Thursday, March 14, 2013

Welcome to Google's Playground, Apple

The world  at least the world outside of Phil Schiller  finally accepts that The Google has taken a bite out of Apple with Android.  More like a few bites, in fact.  Operating system parity, comparable functionality, and variations in form factor/price point, etc., have fueled Android's surging popularity and are very likely to continue doing so for an extended duration.

Those, however, are largely yesterday's issues.

Where I believe this battle is headed  and where I think Apple is in a massive world of hurt  is Web services.

In my view, hardware and core OS functionality have largely reached a near-term point of peak innovation; yes, there will be a perpetual line of newer, faster, shinier laptops/phones/tablets/etc., but improvements are likely to be only incremental to the current lineup of state-of-the-art devices.  As a result, the product itself will become effectively transparent to the end user, with attention, instead, shifting to the Web (or, cloud) services/content that those devices allow easy access to on an anywhere, anytime basis.

Welcome to Google's playground, Apple!

Almost everything Google has done since inception has focused on anywhere, anytime cloud-based computing:  Search, Gmail, Maps, Chrome, Voice, YouTube, Calendar, Drive, Plus, Local, Wallet...  Perhaps more important, Google absolutely prints money, either directly or indirectly, from use of many of these cloud-based services, even if those services are accessed via an Apple device.  And, stating the painfully obvious, Google does the cloud pretty damned well.

Apple, on the other hand, is almost at ground zero.  Most of the company's historical focus, R&D, revenue, and profit, have centered on hardware, operating system software, and the deep integration of those two elements; and, for years, it did those more elegantly and effectively than any other company on the planet, creating a harmonious, closed-loop ecosystem that "just worked."

Open Web services that function like utilities  seamlessly, across all devices, across all operating systems, all the time  at low or no incremental cost, in the face of stiff competition from all sides?  Not so much.

Not to throw iCloud, iMessage, and iTunes Match, et al, under the bus entirely, because those are certainly functional offerings upon which to build  but those are simply the mandatory "base level" offerings to even have a seat at this table; and, yet, they still come up short in this regard.

And, then... there's maps. Kidding. Well, not really kidding  it's just too easy to highlight the obvious on the topic. So, I won't.

To compete broadly on the battleground of tomorrow, Apple must break with its history and immediately introduce a broad spectrum of high-impact, high-value, mass-consumption-type Web services that function seamlessly across all vendors, all OSs, and all devices.  And, the only way I see them doing so expeditiously and successfully is through acquisition  buying services that have already proven themselves in the hands of consumers at scale.  While this approach may be somewhat anathema to Apple, Web services are, as well, so it seems apropos.

What does success on the Web services front mean for Apple?  At best, I see the beginning of a new era (and, to set the record straight, this has nothing to do with Steve Jobs), characterized by diminished influence, slower growth, declining revenue, shrinking margins, and a languishing/falling stock  not 1980s-PC-era-on-the-verge-of-going-out-of-business stuff, but painful, nonetheless.

And, what does failure look like?  1980s-PC-era-on-the-verge-of-going-out-of-business stuff.  Only kidding.

1 comment:

  1. See One Blind Squirrel post of 5/7/13, entitled, "Throwing Sand In Apple's Eye," to see how Gmail's update for iOS is a textbook example of Google winning in the next battleground.