On Apple, Android and Openness

‘Open’ is not a synonym for ‘better’. It doesn’t have much to do with why Apple lost to Microsoft, nor with what will happen in the mobile handset market.

Scrolling back to the Apple versus Microsoft wars, ‘Open’ wasn’t really the point. The PC market at that time was largely driven by the corporate market, which wanted a cheap commodity product. The buyer didn’t care about fit & finish or UI, but he did care that he had no idea if Apple would still be selling the same box in a month, and he cared that he couldn’t get three competing quotes. Meanwhile the home buyer looked at Apple and saw expensive beige boxes that wouldn’t run the stuff he used at work, and he didn’t know the UI was better because Apple had no retail and couldn’t demo the UI in advertising materials. 

So. Apple sold an insufficiently differentiated, expensive product into a commodity market that neither knew nor cared about Apple’s advantages. Licensing the OS earlier might have solved this, but at the cost of turning MacOS into another Windows, with all the compromises that means. Would anyone have loved their Packard Bell Mac? If Apple hadn’t made those ‘mistakes’, would anyone have cared? 

The handset market now and in the next five years is utterly unlike that. Phones are bought on experience and design and they’re a personal decision. Android goes head to head with Apple on areas that Apple excels at - and where Apple can communicate its advantages, thanks to retail and to the fact that you can demo an iPhone in a TV spot where you couldn’t demo Mac OS7. 

Where Apple is weak is not on product, as they were on the 90s, but on price. This year’s story will definitely be the <$200 or even <$100 Android smartphone. Making a phone in that price point is far more significant to Apple than a VZW handset. 

However, this doesn’t pose the same existential problem. PCs were a ‘winner takes all’ market where phones are not - even if Android becomes 50% of the developed market handset market, that won’t stop Apple taking 5% or 10% and raking in cash. 

Tangentially, making a $200 iPhone is very hard. How do you make an iPhone that wholesales for 1/2 the current model, doesn’t fragment the platform, doesn’t cannibalise the $500 model and has the same level of fit & finish? Of course, if Apple was ‘open’ then Acer or Dell or HP could make an iPhone for $200. We can be sure it would be possible, but would it be any good? The reason we love Apple is that they ask that question, and if the answer is “no” then they don’t ship the product.