Is Apple a threat?

As I a watch with a great amount of envy the success Apple is enjoying its always fun to hear the critics. It is always the same story about too much control, no flexibility, a single entity dictating everything, in short it’s about power. A glaring human weakness that these days is finding more comfort in big corporations rather than big governments. In the industry of technology it seems to take on a heightened significance.  After all technology is about defining the future based on what does not exist today.  Much like the classic tales by Jules Verne and H.G. Wellls, we peer into that future with a bit of foreboding and cynicism as it charts un-tread waters that threaten the soul of humanity.  Apple is enjoying a run of success that seems to be defining our future interaction with technology. It seems natural that those old fears would surface.  It seems the human soul is always threatened.

To retread some of history, before we move forward, this sence of doom is not new.  In the old days some 40-50 years ago the technology threat was IBM.  There was a time where IBM spoke and the whole industry just followed in their coattails. It led to many concerns and protests within the industry.  However the rest of the industry had a friend, I simply call the Department of Justice (DOJ).  While they spent many hours in court a new revolution took hold called the Personal Computer (PC).  In a twist of fate IBM would give the rights to the software operating system to a small company called Microsoft.  Before long Microsoft had 90% market share and the industry began to cry of too much power, a single company dictating to the masses, but once again the industry had a friend to turn to, the Department of Justice.  While millions of dollars were being tied up in court the industry did an interesting thing…it changed.  New things like ad driven revenues via search were created and the term mobility took a twist to mean more than just a mobile phone providing voice services.  Before we knew it Apple had returned from the dead and new names like Google, Facebook and Twitter, to name but a few were now the face of the technology industry.

Why do we fear control by a single company – that ability to define what the industry will do and when they do it?  In some instances it is misplaced.  A large part of the fear is not created by the market but by the industry insiders competing against the perceived leader.  There are a couple of areas to consider, one is the developer and two is the competitive landscape

Developer, rightly or wrongly, are the gods of the computing world. for ultimately they bring our imagination to life. There always seems to be this mood against locking developers into a single “stack” platform, what god would be locked into anything? .  Having spent a fair amount of time with developers, they go where the business is plentiful.  Code is code, whether the developer is using Visual Basic or C the difference is not great enough that the VB developer cannot learn C or Java.   The fact that Apple has an army of developers using Object C, which is rather ancient is a testament to Apple’s ability to generate end-user excitement, which then brings an army of developers to their camp.  SO the fact that they are writing in a language that is over 30 years old is not a relevant point.  They are chasing the money, which always seems to be a relevant point.

The competition certainly fears control as it minimizes them.  No one is talking Windows Smartphone, because at least for now there is no business.  Even when Microsoft or HP (remember they bought Palm) talks about a developer platform it is treated rather silently in the press.  When Apple talks it’s like EF Hutton (older folks remember those commercials).  The room goes quite and everyone listens.  Does Apple control the press to?  I am sure to some it may seem like it, but the press is smart and goes where the news is best.  In short they don’t.  It does leave the competition in a quandary.  Do they try to forge their own path, very hard to change perceptions.  Do they play along with the devil?  It could be profitable, but the flip side is it could be suicide.  The biggest fear I would assume is just the fear of being shut out of a very lucrative market.

Could Apple gain a position where they dictate to everyone what their technology experience will be?  Could they be in a position to tell partners and competitors who gets to play in their pen?  Perhaps as it’s an age-old fear.  I am sure some felt that way about the American big three automakers at some point in time – they controlled manufacturing, distribution etc..but does anyone feel that way now?  I am not a free market purist, but the market is efficient.  As long as Apple does not get to arrogant they could influence the market to think the way they would like them to.  I would say so far they seem to be doing a pretty good job of it.  Apple’s iTunes represent sa good example of Apple and the market holding the record labels in check.  The record labels would love to dictate to Apple the  terms of music pricing, but due to the popularity of the iPod they are more or less to listen and adhere to Apple’s pricing guideline.  The music labels make money (I have been told by one of the music labels they get $.20 of the $.99).  The labels would probably like to own the whole channel, but it gets way beyond their core expertise.

At times technology companies get to seem so powerful that they could control their destinies by sheer will power, but at the end of the day it’s people who choose where they want to spend their dollars.  If the fruit looks rotten we don’t want to eat it.  The consumer ultimately decides if a company like Apple is providing an experience they want to buy and participate in.  It’s also a very American condition to build up the big guy and then tear him down when we feel their ego and success has become too big for their own good.  Why do we all hate the Yankee’s and Red Sox? At the end of the day I don;t think Apple is a threat to the industry or society, but just in case we should keep our eyes and ears open, because if we don’t , well maybe then they will.

Good Night and Good Luck

Hans Henrik Hoffmann August 10, 2011

2 thoughts on “Is Apple a threat?

  1. it is interesting because economic history and evidence suggests the market is not efficient in so far as a few oligopoly or one monopoly company control majority share in any given market; the same goes for technology. I think Apple learned a valuable lesson – a front assault against an entrenched opponent who maximized first mover advantage to the fullest was not a good strategy.

    So it shifted and focused on outflanking existing players focusing on areas where its user experience strengths and innovations can have the most impact, and create their own first mover advantage to engender their own monopoly just as Microsoft and IBM before they did. The question seems to be then what is the next platform or modality of technology that will appeal to users.

    What will be different but same enough marginal revolution of a product that will become the first mover advantage for the next innovative company. It seems to me that history demonstrates there can only be one. Highlander reference not intended but nonetheless appreciated.

    1. As far as futures are concerned it will be interesting – I think the only thing I can say is mobility will be a huge part of whatever shift takes place – the idea of a desktop, though relevant, will be a smaller part of the future – this to me is dictated by lifestyles.

      The other question is who – Apple is interesting in that it is a comeback story – but the next big player may just be starting up – in the end it is what makes our industry exciting.

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