Apple shocked the world when they introduced the Mac. It was the perfect fusion of art and technology and unleashed the minds of a generation to user in the Personal Computer (PC) era. But that was just the problem. It was the PC era, not the Mac era. Although Apple built and led the initial personal computer market, they did not ultimately shape its destiny – Microsoft did. It seems like they might be at it again with iPhone. Except this time, there’s a new player in OS land – Google.
Apple is the best in the world at creating fantastic user experiences delivered via the seamless integration of hardware and software. The classic example of their prowess was with the introduction of the Mac. It was a great consumer proposition. The hardware, operating system, and core applications were all bundled together and had a consistent experience. This made it easy for the first generation of computer users to jump on board. Unfortunately for Apple, a number of players quickly dismantled this package, each taking pieces of the stack. Companies like Dell specialized in cheap production and delivery of PC’s using standards-based components. Microsoft dominated the Operating System. And because of this key position, they ultimately dominated the application market as they were the key bottleneck in distribution. Apple, of course, was left with a small market share in the PC market and, until the last decade, was struggling to reestablish its market position as a leader in computing.
Fast forward, Apple comes back. Led by Steve Jobs, they introduce a line of new Apple computers and quickly revitalize the brand. Perhaps more significantly, they quickly disrupt the music industry with their integrated ipod/itunes offering and now they are at it again with iPhone. Unfortunately, the very strategy that enabled the success of the iphone, an elegant vertically integrated package of hardware/os/apps, could now be their Achilles heel. The same dynamic that occurred in the PC market, is now occurring in the smartphone market – unbundling.
Google has steered the creation of a new, platform agnostic operating system – Android. Much like Microsoft did in the PC market, they are actively partnering with the major handset providers to help them create viable alternatives to the iPhone package. And, guess what, it’s starting to work. Today, Verizon announced Droid – their competitor with iPhone, following a slew of others that are quickly rushing to catch up.
My two cents is that, ultimately, a more open stack that allows competition at multiple layers (network, handset, os, applications) will win. And, assuming Android doesn’t see any emerging competition, I would bet that more phones will have Android OS than Apple in 2-3 years. To take it a step further, I ultimately think that the networks that currently provide voice and data will be cut out of the voice market by IP-based services like Google Voice. In short, if you believe in an ecosystem versus a monopoly, bet on Google.