inqk.net

So John Gruber named Henry Blodget his Jackass of the Week because of a piece Blodget wrote at Silicon Alley Insider suggesting that Google will do to Apple in the ’10s what Microsoft did to Apple in the ’80s. That is, completely marginalise the company and develop and control the de facto operating system.

Gruber’s argues that the situation is different this time around and that, because the analogy to the 1980s is flawed, the argument is wrong.

I agree that Blodget fails to properly explain what the danger is to Apple. But I also think Gruber writes the argument off a little too quickly. Blodget’s not wrong because there is no analogy between now and then. (He’s also not wrong because the iPhone is selling. Windows is still selling and I don’t think there’s many people who would say Microsoft doesn’t have problems.)

If Blodget is wrong, it’s because he fails to explain exactly what Microsoft did right in the ’80s and what Apple did wrong. From the Silicon Alley Insider piece:

What was that mistake?

The insistence on selling fully integrated hardware and software devices, instead of focusing on low-cost, widely distributed software.

…

With Microsoft spraying the same software platform across dozens of hardware manufacturers, the world had a chance to standardize on a single, cheaper development platform.

This doesn’t fully explain the situation and begs the question as to why being able to standardize a single, cheaper development platform led to Microsoft’s success.

The reason low-cost, widely-distributed software was important to dominating the PC market was because at the time the PC market was essentially the business market. And what the business market cared about–more than usability, innovation or anything else–was the bottom line. If they cared about anything else it was applications, but, really, at first, applications weren’t what sold DOS; it was the price.

Of course, applications became important. Indeed, once Microsoft obtained ubiquity, it then set about maintaining that ubiquity through applications. This is important because, to coin a phrase, someone else will always build a cheaper mouse trap. You can’t dominate solely on price. You can get scale, but at the end of the day you need to be able to solve a problem that someone else can’t. You need to be the only mouse trap running Outlook.

Is this what’s going to happen this time around? If Google can get to ubiquity, then, yes, it might be able to cement itself Windows-style in people’s pockets. But that is a big if and, as Gruber is correct to note, it’s an if Blodget never explains (other than to appeal to a vague historical analogy).

The problem with the analogy is that this time around the market is not business, it’s the consumer. And while the consumer cares about price, it’s not the determining factor in the way that it is for an IT department. Sure, consumers care about price but if that’s the only thing they cared about, we’d all be carrying around Nokias.

Is there something that is a determining factor (or at least close enough)? It’s hard to see anything that unifies consumers in the same way that cost unifies business customers. In fact it’s tempting to conclude that such a task is impossible since consumers are not a homogeneous group. Some people are going to buy a product for its quality, some for its price, some for whether it matches their clothes. And it’s at this point that maybe (maybe) we’ve found it. Consumers want variety.

Consumers want different things and they want to be different. No product can ever completely satisfy that need if it only comes in one flavour on a family of devices from one manufacturer. It’s for this reason that Apple might (and you really do have to stress might) have a problem.

Is there anything Apple can do about this? (Gruber criticises Blodget for not being able to suggest what Apple should do.) Not really. Apple is a hardware manufacturer and in what consumer space does one hardware manufacturer dominate like a software company can? The answer is none and the reason is because software can be almost infinitely customised when it comes to the variations that are possible from one hardware manufacturer¹.

This is Apple’s problem. If the mobile phone world decides the game is being played on Android, then Apple risks being left behind. But if we get there, it’s not going to be via the same route as we did with PCs. It’s going to be because consumers don’t want an iPhone. They want choice.