Glass and Chrome Pixel tell the story: it’s all about mindshare, not market share. Mere testosterone posturing by the boys. Apple delivers innovation; it walks where Google only talks.

Terrin

I agree with Adam Chew. The word innovation is too loosely used today. For me, innovation is bringing to market something completely new or making significant advancements on an older idea. Android as a whole was greatly inspired by iOS (which was inspired by Apple’s Newton). Nothing really new there. Samsung’s products were greatly inspired by Apple’s products. Nothings really new there. I would venture to say that Microsoft’s current phone OS is far more innovative than Android, as it came up with something completely different in the form of active titles and the overall layout of the GUI.

I also don’t get Amazon’s Kindle being considered innovative. It simply is a forked version of Android, with a GUI inspired by Apple’s Cover Flow. Now the decision to fork Android and put its own GUI on top to get around Google was innovative business strategy. Barnes and Noble’s Nook fits the innovation bill better, as it actually has interesting features like built in LED lightening.

Hamranhansenhansen

I kept looking, but I didn’t see any examples of Apple’s competitors innovating in this article, just some unreleased tech demos (Google Glass) and slight variations on Apple products (an iPhone clone that is an inch bigger, an iPad clone that is an inch smaller.)

Innovation is when you do something so good that everybody has to copy it, that the old way becomes clearly obsolete to almost all observers. A classic example is the PowerBook palm rest with centered pointing device from 1991, which every other notebook almost immediately copied (obsoleting the snap-on accessory trackball you clipped onto the side of the notebook.) A modern example is the iPhone full-face multitouch screen with soft keyboard (obsoleting the BlackBerry-style mechanical keyboard and roller ball,) or the iPhone App Store (obsoleting software on CD/DVD and also obsoleting software in ad hoc insecure Web downloads.)

Even if Google Glass were shipping, it is an iPhone accessory, not an iPhone replacement. The device talks via Wi-Fi with an app on your iPhone or Android-based iPhone clone.

The thing is, Apple is taking 75% of the profits in all of their markets, including the entire phone market and PC market. There isn’t a lot of money left in the market for a big company to go after.

I do see lots of innovation outside of Apple, but it is small companies making accessories. For example, the MYO armband or Apogee’s pro-quality mobile microphone/interface for iOS devices.

MYO armband
https://getmyo.com

Apogee MiC
http://apogeedigital.com/products/mic.php

 

Hamranhansenhansen

> Today’s smartphone market is better than it would have
> been if Apple remained the only game in town. This competition
> has brought better choices for iOS users and Android users.

No, it has not. There has not been any competition.

Apple sells the high-end phones, Android has been adopted by almost all of the low-end phones. The iPhones are used in new and interesting ways, and in fact replace PC’s in many circumstances, because of their powerful native C/C++ apps and huge app catalog that covers every kind of app. The Android phones are used to take and make calls, and send and receive texts, just like the phones before them for many years.

If not for Android, we would have a better phone market right now. Which offers more choice and competition:

- you have the choice of an iPhone or an Android phone, and the Android phone can come from Samsung, Motorola, LG, or Sony

- you have the choice of an iPhone, a BlackBerry, a Nokia, a Samsung, a Motorola, an LG, or a Sony, each running its own unique operating system.

… the latter is actual competition.

A big reason that BlackBerry and Nokia are struggling is because their investors did not believe they could compete against anti-competitive Android. If there is an operating system that is cloning the iPhone and giving that away for free, how can you get investors to fund your 2–5 year effort to catch up to iPhone with your own software? You can’t.

Android is fundamentally anti-competitive. It is not an argument for competition. That is just Google PR. Thousands of different phones that all run Android badly is not competition.

Bazz

The advantage Samsung had was that Apple used its manufacturing power to make the iPhone. It doesn’t take a genius to join the dots (even though there was supposed to be walls). Any competitor would be an idiot not to peek! Spying is an old profession and anything for free means you have more money and time for other things!

Jobs and Apple with and without him are naive to believe that business is a gentleman’s sport!

The irony is that Dell succumbed to its manufacture - Asus and that may be Apple’s destiny!

Will

Man, there are so many haters out there.  Infact, mainly just Apple haters.  It speaks volumes that people would rather hate somebody else’s tech purchase decision than to just love what you have.  Android users, just enjoy what you have and let people who buy Apple products enjoy what they have.

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