Harry McCracken, “United’s In-Flight Video Streaming: More Evidence That Apple Won the App Wars”:
Much of the time, I’m an Android user myself, so I’m happy when something is available for Google’s operating system and sorry when it isn’t. But despite the fact that iOS’s market share is much smaller than that of Android, and has been for years, Apple devices are still nearly always first in line when a major company or hot startup has to decide where to allocate its development resources. That’s a dynamic that pundits keep telling us makes no sense — but it’s happening, and it’s an enormous competitive advantage for Apple. Sounds like a victory to me.
I largely agree with McCracken, but I’ll quibble over a word choice. Calling it an “app war” misses the key element that has given iOS such a strong position. iOS has a gazillion apps, available and easily installed from an app store. Android has a gazillion apps, available and easily installed from various app stores — and all Android phones from major brands come with the standard Google Play store pre-installed. If all you think about are “apps”, it does sound like Android ought to be on even ground, if not outright winning, because of its larger market share.
I’d say it’s an ecosystem war, not an app war — and that once you start thinking about it this way, it makes sense why iOS is ahead, and tends to be supported first (if not exclusively) by things like United’s new in-flight streaming service or Facebook Paper.
Hardware-wise, that there are only a handful of iPhone and iPad models to support makes things easier for developers to target them. Plus, every iOS device ships with a GPU that is now, or within the last two years once was, a top-of-the-line mobile GPU. You can argue (I wouldn’t, but clearly, many do) that from a consumer standpoint, Android’s plethora of device choices is a good thing. But from a third-party developer standpoint, the fewer the devices, the easier it is to support an entire platform. The sweet spot for making a platform appealing to developers is to have many users on a small number of devices. That’s iOS.
Software-wise, iOS and Android are only equivalent on the surface: UNIX-like operating systems under the hood, with a touchscreen UI presented to the user. But from a developer standpoint they’re not equivalent. Android does (or perhaps better put, allows) things iOS does not. But iOS has depth in some areas, like video playback and GPU accelerated animation, where Android is shallow. I’ve spoken to numerous developers from companies with streaming video services, and all of them agree that it is not just easier, but far easier, to support iOS than Android. Apple has decades of experience with video playback (and video editing — something else that’s far more work on Android) and graphics acceleration. iOS can draw a lineage in these regards back to the first versions of QuickTime (1992) and NeXTStep (1989).
And then there are user demographics. If you simply speak of market share — that platform A has 70 percent share, platform B has 25 percent share, so therefore platform A ought to be more appealing to developers than B — you’re implying that all users are equivalent. They’re not. As I wrote a year ago in a Branch thread on iOS/Android usage discrepancies (why do iOS users spend more money, install more apps, and browse the web more, even though they’re outnumbered):
The elephant in the room: people who choose iOS devices are better customers than people who choose Android. Or inverted: iOS (and iOS devices) are designed to attract better customers.
I think the reason many shy from stating this bluntly is that “better customers” sounds dangerously close to “better people”. But there’s no reason to tip-toe around this. There’s no hypocrisy in believing that all people are created equal, but all customers are not.
An example, pertaining aptly to United’s new in-flight service: Gogo’s in-flight wi-fi usage numbers from one year ago:
Apple devices are still reigning above the clouds, following the tablet trend with the iPad being the device of choice. Among all mobile devices being used to connect through Gogo, 84 percent carry Apple’s iOS operating system while 16 percent carry the Android operating system. If you look only at the smartphones our customers are using, the iPhone makes up 73 percent and all Android devices make up 26 percent, with Blackberry and Windows based devices each making up less than 1 percent of devices being used in air.
Assuming United’s in-flight wi-fi numbers are even vaguely in line with Gogo’s, iOS wins in terms of market share too. Apple offers a more appealing hardware platform (far fewer devices, all of them with high end performance); a richer, deeper software platform; and a more engaged, higher-spending customer base. It’s all of these factors in conjunction that make iOS the mobile platform with the strongest developer support. Android’s raw market share is indeed the best thing Android has going for it, developer-support-wise, but it’s nowhere near enough to overcome Apple’s remaining advantages.
It’s not fair to say that Apple is playing chess while Google, Samsung, Microsoft, and the rest are playing checkers. It’s more like they’re all playing chess, Apple is winning, but there’s a large contingent of the tech and investor commentariat who think the game is checkers and thus are deeply confused. ★
The most salient sentence in Yukari Kane’s piece for The New Yorker’s Currency blog earlier this month — “Why Is Apple Being So Nostalgic?” — is the last, her author credit:
The book’s title seems highly suggestive as to the book’s premise. Her piece for The New Yorker — which, I will emphasize, ran not in the magazine,1 but only on their website — runs along the same lines as you’d think from someone who apparently considers post-Jobs Apple a “Haunted Empire”. It’s been gnawing at me all month, like a piece of popcorn stuck between my teeth. Time to floss it out.
Regarding Apple’s recent celebratory commemoration of the original Macintosh’s 30th anniversary, Kane writes:
But, as beautifully as the video depicted how the company’s products have changed the world, it was also another reminder of how much Apple has changed since those days — not least because the old Apple, under Jobs, looked forward, not backward. “I think if you do something and it turns out pretty good, then you should go do something else wonderful, not dwell on it for too long,” he had famously said. “Just figure out what’s next.”
I agree with her that these promotions, the entire 30 Years of Mac campaign, probably would not have happened if Jobs were still around. Not that I pretend to know Jobs’s mind — I simply look at history. To me, 25 is a bigger anniversary than 30, an even quarter century. If ever there had been a time for Apple to celebrate a Macintosh anniversary, it would have been 2009, the 25th. They didn’t. And the biggest difference between Apple in 2009 and Apple in 2014 is that Steve Jobs is gone.
But I think this is a case, maybe the best example so far, of a situation where Apple has done something very differently than if Jobs were still here, and that the company is better off for it. Cook, speaking at Jobs’s memorial service on Apple’s campus back in 2011, said:
“Other than his family, Apple would be his finest creation. He thought about Apple until his last day, and among his last advice he had for me and for all of you was to never ask what he would do. “Just do what’s right,” he said. He said he saw Disney paralyzed after Walt Disney’s passing as everyone spent all of their time thinking and talking about what Walt would want, and he did not want this to occur at Apple.
I love the whole 30 Years of Mac celebration, and I think it’s very right. Only part of the campaign is about looking back, though. The “1.24.14” 90-second short film, which has received more attention than any other aspect of the campaign, is about what people all around the world are doing with Apple products today.
Reasonable people can certainly disagree over the merits of just about any advertising. Most aspects of advertising, particularly a pure branding exercise like this one, are subjective. If Kane wants to argue that this campaign is more wallowing in the past than celebrating the present, I can only say I disagree, not that she’s wrong.
But her piece then pivots, oddly:
When Jobs was ousted in 1985, the impact of his absence on Apple’s business was not immediately obvious. After a slow start, Macintosh sales began rising. Two years after Jobs left, Apple’s annual sales had almost doubled compared to three years earlier, and its gross profit margin was an astonishing fifty-one per cent. Outside appearances suggested that Apple hadn’t missed a beat.
Inside Apple, employees knew differently. Something had changed. “I was let down when Steve left,” Steve Scheier, a marketing manager at Apple from 1982 to 1991, recalled. “The middle managers, the directors, and the vice presidents kept the spirit alive for a long time without his infusion, but eventually you start hiring people you shouldn’t hire. You start making mistakes you shouldn’t have made.” Scheier told me that he eventually grew tired and left. The company had “become more of a business and less of a crusade.”
Apple began celebrating its past glories with commemorative T-shirts, a garden of Macintosh sculptures, and a display of an old Apple I in the cafeteria. Engineers obsessed about getting credited in every program that was released. By the time Jobs returned, twelve years later, to rescue Apple from near bankruptcy, the company was unrecognizable.
The insinuation is clear: old Apple celebrated past accomplishments while losing its way in the (then) present; today’s Apple celebrating past accomplishments is therefore a sign that the pattern is repeating.
I don’t buy it. Apple in 1985 was led by an executive team that wanted Jobs out of the company. They fired him. Apple today is led by an executive team that admired and learned from him. I believe that Apple’s leaders are asking “What is right?”, not “What would Steve have done?” as they make decisions. But their answer to that question, “What is right?”, is informed by their experience working with him. There is an Apple Way of doing things, and to date, that hasn’t changed much since 2011.
Kane continues (emphasis mine, not hers):
So what about now? Apple’s supporters point to the company’s billions of dollars in quarterly profit and its tens of billions in revenue as proof that it continues to thrive. But Apple’s employees again know differently, despite the executive team’s best efforts to preserve Jobs’s legacy. People who shouldn’t be hired are being hired (like Apple’s former retail chief, John Browett, who tried to incorporate big-box-retailer sensibilities into Apple’s refined store experience).
Here Kane starts with a solid point. Apple’s still-growing profits and revenue prove nothing regarding Apple’s long-term prospects under the current leadership. RIM and Nokia were flying high in 2007. (Headline from October 2007 in The New York Times: “Nokia Profit Soars as Market Share Nears 40%”.) Sales of established product lines are lagging indicators, not leading indicators.
But then comes, “But Apple’s employees know differently”. That’s a striking, damning claim. I see no other way to read it than to mean that the mood among Apple’s rank and file employees is that the company does not continue to thrive. If she has interviews — anonymous, to be sure, if they’re with current or even recent employees — to back this up, she hasn’t shared them here. (This New Yorker piece is not an excerpt from her book.) There’s not a single quote to back up this contention. Perhaps we have to wait for her book, but that sentence is not backed in this article, and, for what it’s worth, does not jibe with what I’ve heard from people I know within the company. My sense of the pulse within the company is more along the lines of caged-tiger frustration, a sort of collective We loved Steve and miss him, but fuck you if you think this was a one-man show, if the whole thing was held together by a single lynchpin. I sense the opposite of complacency, a You’ll see, just wait chip on their shoulders — undergirded by a sense of responsibility, that Jobs’s greatest creation, and his true legacy, was not the products but the company itself.2 If Apple ceases to be Apple, if it fades to mediocrity and eventual irrelevance, it should not be seen as proof of Jobs’s indispensability so much as a failure on Jobs’s part to create an organization, culture, and tradition that could outlast him.
Browett is an interesting example. By all accounts, he was a bad hire, and responsibility for that falls on Cook. But Cook sacked him after just 10 months on the job, and after a lengthy search, replaced him with the highly-regarded Burberry CEO Angela Ahrendts. What’s the expectation for Tim Cook? To never make a mistake? Or, instead, to make as few mistakes as possible, and to recognize the ones he does make, and address them? If the bar is perfection — never making a bad executive hire — then Steve Jobs was a failure as well. Here’s a report — by no other than Yukari Kane — from 2010 for the WSJ: “iPhone Executive Is Out at Apple”:
The Apple Inc. executive in charge of the iPhone has left the company following a string of stumbles with the device, and what people familiar with the situation said was a falling out with Chief Executive Steve Jobs.
Mark Papermaster, Apple’s senior vice president for mobile devices, has left the Cupertino, Calif., company, an Apple spokesman said Saturday, declining to provide further details. Mr. Papermaster, 49 years old, had joined Apple just 15 months ago from International Business Machines Corp.
Back to Kane’s piece from The New Yorker:
People who shouldn’t leave are leaving, or, in the case of the mobile-software executive Scott Forstall, being fired.
Mistakes, in turn, are being made: Apple Maps was a fiasco, and ads, like the company’s short-lived Genius ads and last summer’s self-absorbed manifesto ad, have been mediocre.
In one sentence, Kane says it was a mistake to fire Scott Forstall. In the very next sentence, she calls the launch of Apple Maps “a fiasco”. Here’s the thing: Apple Maps was under Forstall’s purview — Forstall was the DRI, in Apple management parlance. Adam Lashinsky reported for Forbes that one of the reasons for Forstall’s ouster is that he refused to sign the company’s letter apologizing for the quality of Apple Maps. Kane can argue that Forstall should not have been fired. She can argue that the launch of Apple Maps was a firing offense. But she can’t have it both ways.
Mistakes being made are not new to Apple under Tim Cook. Steve Jobs was far from perfect. The iPhone 4 “Antennagate” in 2010. The $200 price drop for the original iPhone, just months after it launched. The 2005 iPod Nano, whose screen was far too easily scratched. The cracks in the G4 Cube casing. Brushed Metal. The Flower Power and Dalmatian iMacs.
As for Apple’s advertising — again, judging an ad is clearly subjective — I would argue that it has been outstanding. The “Misunderstood” holiday spot was one of the best Apple’s ever done. Browsing their YouTube channel, I see nothing but great work. Last year’s short-lived “Genius” campaign wasn’t great, but it wasn’t that bad, and it didn’t run for long.
(A few of these spots have been pulled from Apple’s YouTube channel: Misunderstood, the iPad Air/Mini piano duet ad, the pencil ad used to introduce the iPad Air. All good ads, but I seemingly can’t link to them any longer.)
Apple’s latest version of its mobile operating system, iOS 7, looks pretty but is full of bugs and flaws. As for innovation, the last time Apple created something that was truly great was the original iPad, when Jobs was still alive.
Ah, the i word.
Kane doesn’t say that the original iPad was the last time Apple created something truly new (which I’d agree with), but “truly great”. Consider the products Apple has released since then. The iPad Air is so much smaller and thinner than all preceding iPads that it feels closer in size to the iPad Mini than to the iPad 3/4, and makes the “truly great” original iPad look like a brick. The iPad Mini with Retina Display has the same A7 system-on-a-chip and performance as the iPad Air. What other company has a tablet with top-of-the-line specs and 10-hour battery life with a screen size smaller than 8 inches? (Spoiler: no one.) The 2012 13-inch MacBook Air got just 7 hours of battery life; today’s 13-inch MacBook Air gets 12 hours. The iPhone 5S camera is so good that Apple used it, exclusively, to shoot the footage for the “1.24.14” video that Kane herself argues, at the outset of her piece, Apple should have run as a Super Bowl commercial. A cell phone camera you can use to shoot Super Bowl commercial-quality video. The original iPhone didn’t even shoot video, period; today Apple can shoot a professional-caliber commercial using the iPhone 5S. None of this counts as “innovation” because apparently the only thing that counts as innovation is entirely new product categories.
But even when Apple enters new product categories, they don’t invent the categories themselves. The iPad wasn’t the first tablet. The iPhone wasn’t the first smartphone or touchscreen handheld device. The iPod wasn’t the first digital music player. The Macintosh, the original one, whose 30-year anniversary ostensibly prompted Kane’s piece (surely it wasn’t prompted by the imminent arrival of her book next month), was not the first computer with a windows-icons-menus-pointer “WIMP” graphical user interface.
Apple’s initial entries in new product categories are often — if not always — decried by some critics as not innovative. Look no further than the product Kane now holds up as Apple’s last innovation, 2010’s original iPad, which was widely downplayed as “just a big iPhone” when it debuted. (Slashdot founder Rob Malda, on the original iPod in 2001: “No wireless. Less space than a nomad. Lame.” We can play this game all night.)
Although the company’s C.E.O., Tim Cook, insists otherwise, Apple seems more eager to talk about the past than about the future. Even when it refers to the future, it is more intent on showing consumers how it hasn’t changed rather than how it is evolving. The thirtieth anniversary of the Macintosh — and the “1984” ad — is not just commemorative. It is a reminder of what Apple has stopped being.
This strikes me as simply bizarre, given that Tim Cook has reiterated, both on last month’s quarterly finance analyst call and in a subsequent interview with the WSJ, that Apple is poised to enter “new product categories” — plural — this year. If the premise of Kane’s book matches the tone of her New Yorker piece, it might have a very short shelf life.
I see three ways to judge Apple:
The first is — I reiterate — mostly subjective. I think Apple’s advertising has never been better, but there’s no way to back that up with facts. Those who want to disagree will disagree. In terms of retail, Apple leads the entire industry, by a long shot, in revenue per square foot. Hiring Angela Ahrendts has been widely hailed as one of the best executive signings in years.
The second is something you can judge annually, and I’d say the scorecard, post-Jobs, is very strong. The iPhone, iPad, MacBook, iMac, and Mac Pro lineups are all much improved over where things stood in 2011.
The third — big-bet new products — is admittedly the most important to Apple’s long-term success, but is something you cannot judge annually. Historically, those sorts of big new things have only come two or three times per decade. By all accounts, Steve Jobs had an extraordinary gift for delivering those sort of products. The single biggest question facing Apple, post-Jobs, is whether the company can deliver such products without him. I’m not arguing that they have done so, nor am I arguing that they have proven anything in this regard. We don’t know.
It is absolutely reasonable to hold that Apple might become an incremental-only company without Steve Jobs. It is not reasonable, however, to hold that there are external signs they’ve already entered this sort of state. Consider this sentence from Kane’s piece, quoted above:
Apple’s latest version of its mobile operating system, iOS 7, looks pretty but is full of bugs and flaws.
I called the second category of innovation “big bets” deliberately. They’re about taking chances. I think the iPad Air and iPad Mini are clear signs of incremental innovation, but they’re not big bets — given that the iPad was already popular, making it smaller, thinner, lighter, and faster was not taking a chance. Introducing a tablet computer in the first place was taking a chance. Entering the mobile phone industry in the first place was taking a chance.
iOS 7 is the best sign so far that Apple remains willing to take chances. They took a wildly popular platform, still growing in popularity at a steep rate, and overhauled every single aspect of its visual design and several aspects of its conceptual design in under 10 months. (The company has been unusually open about the fact that work on iOS 7 commenced only after the executive shakeup that ousted Scott Forstall and put Jony Ive in charge of all design, hardware and software.)
iOS 7 is buggier than most previous iOS releases. (Version 7.1, currently in beta testing but poised to ship soon, is much improved in this regard, in my experience.) But what’s the alternative? How could Apple have done better in Kane’s eyes? Should they have waited another year to unveil this new design? It was rocky because they did a lot in a short period of time. It was aggressive and bold.
The argument that iOS 7 would have been less buggy under Jobs’s leadership holds no water. The problem isn’t that Apple’s engineers aren’t working hard enough, or suffering from poor management. The problem is that Apple tried to do too much too quickly. Seems to me that’s the sort of thing Steve Jobs pushed for all the time. Mac OS X 10.0 was downright awful; 10.1 and 10.2 were improvements but still bad. (I would argue that the problem isn’t that 7.0 was so buggy in the first place, but rather that 7.1 is taking so long to ship.)
Dismissing iOS 7 in an argument about post-Jobs Apple and innovation is a “Do you still hit your wife?” no-win setup. Apple moved aggressively and Kane dismisses the effort for the inevitable bugs and shortcomings. But the alternative — staying with the previous iOS design for another year while allowing the iOS 7 design to mature behind closed doors — would have opened Apple to accusations that they’re standing still.
The simple truth, regarding Apple’s continuing ability to deliver breakthrough new products, is that we have to wait.
My sense is, we may not have to wait much longer. ★
As this piece makes clear, Kane’s piece strikes me as falling far beneath the impeccably high standards of The New Yorker. That it ran online but not in print is telling, and reminiscent of Timothy Wu’s similarly problematic piece a year ago. ↩
Or better said, companies, plural, because the same holds true for Pixar. Pixar is greater than the sum of its movies. ↩
At WWDC in 1997, Steve Jobs, having just returned to Apple, held a wide-open Q&A session. There’s video — albeit low-quality (VHS transfer?) — on YouTube. It’s a remarkable session, showing Jobs at his improvisational best. But more importantly, the philosophies and strategies Jobs expressed correctly forecast everything Apple went on to do under his leadership, and how the company continues to work today. In short, he’s remarkably open and honest — and prescient.
My quip today that Google is beginning to remind me of pre-NeXT Apple in the ’90s — announcing more cool R&D prototypes than they release actual cool products — brought to mind one of the segments from this session. There’s a five-minute clip of just this segment here.
It starts with a testy remark from an attendee upset about Apple having killed OpenDoc. Attendee: “It’s sad and clear that on several counts what you’ve discussed, you don’t know what you’re talking about.” Jobs deftly laughs off the insult, and goes on to explain that he has no doubt that OpenDoc contains some great technology — that it allowed for things no other technology could accomplish. But that that alone was not enough.
Then he says this:
One of the things I’ve always found is that you’ve got to start with the customer experience and work backwards to the technology. You can’t start with the technology and try to figure out where you’re going to try to sell it. And I’ve made this mistake probably more than anybody else in this room. And I got the scar tissue to prove it.
If it wasn’t obvious then, it’s certainly obvious in hindsight that NeXT itself was the biggest of those scars. Amazing technology — an operating system and developer frameworks that debuted in 1988 and today serve as the foundation for almost the entirety of Apple’s product line. But NeXT never turned that technology into a successful product. Without a focus on products, new technologies are a crapshoot.
That’s why Jobs dismantled Apple’s pure R&D department, the Advanced Technology Group. The work ATG had done wasn’t all thrown away, but what continued was product-focused rather than technology-focused. Starting with the product and working backwards to the technology instead of the other way around has made all the difference in the world for Apple.
Microsoft, Intel, IBM, Google, and numerous other companies all outspend Apple on “R&D” today. The WSJ reported that between 2004 and 2007, Nokia outspent Apple on R&D by a factor of 9 ($22.2 billion vs. $2.5 billion). This discrepancy leads some to the conclusion that Apple underspends on research and development. I would argue instead that it shows that Apple is far more focused than any of its rivals.
What is focus? Again, we return to Jobs, on stage at WWDC, 17 years ago. The very first question in the session was, simply, “What about OpenDoc?”
What about OpenDoc? What about it? [Audience laughs.] It’s dead, right? Let me say something that’s sort of generic. I know some of you spent a lot of time working on stuff that we put a bullet in the head of. I apologize. I feel your pain. But Apple suffered for several years from lousy engineering management. I have to say it. And there were people that were going off in 18 different directions doing arguably interesting things in each one of them. Good engineers — lousy management. And what happened was you look at the farm that’s been created with all these different animals going in different directions and it doesn’t add up. The total is less than the sum of the parts.
And so we had to decide, what are the fundamental directions we’re going in? And what makes sense and what doesn’t? And there were a bunch of things that didn’t. And microcosmically they might have made sense; macrocosmically they made no sense. And you know, the hardest thing is… you think about focusing, right? You think, “Well, focusing is saying yes”. No, focusing is about saying no. Focusing is about saying no. And you’ve got to say no, no, no. When you say no, you piss off people.