It’s the infrastructure, Stupid
In an attempt to get some insight into Apple’s greater
strategy, I spoke to an old friend who is currently located within the Apple
offices in California, working for a parts supplier for the iPhone and iPad.
He’s been an Apple fan for some time and, as such, has all the toys to prove
his allegiance. His take was an interesting one, as he gets to see rival
products in the context of how they compare with Apple and also the synergy of
the whole solution.
Apple’s premise is
that once you have an iPhone, you’ll want an iPad, a Mac and the TV when that
Apple’s premise is that once you have an iPhone, you’ll want
an iPad, a Mac and the TV when that comes out. Why? Well, each of the devices,
while interesting on its own, is something of a digital island. In fact, if you
refuse to use iTunes, they’re practically useless. Once you accept that you
must use iTunes and iCloud, then they start to work together in a subtle but
very effective concord. It’s this harmony that attracts methodological people,
as it demonstrates just how elegant a technical solution you can create when
you control everything. It’s the same argument for totalitarian states, where
the trains run perfectly or someone gets shot.
The problem with that logic is that there aren’t many countries
with the disposable income that allows the full Apple experience, and given how
rapidly the product range evolves, you need even deeper pockets to maintain the
synergy. While this thinking has so far made Apple a small mountain of hard
cash, it does exclude it from the larger portion of humanity, and there is very
little indication that it intends to make a cheaper iPhone or an affordable
iPad. Marketing people in Apple have worked out that the high pricing of its
products in itself creates a demand, much like Prada handbags, which when you
strip away the branding, do much the same job as a Tesco’s plastic carrier bag.
strategy in that context, the products themselves aren’t the key; it’s the App
Store and iCloud that are critical.
So the key is the infrastructure, building and maintaining
an evolutionary ecosystem that allows the products to deliver more than the sum
of their parts, and also hooks people into having the whole range and not just
Seeing Apple’s strategy in that context, the products
themselves aren’t the key; it’s the App Store and iCloud that are critical.
Should Apple start to find that most people jailbreak their devices so they can
decide where they source their media and content from, then the foundation of the
whole model is seriously undermined.
To that end, the walled garden that Apple has created seems
likely to get higher walls, armed guards and probably a minefield around it.
Dark iClouds on the horizon
While the product launches always generate a satisfying buzz
for Apple, its world isn’t entirely cheering tame journalists and product award
ceremonies. There’s a darker side to Apple, where it’s very keen to maintain
its market position, irrespective of what it takes in legal terms to achieve
To this end, with Microsoft, it’s embarked on a policy of
patent litigation that has now become the norm for tech companies across the
world. They’re all dragging each other to court, blocking the sale of their
competitors’ products or defending their own. Initially these ventures went
well, but increasingly Apple appears to have come to a gunfight with a knife,
and having made plenty of powerful enemies, some of whom it actually has
supplier relationships with (Samsung, for example), at some point these
chickens will eventually come home to roost.
Concerned about such an eventuality, surviving co-founder
Steve Wozniak recently called for Apple to drop its patent attacks on Samsung
while talking at Seoul’s Hanyang University. He also suggested that patents and
their associated litigation are damaging many companies’ ability to innovate,
adding “Patents are being overused, and many companies are limited by patent
laws to produce the same products continually.”
He and others have suggested that the patent war is
something that Apple shouldn’t have involved itself in, but without a change of
direction it seems unlikely that it will be tempted to stop until forced to.
That’s also not the only legal issue it’s facing, because
it’s also the focus of an antitrust case that’s looking into the possible price
fixing of ebooks, something Apple and its partners stringently deny.
It’s counter-accused Amazon of stirring up trouble in an
attempt to damage the app store business model, while Apple has made great attempts
to eliminate any ebook or app selling transactional business on their devices
through anything but its own portals. Given how it’s tied this down in terms of
removing applications that allow you to buy services and not pay Apple a large
proportion, it might have difficulty in court arguing that these restrictive
practices don’t represent abuse.
The upshot off all this activity is that when Apple products
start to get substantially less different between iterations, then it can
bemoan the state of patent law as its problem. However, Apple is one of the
major abusers of said law and, as such, it’s a condition that it’s brought on