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Platform wars are breaking out all over
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sleepygeek
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In a 1996 interview Steve Jobs said “If I were running Apple, I would milk the Macintosh for all it’s worth ? and get busy on the next great thing. The PC wars are over. Done. Microsoft won a long time ago.” OS wars are still over IMO, but there’s a whole bunch of new mission-critical platform wars.
I still believe Steve thought he was working with Google to create a world where content was in open formats, and Apple could deliver a sustainable proprietary platform offering innovation and a better user experience, which could survive alongside other such proprietary-plus-open platforms. Working for a world where the Microsoft monopoly couldn’t happen again. Google’s win - it can see and index all content; Apple’s win: it can grow and develop true to its own principles. Both OSX and Android have open source foundations. I think the PC wars are still over, even though the landscape is changing. But suddenly Google looks as if it wants to be the new Microsoft.
Even Windows borrows from (BSD license) open source, but there are no open source CPU architectures. Apple’s getting into CPU’s. Now, with the purchase of Agnilux, it appears Google is going into the (proprietary) chip business as well as the phone business and the OS platform business. An ad-funded re-implementation of Microsoft’s old business model. Within 2 years of selling out to Apple, a slice of PA Semi quits, starts up Agnilux, sells itself to Google! Did all PA Semi IP belong to the company or was some licensed from officers, transferrable to Agnilux? How much of his savvy in this area did Schmidt take from Apple while on the board?
Then we had Intel and Apple buying up slices of IMG to try to keep control out of the others hands, and Apple now rumored to buy ARM. And ARM’s Cortex A9 looks likely to soundly trounce Intel’s Atom in the netbook/iPad space. It certainly looks as if a CPU platform war is shaping up.
Then there’s the cross platform API war. Flash/Silverlight/HTML5.
And the imminent ad platform war.
OS war? Not so much. But over the next five years there will be big winners and losers in the others. My head is spinning.
[ Edited: 22 April 2010 04:15 AM by sleepygeek ] -
sleepygeek,
Thank you for starting this topic. What is the chance of Apple winning these platform wars? Do you like iAd?
By PC/OS war, do you mean desktops? iPad could be the form factor that would eventually replace desktops and laptops, as the mainstream computing platform.
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Stay Hungry. Stay Foolish. - Steve Jobs
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sleepygeek - you’re not Kontra, are you? Some of your views on Google trying to become the next Microsoft resemble his a lot.
I agree with your points. Going one step further, however, cross-industry convergence seems to happening at an alarming rate. These wars, in other words, are in my view often individual battles in a larger war. As an Apple fan and shareholder, I should be happy - but sometimes I feel like it is almost too much for a single company (or several such companies) to be producing all the devices, including the components of those devices, the software, the services, the network, and even controlling all the content.
It’s a lot of fun to ponder these issues.
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... - but sometimes I feel like it is almost too much for a single company (or several such companies) to be producing all the devices, including the components of those devices, the software, the services, the network, and even controlling all the content.
It’s a lot of fun to ponder these issues.
Few years ago, we blogged about the possibility of Apple spinning out subsidiary companies, with Apple Inc becoming something like Berkshire Hathaway. We even dreamed about Apple owning a bank. So far, no evidence that Apple intends to do so.
Btw, Apple doesn’t want to control everything. It just wants to make the whole widget, and controls the user experience and critical technologies. The multi-media applications are for keeping the Mac platform alive, especially during the first five years of SJ’s return.
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Stay Hungry. Stay Foolish. - Steve Jobs
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great topic, sg
I believe one of the reasons this is getting so confusing is that Google is spinning in so many different directions. One group is hell bent on competing with Apple for an apps based platform, while another group wants to put everything in the cloud. These are polar platform directions. If Google was focused, they might be scary, given their cash generating ad machine and software prowess. But they are the opposite of focused: they continuously throw up beta projects in every direction just to see what sticks. Maybe they’ll get lucky and one of their directions will pay off big, but I’m skeptical. For awhile, Google’s brand seemed impervious to its many small failures of direction, but recently I see the tide turning. The Nexus One debacle may have finally burst people’s fascination with the “Google Phone.” Google may be at risk of spinning out of control entirely.
For awhile I was also confused about Apple’s strategy of launching an iPhoneOS platform while competing with Microsoft on a desktop/laptop platform with OSX. But with the launch of the iPad it is becoming increasingly clear that the iPhoneOS platform will either obsolete OSX by design, or Apple will merge OSX and iPhoneOS, but either way, iPhoneOS is the platform of the future for Apple.
It is too early to declare a victor in the platform wars, and there are other interesting horses in the race. Facebook is also a platform, with incredible momentum.
In the near term, Apple is poised to grow no matter what, but the moves it has been making the last few years are crucial to its success a decade ahead.
Its fun to watch this unfold, particularly if you don’t take Google too seriously. And Microsoft is also good for comic relief.
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It is too early to declare a victor in the platform wars, and there are other interesting horses in the race.
That’s an understatement that I have some knowledge about.
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alcatholic
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It is too early to declare a victor in the platform wars, and there are other interesting horses in the race.
That’s an understatement that I have some knowledge about.
Nokia? But aren’t they assumed to be one of the main horses in the race.
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Off again, on again…
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Nokia is in the race, but their odds are 50-1. I could imagine laying down a bet for them to show, but not to win or place.
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John Molloy
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In other words, MSFT managed to LOSE $1,659,000 in the online advertising business in 6 months…
Sorry Artman it’s largely irrelevant. I am not sure really how Microsoft accounts for stuff but basically they are earning about a billion dollars a month in clear profit. They can keep throwing money at stuff until they get bored. That is in fact their modus operandi. They have to keep throwing more money at more stuff because they’d only get taxed on it if they didn’t do it anyway.
Meanwhile they keep going forward with their layoffs because, heaven forbid, the second largest (or is that third?) cash machine can’t actually pay to keep people employed.
They don’t have a monopoly, I don’t think they are doing anything wrong legally, but it does seem odd that they can just keep throwing money at stuff until they outspend any other competitor and claim the market.
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I disagree with your conclusion regarding Google’s focus and strategy. I believe you are missing the bigger picture. Google want’s to provide free OS’s (including web browser and office applications) for all devices in return for being the default search engine. This is a brilliant strategy that is likely unstoppable. I cannot imagine how profitable this company will become if they succeed. I am long both Apple & Google, but in the short term I believe Apple’s stock will grow faster.
great topic, sg
I believe one of the reasons this is getting so confusing is that Google is spinning in so many different directions. One group is hell bent on competing with Apple for an apps based platform, while another group wants to put everything in the cloud. These are polar platform directions. If Google was focused, they might be scary, given their cash generating ad machine and software prowess. But they are the opposite of focused: they continuously throw up beta projects in every direction just to see what sticks. Maybe they’ll get lucky and one of their directions will pay off big, but I’m skeptical. For awhile, Google’s brand seemed impervious to its many small failures of direction, but recently I see the tide turning. The Nexus One debacle may have finally burst people’s fascination with the “Google Phone.” Google may be at risk of spinning out of control entirely.
For awhile I was also confused about Apple’s strategy of launching an iPhoneOS platform while competing with Microsoft on a desktop/laptop platform with OSX. But with the launch of the iPad it is becoming increasingly clear that the iPhoneOS platform will either obsolete OSX by design, or Apple will merge OSX and iPhoneOS, but either way, iPhoneOS is the platform of the future for Apple.
It is too early to declare a victor in the platform wars, and there are other interesting horses in the race. Facebook is also a platform, with incredible momentum.
In the near term, Apple is poised to grow no matter what, but the moves it has been making the last few years are crucial to its success a decade ahead.
Its fun to watch this unfold, particularly if you don’t take Google too seriously. And Microsoft is also good for comic relief.
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Inflation robs from the past, deflation robs from the future. Pick your poison.
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I disagree with your conclusion regarding Google’s focus and strategy. I believe you are missing the bigger picture. Google want’s to provide free OS’s (including web browser and office applications) for all devices in return for being the default search engine. This is a brilliant strategy that is likely unstoppable. I cannot imagine how profitable this company will become if they succeed. I am long both Apple & Google, but in the short term I believe Apple’s stock will grow faster.
You may be right, but what if none of Google’s OS’s get sufficient traction, partly because of their lack of focus? Then they have no leverage to hawk their search engine. Imagine if the iPhoneOS gets a 70% OS market share. Apple can then replace Google’s search engine with one of it’s own, which will be accepted by it’s loyal fanbase as long as it is reasonably close in functionality.
Perhaps you assume that just because Google will provide its OS’s for free that this will guarantee sufficient traction. That’s not so obvious to me. Nor is it obvious to Google itself, if you follow their recent moves to sell their own phone and buy their own chip team.
Google teeters on the edge right now. If it gets sufficient traction through some combination of Android and Chrome, the future is as bright as you foretell. But the clock is ticking; if Apple gets too much traction in the next two years, they may be at Apple’s mercy, which is not a good place to be.
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Google want’s to provide free [xxx] in return for being the default search engine. This is a brilliant strategy that is likely unstoppable. I cannot imagine how profitable this company will become if they succeed.
I thought they already were the default search engine, and were hugely profitable due to their success. What’s this unstoppable strategy and profitability that you can’t imagine? Going from 70% to 80% share? That’s like Apple giving stuff for free (eg content) just to try to maintain 15% growth for the iPod business, circa 2007. Imagine Apple exclusively focusing on iPod; no Mac, no iPhone, no iPad, no software revenue or content, giving it all for free. Is that Google’s brilliant strategy?
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sleepygeek
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A few thoughts.
1. don’t be fooled: Mac, iPod, iPhone and iPad are all one platform, at least from a market strength and a code base point of view. But rather sneakily, I think Apple has succeeded in getting them counted quite separately by Gartner et al. It can be the biggest personal platform on the planet while appearing only a quarter of the size.
2. look back at the early iPhone days. SJ banged Google’s drum as loud as he could - no native apps for iPhone; HTML5 and Javascript are the only API. Yawn, tumbleweed blows past. Then came the SDK and App store, and everything changed overnight. It’s very clear that the world isn’t ready to be sold a pure cloud experience. No wonder Android now has an SDK and an App store.
3. I find a pleasing analogy between this balloon experiment, and platforms; if you connect two sufficiently similar platforms by means of cross-generation tools, the smaller, contrary to intuition, will in time collapse into the larger, not benefit from the “larger market”. That danger is why Cocoa touch has to to stay in isolation for now.
4. Often people say Apple will have their own search engine next. I cannot see any current business purpose. Google and Microsoft are competing to pay Apple to use theirs at no cost to the user. But Apple can see all the search terms, and has access to location data, and credit card details, purchase history etc etc. Apple can take away ad revenue from the search engine any time they want, and until the PC is utterly dead, the search engines can’t turn Apple’s users away. On Apple’s platform, it’s Apple that’s in a position to be the gateway to advertising, not Google. Google’s current business model is totally dependent on the PC platform, and the PC platform is going away.
[ Edited: 23 April 2010 03:17 AM by sleepygeek ] -
Android is out just a few months. It has already gotten amazing traction. Much quicker than the iPhone. Android is available on almost every network, sometimes with multiple devices. Apple cannot ramp up this fast and cannot keep up with the distribution when you are competing with all of the third party manufacturers. Google will port their Android OS to tablet manufactuers as well and they will likely follow the old path of Microsoft by capturing the low end and larger audience. Google will make 20% on application sales on many more sales because their reach will be greater. The iPhone is at one price point., and it’s the highest. Apple’s model is highly profitable, but it’s not yet a mass market stategy. It is a fantastic proprietary stategy. I do own 5x more Apple stock than Google because Apple’s current growth rate is higher and it’s PEG is substantially lower.
I disagree with your conclusion regarding Google’s focus and strategy. I believe you are missing the bigger picture. Google want’s to provide free OS’s (including web browser and office applications) for all devices in return for being the default search engine. This is a brilliant strategy that is likely unstoppable. I cannot imagine how profitable this company will become if they succeed. I am long both Apple & Google, but in the short term I believe Apple’s stock will grow faster.
You may be right, but what if none of Google’s OS’s get sufficient traction, partly because of their lack of focus? Then they have no leverage to hawk their search engine. Imagine if the iPhoneOS gets a 70% OS market share. Apple can then replace Google’s search engine with one of it’s own, which will be accepted by it’s loyal fanbase as long as it is reasonably close in functionality.
Perhaps you assume that just because Google will provide its OS’s for free that this will guarantee sufficient traction. That’s not so obvious to me. Nor is it obvious to Google itself, if you follow their recent moves to sell their own phone and buy their own chip team.
Google teeters on the edge right now. If it gets sufficient traction through some combination of Android and Chrome, the future is as bright as you foretell. But the clock is ticking; if Apple gets too much traction in the next two years, they may be at Apple’s mercy, which is not a good place to be.
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Inflation robs from the past, deflation robs from the future. Pick your poison.
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The unstoppable strategy that is already highly profitable becomes wildly profitable when they replace Microsoft as the OS of choice by 3rd party manufacturers in phones, tablets and computers and reap 20% of all application sales on all devices. Apple’s strategy is to offer a premium product at a premium price (Mac computers and iPhones). This is highly profitable and scales great globally but it is not mass market. Google will get the mass market and the spoils it provides.
Google want’s to provide free [xxx] in return for being the default search engine. This is a brilliant strategyX that is likely unstoppable. I cannot imagine how profitable this company will become if they succeed.
I thought they already were the default search engine, and were hugely profitable due to their success. What’s this unstoppable strategy and profitability that you can’t imagine? Going from 70% to 80% share? That’s like Apple giving stuff for free (eg content) just to try to maintain 15% growth for the iPod business, circa 2007. Imagine Apple exclusively focusing on iPod; no Mac, no iPhone, no iPad, no software revenue or content, giving it all for free. Is that Google’s brilliant strategy?
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Inflation robs from the past, deflation robs from the future. Pick your poison.
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John Molloy
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Android is out just a few months. It has already gotten amazing traction. Much quicker than the iPhone.
But it wouldn’t have been “dreamed up” by the geniuses at Google if Apple hadn’t laid out the ground work first.
I find that the really interesting thing here is that Android’s speed of use seems to be coming from having faster processors in the machines. Will be very interesting to see when Adobe and Google team up for the great iPhone destroyer - Flash on the mobile phone - and release it to the real world. Will the OS and the processor be fast enough to make it work or will it turn the machines into a sluggish mess? There is a lot on both parties to make this work and make this work well but that is a big ask.
Notice how quick Adobe were to distance themselves from the Joo-Joo when Flash performance was less than stella.
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