They are really asking to have the App Store regulated, aren’t they.
It’s not like Facebook is a competitor of theirs, and they’re already making plenty of cash and market share. Why stir the pot and give regulators even more ammunition?
I’ve just finished “After Steve” by Tripp Mickle and it strikes me as a good interpretation of the last 10 years at Apple strategically.
- Apple was pretty much dead when Steve Jobs came back but he rescued it through a string of great products (iMac, iPod, OSX Macs, iPhone and iPad)
- When Tim Cook succeeded Steve he knew he wasn’t a product person so Jony Ive took on that role
- Thanks to (mainly) the iPhone Apple stock started climbing and more and more investors started taking an interest in the company
- The iPhone 6 and 6S were the turning point - the 6 sending the stock through the roof and the 6S crashing it. As far as investors are concerned, the trouble with product companies are that you’re only one quarter away from disaster
- Ive struggled with his grief over losing Jobs, plus the weight of being the company figurehead without Jobs to shield him and gradually withdrew from Apple
- Acquiring Beats and launching Apple Music, plus the revenue from the ever growing App Store offered Tim Cook a way out, in the eyes of investors.
- Apple changed their strategy to become a services company that values recurring revenue rather than one reliant on continuing product innovation. Cook was quite explicit about this but it’s taken a few years for the shift from products company to services to become apparent.
> Apple changed their strategy to become a services company that values recurring revenue rather than one reliant on continuing product innovation.
Apple's hardware revenue, both in general and in specific categories such as iPhone, Mac, and iPad, is higher now than ever before. Plus now they have Watch, AirPods, etc.
Apple is pursuing "services" revenue simply because it can. It's a supplement for hardware revenue, not a replacement. It's easy money, because customers are locked in. The margins on "services" revenue are practically obscene.
IMO the jury is probably still out on whether or not this strategic change has been made and cemented into the culture.
At this scale these types of strategic changes play out on a large time horizon (decades) so from an external perspective it is difficult to know.
If Jobs were still CEO I'd expect him to be continually looking for the next breakthrough in consumer technology. Are the leaders at apple currently doing that? I don't know. I have heard that they may be investing into a self driving car play.
Also if Jobs were still CEO I wouldn't be surprised to have seen Apple behave as they have in the past 15 years (slurping up easy revenue like headphones, recurring revenue services) but as a visionary Jobs would concurrently be intensely focused on the future.
> Apple's hardware revenue, both in general and in specific categories such as iPhone, Mac, and iPad, is higher now than ever before. Plus now they have Watch, AirPods, etc.
If you look at the trajectory of iPhone sales (others devices barely matter), its reaching a peak. As are smartphone sales in general.
Last quarter, iPhone was 49% of Apple's total revenue, other devices 28%. Obviously iPhone is the biggest, but I wouldn't say 28% barely matters. That 28% is by itself bigger than most companies in the world.
> its reaching a peak
You could have said the same thing in, say, 2018. There are peaks and valleys. I'm not sure anyone can predict the future. In any case, hardware accounts for 77% of Apple's revenue currently.
>- When Tim Cook succeeded Steve he knew he wasn’t a product person so Jony Ive took on that role
I would argue in Steve's calculation, Tim Cook was suppose to settle any dispute between Ive and Scot Forstall. And Ive would stick to Industrial Product Design. While the Software would be from another Team of UI expert.
Instead Tim Cook gave every design decision to Ive. And Tim Cook "merged" those group together in the name of "collaboration". A few from HIG Group retired due to conflict with Ive. And we end up with iOS7.
>- Acquiring Beats and launching Apple Music, plus the revenue from the ever growing App Store offered Tim Cook a way out, in the eyes of investors.
I am pretty sure that is Eddy Cue's idea. Arguably the current Apple seems to be Eddy Cue's Apple. Apple Music, Apple TV+.
I think that at this point they know that in future, app store will be regulated. Thats why they have these offensive policies targeted towards specific companies. Earn now as much as possible from this, while its still possible.
Depending on which products get flagged as a core platform service by the European Commission, the digital markets act (DMA) may already be hitting them.
> It’s not like Facebook is a competitor of theirs
Apple's about to launch a new virtual reality headset in just over 2 months, that'll directly compete with Facebook.[0] Facebook's product, unlike pre-iPhone smartphones, is very decent, and Apple seems to target a high price, so the competition will likely be fierce.
2 months is hardly far into the future, and no Apple analyst would agree that it's irrelevant. People expect it to be bigger than Apple Watch, and to eventually supplant both computers and phones.
I do so love the wild ideas of tech market theorists. People really believe that they're going to put smart glasses on everyone's faces? That they can fit in all-day batteries? How exactly do we type into this head-mounted beast? Will the contrast be remotely acceptable for movies? I don't think these problems can be completely solved for the majority of users.
You'd do much better comparing them to smart watches and second screens. That's where they can actually work.
> "We've learned and struggled for a few years here figuring out how to make a decent phone," Ed Colligan apparently laughed about with John Markoff last Thursday morning. "PC guys are not going to just figure this out. They're not going to just walk in." [0]
You ask good questions! But you make the same mistake as you accuse the tech market theorists of: You seem to think you know what is (or isn't) going to happen, and what dimensions an unreleased product should be measured on.
Apple like Nintendo doesn't primarily market their products based on specs, or on expected use cases. Novel interfaces and uses are far more important to creating demand for a new product than meeting the spec and feature expectations of the market (or market watchers) before the product is announced.
They said 10 years, hence why I picked 1997 as the year specifically. The average person in 1997 could not comprehend the iPhone a mere ten years later, just as we today cannot comprehend 2032 in terms of VR/AR/XR glasses.
What I said was that VR gear won't replace smart phones in the next 10 years.
So it isn't about presence (after all, we have and have had VR/AR/XR equipment for quite some time now), but rather about relative ubiquity and obsolescence of what came before (in this case, replacing smart phones).
I might have a blind spot here (or lack imagination), but I think some of the reasons why I don't see these glasses making mobile phones obsolete in a 10 year time frame as a confluence of:
- people in the US by and large prefer not to wear things on their faces (is it seen as weak, esthetically unpleasing, sign of old age?)
- mobile phones (and smart watches, etc.) provide a good balance between mobility and utility
- if VR/AR/XR moves to contact lenses, the first point goes away but you will still need input mechanisms etc. and I doubt that contact lens formats will be able to supplant photographing/video and music playback which has become such a big use case for mobile phones.
Arguing against myself (somewhat): I think for VR/AR/XR to be truly successful, you need to feed the experience directly into the brain because that gives you high fidelity, high mobility, and removes the physical barriers that a contraption on your head brings. But that is even further out than 20 years, assuming humans don't retaliate against the idea of interpersonal communications that is so heavily mediated (read: manipulated) by a company (this happens in social media already).
People have said the exact same things about phones ("who'd want to carry around a device in their pocket everywhere? It'd be too heavy and annoying"). Really, it's simply a lack of imagination. People wear glasses and contacts all the time and no one bats an eye (metaphorically speaking at least).
It is going to be an interesting technical challenge to build contact lenses (or glasses) that, within the next 10 years:
- have enough compute to render the virtual artifacts
- are self-powered (maybe from electrical impulses from your body?)_
- have some way to get input
- can power your headphones
- have storage (or networking capability)
WITHOUT you having to carry another device on you (likely a smart watch or smart ring or smart phone).
Anyway, I think we're getting bogged down in boring device debate. The more interesting thing (which you allude to somewhat) is how weird / different the future virtual world will be. My money is on it being more Borg-like and less Matrix-like.
I think Apple's perspective is that they do what they want and tell and pay people (i.e., lobbyists, regulators, and politicians) to say that they don't want it regulated. They have unbelievable market power.
> It’s not like Facebook is a competitor of theirs
In a way, yes: both are competing for ad dollars in the iOS space.
If Facebook is forced to slow down or increase ad prices, those are dollars that may end up in Apple ad network, if the customer is targeting iOS users.
> Why stir the pot and give regulators even more ammunition?
Probably if they make more profit then X then the bosses on top get a GIANT bonus. If profits don't grow but are still profitable the bonus will be smaller, and we all know this guys want a bigger yacht or sport car each year. If in 5-10 years Apple will not be good for bonuses they management retire or move to the next place.
> It’s not like Facebook is a competitor of theirs
If Facebook is not a competitor then there's no issue is there? The regulator would step in if there were unfair competition. If they're not competing then there can't be any unfair competition.
They closed a loophole that Facebook was exploiting, this is clearly a grave injustice (also Facebook already has another loophole they can exploit that mostly covers it).
I'm convinced Zuck wakes up every morning screaming because he didn't start making a phone when Google/Apple did and just trusted that being a platform on top of every phone was more important, never realizing the foundations would eventually shift this much.
I think that one major difference is that the iPhone supported an "easy" way to do software updates, which was never a thing prior to smartphones.
Remember that the iPhone wasn't really that good at launch, either. No copy/paste, no App Store, etc. There is a scene in the movie Sex and the City, which was filmed pre-launch (right?). One character hands an iPhone to the other, who looks at it for a few seconds and says something along the lines of "I don't know how to use this" and hands it back.
It’s not like Facebook is a competitor of theirs, and they’re already making plenty of cash and market share. Why stir the pot and give regulators even more ammunition?