How Apple Leaves Money on the Table and Still Flourishes

While both Apple and Google struggle mightily to improve the security of iOS and Android, the fact remains that Apple has developed a much better delivery model, in the face of modern security threats, with the integrated OS and hardware of iPhones (and iPads) combined with the single supplier model and a closed system.

A question then arises. When Apple made this design and business decision, was it because Apple's executive team, led by Steve Jobs back then, believed in the importance of the customer experience or because Apple was trying to maximize revenue? After all, previous experience with the Macintosh showed that a closed system would probably suffer in the face of an eventually developed smartphone OS that would be spread across lots of different kinds of hardware. This proliferation happened with Windows on PCs in the 1990s and just about brought about the bankruptcy of Apple in 1996.

And so when Apple steadfastly continued with a closed system on the iPhone, one might have surmised that Apple and the iPhone would suffer the same terrible fate that almost led to the collapse of Apple and the Macintosh in the mid to late 1990s. What happened?

It turned out that the proliferation of the iPhone on a massive Internet meant that the closed system would be better positioned to handle worldwide security threats. Yet, Apple couldn't have been assured that the strategy would win out when the iPhone was first being developed and the idea of a cell phone becoming an Internet phone hadn't yet jelled.

Google, when faced with the same business decision made a conscious choice that was the opposite of Apple's. (For more on Google's previous decision making, see the fabulous: "Google’s $6 Billion Miscalculation on the EU.") The Google philosophy was to let everything be open. All would be well. Everyone would jump on the Android bandwagon, and the iPhone would become marginalized.

A Funny Thing Happened on the Way to the Bank

But wait. A funny thing happend. The open model that worked so well for Microsoft and Windows starting in the 1990s turned out not to work so well on a global Internet in which a smart team of fellows, lounging in their pajamas in some foreign country, could steal information from your Android smartphone (or hijack it) here in the U.S. 10,000 km away. The very design of Android and its philosophy led to massive fragmentation of the OS.

This fragmentation of Android versions amongst the carriers and their politics of resistance continues to put Android users at risk because older versions of Android are still out there and often will not (or cannot) be updated. Meanwhile, as I recall, 80+ percent of iPhone users are on iOS 8. For more on the implications of the exploding fragmentation see the very important: "Waiting for Android’s inevitable security Armageddon."

In fact, all Android userd should get up to speed on Stagefright.

What I'm getting at here is that when a corporation makes a decision to utterly maximize revenue, at all costs, fearing that not a single penny should be left on the table, a bad outcome almost always arises.

How companies make these decisions is an art form that's seldom discussed except in some business management books. Business people read them and nod approvingly, but in the heat of corporate meetings, the tendency to go after every last dime, going against the best interests of the customer, can have dire consequences.

Despite Apple's occasional failings, the way the executive team makes these kinds of decisions has a direct impact on millions of its customers. Money is left on the table, but that's okay because customers line up to be delighted and buy the very best. There is much to appreciate about that process these days.

Next page: the tech news debris for the week of August 3: Internet TV mania.

Page 2 - The Tech News Debris for the Week of August 3


We go through cycles of technology. We collect various things, but the underlying technology keeps changing on us over time. We saw that with VHS, Betamax, DVD, Blu-ray, and now Ultra HD Blu-ray. In a similar fashion, we're in a new era of TV on the Internet that's reminiscent of the early days of broadcast TV. Phillip Swann at TVPredictions has a nice summary of the situation that provides a broad perspective for all us who use Internet TV. "Why Streaming Is Like TV In 1951."

4K TV on the Internet. Whoda thunk? Image credit: Sony

And for those who want to follow-up on the downstream side and get an update on the state of the Apple TV and other offerings, this is a great summary by Dan Moren at Macworld of where we are and where we may be going. "What the next Apple TV needs to succeed."

What's cool about Internet TV in 2015 is that there is often some recourse when a fan favorite TV show is cancelled. One example is Longmire. That fabulous show, cancelled by A&E after three seasons has now been picked up by Netflix. Top Gear has been picked up by Amazon (Prime). For the politics of this and more, see: "Cancelled TV Shows: Free Agents To Fill The Bench For Netflix's Future."

Also along these lines, if you've been wondering how HBO Now has been doing, here's a report on the statements by HBO CEO Richard Plepler. "HBO CEO Says Less Than 1% of Subs Switching to HBO Now." I attribute this to the nascent status of Internet TV and the fact that many potential cord cutters still don't feel like they're being offered all the options they'd like. The tipping point (when cable becomes truly irrelevant) has not yet arrived. Can Apple get us to the tipping point?  We're eager to find out.

However, even as we inch towards the tipping point, it may arrive faster than expected. See: "Terrible Week for TV. Great Week for the Future of TV." by Peter Kafka.

A final note on Internet TV. I remember the very early efforts at Internet video when I was at The Oak Ridge National Laboratory in the 1990s. We were struggling with Internet video on Unix workstations and would have been astounded to get a glimpse of the day when TCP packets could be so coherently routed as to deliver not just NTSC video, not just high definition (HD) video, but Ultra High Definition (UHD) video. But then it's been 20 years. Amazing.

What also would have astounded us back then is the idea that a new release of an OS has to be gone over with a fine tooth comb to weed out all the back end, unsavory agenda items that users aren't told about and never get a chance to make an informed decision about. See: "Sadly, Windows 10 is Stealing Your bandwidth 'B Default' — Disable it Immediately."

The question is, if this feature is so cool, why aren't users given a chance to opt in before they blow their data caps. And if it's kept hidden, born of strained necessity and on by default, how does that attitude respect the customer? Again, sigh, see page 1 here.

Finally, I bring the next item up because I have previously discussed the miracle material graphene. We can expect to see more of graphene in our smartphones in the future, used in various ways. See: "New method produces graphene crystals 'in minutes instead of hours'"


Particle Debris is a generally a mix of John Martellaro's observations and opinions about a standout event or article of the week (preamble on page one) followed by a discussion of articles that didn't make the TMO headlines, the technical news debris. The column is published most every Friday except for holidays.