Mobile Software – and Apple – Are at a Turning Point

I think Kenton is right...Why shouldn't we expect a zillion Android apps?

I haven't researched this extensively but anecdotally, it appears that while there are definitely great stories of iPhone app developers hitting it big financially, it's not a guarantee and not the norm. 

I completely agree with your point about numbers. However, I'm afraid that we're likely to see 100,000 apps for Android just as we do for iPhone. For the manufacturers and the carriers it's all about numbers and I don't think we'll ever get away from that.

Can we drop the Apple's 100,000 apps vs. Google's 10,000 (or 15K, as stated in the article) argument?  Is anyone really going to use 100,000 apps?  Or even 10,000 for that matter?  Do we really need 27 "Find a restaurant in a strange city" apps?  I think 2 or 3 would suffice.  Every article about Android vs. the iPhone that I've read (other than specs on the Droid) in the last two months references this supposed disparity.  You obviously have to take into account the amount of time the iPhone has been around compared to the amount of time the Droid has.  Variety may be the spice of life, but c'mon!

I think David's central argument about developer satisfaction is the key--  developers have seen how lucrative it can be to design apps for Apple but they also have to suffer the indignities of the "joke of a process" those apps go through to get vetted and approved.  I'm hoping Google lures away some good developers and we get some killer apps/good, healthy competition, I just hope we don't end up with 100,000 for the Android as well.  Who has the time or desire to wade through that many apps looking for gold?

The App thing is really in its infancy, and I agree that the thoughts mentioned reflect a true inflection point for Apple and the industry, whatever the "industry" really is at this point.

So, we have the Apple App store, the Blackberry App store, the Palm Pre App store, the Android App process and, probably, more App stores than I've mentioned.  There also are third-party software developers who sell mobile applications installed the old-fashioned way on some phones, directly from a mobile browser.

The Palm store has been bashed, but there is an underground Palm Apps area for Apps in development, and the collection there is pretty robust.  (I assume there is such a stealth hideout for the others, also).  Many of those applications are the same as the iPhone applications.

Is there a point where App exlusivity becomes paramount?  Not for the sake of the integrety of the system, but as a way to attract users--an App only on Sprint's Blackberry, for instance?  I guess I'm wondering if there will be regret that the Apps weren't choked to build value for the carriers and the equipment providers.

Like it or not, Apple will be forced to be less restrictive because so many other platforms will feature Apps that could make the iPhone less appealing if they weren't on the iPhone.  And, gettiing on the iPhone is kind of like making it in New York at this point.

The best thing for Apple's competitors (which is everybody, really, even AT&T) would be to lock down exclusive Apps much the way they lock down exclusive handsets.  From the developer standpoint, the entire phone industry has grown in value on the backs of developers, who really have profited little.

Thanks for weighing in David.

I think your points are important but largely irrelevant to my premise. Perhaps I need to be more clear.

The iPhone today essentially has no equal. As you point out, virtually every user, with very few exceptions, loves her or his iPhone. Just like every user in 1987 loved thier Macintosh and their was no equal in the market. As all the so-called IBM PC-compatible users were slogging through c prompts, we Mac users were pointing and clicking; happily paying a premium for the Mac.

Then slowly, quietly, but very powerfully, things changed. An entire ecosystem emerged around the Wintel platform and three things happend:

1. The pace of innovation accelerated dramatically as hardware and software developers flocked to Wintel;

2. The Wintel crowd significantly closed the gap between it and the Mac;

3. Costs declined at a rapid pace as Wintel volumes exploded.

The Mac remained the better product, but because the gap between the two platforms closed so dramatically and prices remained substantially lower, users migrated to Wintel and overwhelmed the Mac. Wintel became a monopoly and Apple struggled mightily.

Apple could have reversed its course at the time by opening up the Mac...licensing the OS...allowing other companies to build Mac-compatible products. But Apple chose not to do that...largely imo because it wanted to maintain control and the perceived higher gross margins that came with that control.

The irony is that both Intel and Microsoft achieved much (much) higher profitability than Apple ever did.

The key to Wintel's dominance was the 'insider's game amongst a few' as you call it-- specifically the developer community. Microsoft understood this better than anybody. Without a loyal and robust developer base and related ecosystem, Wintel would have failed.

Now very importantly, there are differences between PC's and mobile software. Binary compatibility to share spreadsheets and word processors is a non-issue. The Web neutralizes the potential for historical monopolies as we knew them in the PC world. But there are similarities including cost, volume, application availability and ecosystems.

In my view, if Apple ignores the similarities and does nothing to change its behavior it will see a similar fate. The wildcard as I pointed out is Jobs. Perhaps he can keep pulling innovation rabbits out of Apple's hat so frequently that Google and the Android ecosystem won't be able to keep up.

I'm not betting on that.

I think that Apples' application approval process sucks and at times has been a huge embarrassment to Apple.  At the same time - I don't think it matters one iota from a business perspective.

Is the average iTouch or iPhone user:

• Upset that a certain application is not on this platform?
• Aware that a certain application has been denied access to this platform?
• Aware that there is an approval process for applications?

I would venture that the answer is "no" to all those questions.  The large majority is happy.  I have had users complain about Blackberries, Palms and every device that has come in recent years.  Complaints about the iPhone - not many, not many at all.

The complaints about the Apple application process are an insider's game amongst a few.

Should Apple fix it? Of course.

Will it doom the iPhone? Hard to see that happening.

Have to wait and see if Apple would care. It is definite a problem, not so sure if they would think it is a big issue for them. Nevertheless, they can not ignore the fact that recently Google has deployed many great OPEN API like Google Wave & Google Friend Connect. With what Google has & what they can do, Apple might want to think ahead.

David I think your point about the history of Apple is well taken, and it's a point I've made myself. When the Apple II came out, MS/Intel was not a competitor for Apple, and they could write the rules, and people had to play by them.

But MS/Intel had a different game, and a different rule book. And more people wanted to play their game than Apple's, because they liked the rules better - not because the tech was better.

Apple needs to remember the past, or they may repeat it.

Steve

Time will tell Michael but part of the fun is predicting the future, isn't it? 

Sorry if you feel I'm bashing Apple; that's really not my intent as I do have great respect for the company's accomplishments. I just don't have much to add about how great Apple's products are and how innovative the company is-- I think that's been well-covered. 

My interest in these posts is the competitive structure of the industry. I'm trying to squint through what's happening in the market and understand how Apple's historical behavior might help us see the future. Microsoft and Intel's more open ecosystem catapulted those company's way past Apple in the 1990s. Very few people predicted that in the 1980's.

What everyone misunderstood (in say 1989) is that while Apple had more integrated products that were clearly better, Microsoft's "good enough" UI (which was horrible btw) and Intel's lower cost manufacturing base allowed these companies to create a virtual monopoly in computing. The key to the monopoly was the ecosystem and it crushed Apple.

I see similar patterns with iPhone. However as I've stated in the past, had Jobs been allowed to stay on as CEO, perhaps history would be written differently.

As for developers; they will flock to the intersection of innovation and profits. And if Android can create function comparable to iPhone (which it looks like it's doing) and the ecosystem throws off more opportunity than Apple's (which it could do because it's less restrictive) then I don't see why more developers wouldn't be attracted to Android over the next decade.

I'm interested in your thoughts on what I'm missing as I'm sure there's room for improvement to my scenario.