Apple Has Mobile Monopoly Momentum

April 13, 2010
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If Gizmodo and Wired are to be believed, Apple is  leading  the way to a new computing paradigm – lite, bright, easy to setup and use, long battery lifed computing and communication devices. Call it the Mobile Lineup made up of iPod, iPad, and iPhone currently. But Apple has is taking a risky road because Apple is driving towards a monopoly position in the market place by using a closed and highly proprietary ecosystem  in the Apple mobile lineup. This is a closed ecosystem because all plugins, extensions and apps must go through Apple’s approved software certification process. And those extensions and apps/plugins  must  use Apple approved software development tools. Hence Apple is not approving of any software that uses the likes of Flash, Java, or other browsers other than Safari for software development on its mobile line-up.

Steve Jobs  insists these development software tools are being rejected because the tools are “too buggy, too slow and  too great a security risk”. But the real reason is because these tools  could allow developers to add software that was not sold through App Store. This software lockout forces all software on the Apple Mobile line-up to go through the Apple App Store. Kachhing!

As well all media/content on the Mobile Lineup such as  software/apps, games, books, videos, even ads must be sold through Apple Agents => iAds, iApps, iBooks, iTunes, and iGetYourBucks. And like Google through Search, Apple makes various percentages on all user transactions on its Mobile Lineup of cool, light-weight, must-have, low-power, easy to install/customize, easy to use,  high design+styling Mobile Devices. Steve Jobs has seen the power of monopoly with Microsoft and Google and he is not going to miss out this time. Hence at the iPhone OS4 announcement this past Friday Steve Jobs rejected unequivocally both Flash and Java on iPhone OS4 yet again [including Adobe’s workaround, Flash generated Objective C code is also “persona non grata” in the Apple Mobile Lineup].

Steve Jobs is betting big that his huge leads in mobile consumer smart devices [think iPhone, iPod and now iPad] plus the new iPhone OS4 features will allow Apple to extend its Mobile Lineup into Corporate/organizational environs displacing RIM and Microsoft Mobile that currently dominate those markets – 57% smartphone market share for RIM+Microsoft in Feb 2010 according to comScore.
So the iPhone OS4  preview was chock full of corporate pleasing announcements:
1)multitasking both locally and for mobile services;
2)remote mobile device and software mgmt. tools;
3)uniform inbox, Exchange support, multiple mail accounts, and attachment opening among others;
4)Data+mail encryption and VPN security;
5)Basic improvements – files, folders, backgrounds, etc emulating Palm webOS and Android capabilities;
6)Corporate server based app distribution and Mobile device management.
And these were just the highlights. Infoworld’s Mobile Edge was so impressed they urged companies to switch from Microsoft and RIM to Apple smartphones and Mobile devices right away.  And even PaulThurott, a strong Windows supporter, acknowledges many of these same features as putting Apple’s iPhone and iPad on even if not better terms with Windows Mobile, RIM and Android. So Apple is sees business users and cannibalizing Microsoft and RIM as a major thrust not just for iPhone but the complete Apple Mobile Lite lineup.

Does HTML5 and Browsers Defeat the Apple Software Lockup?

The whole idea behind iPad and the Apple Line-up is to take advantage  of a)the Kiss rule – make using computing trivially easy not just in setup but also upgrading and operating the machines [the legacy of Windows horrors of the past 10 years will haunt Redmond] and b)of the 80-20 rule – 80% of users want a lite and easy to use computing and communications connection . Only about 20% of computing users are doing high octane creative tasks on their computer – the rest are using their devices primarily  for lite tasks: social interaction and communication, games, music and video entertainment or  browsing the web. Maybe  half of those require simple word processing, spreadsheet number crunching, presentations, and/or  image sharing. What these 80%users want are  computing devices  that are attractive, hand-swipe easy to use, have great battery life and are highly portable and will not only work but be useful wherever it is called upon to perform. But theey also want to upgrade and customize with ease.

And that is the Apple magic sauce. Apple Mobile device users want to be able to customize their mobile devices quickly and easily  with the apps and services they want – simple wizards/tweet like widget/apps that are free or inexpensive .  And finally allow them access to the Web using a browser interface. Ahah, you say, the Web access breaks the Apple stranglehold on  its Mobile lineup. There are thousands of apps that run on the Web and all of these bypass the Apple iApp  Store.

Not so fast. Apple controls the only browser that runs on its Mobile Lineup – Safari. Safari might be brought under a similar regime to the iApp Store. Users have to pay at some future date to use critical JavaScript functions or libraries. Or a toll maybe charged for using certain websites .Just exercise your iGreedy imagination. Finally, Apple can have the last say on how/what browser apps  are allowed on board any or all of their mobile lineup since Apple controls the browser.

Summary

At least twice Steve Jobs  lost market leadership and even dominance – [think Apple II and Lisa/Mac]. With his Mobile Line-up,   Steve appears to want to control all of the processes on using his devices – and to profit as much as possible on every  extension of the utility of his device for every customer.  So he creates a closed development environ to help  secure his gateskeeping function – and voila you have The Apple Mobile Monopoly.

So Steve Jobs is setting up some  interesting tests in the IT market. Do users continue to buy the leader, Apple’s closed Mobile Lineup or do they consider Google’s Android or Intel/Nokia’s Meego  or HP’s Slate or the wave of Netbooks and game consoles which are considerably more open allowing Java and Flash development, have open APIs, and have less onerous App Store terms. Or do consumers really care?

Recent events in the market suggest they might. Android is starting to get major traction as March saw over 9000 apps registered for Android – ten more months of that rate of app creation and Apple’s number of apps lead vanishes . And there are a whole slew of Netbooks with Android, ChromeOS,  and their ilk are ready to supply similar features and convenience  at lower prices and better equipped  then the Apple Lineup.

Meanwhile, Microsoft has the problem that their Mobile Phone 7 is in the process of being birthed [I suspect  they will have to do another Vista and call it Wowsa Pinkie to make their holiday 2010 target for a somewhat Mobile Phone 7 intro]. But the broader issue is how will Microsoft, Masters of  Proprietary, distinguish their Mobile Phone 7 from Apple’s very proprietary Mobile Lineup – being half open?

Finally, in case you wondered, the markets are working. This Mobile market Events are not just  the Clash of the Titans. Rather this is a case of Economist Joeseph Schumpeter’s Creative Destruction … uhh Creative Disruption. The problem for Apple is that Steve’s proprietary and closed approach could have tip it into a classic case of Creative Self-Destruction.

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