Publisher’s Outlook

Deciphering Apple’s Success Involves a Simple Equation

By Rich Tehrani

A recent blog by Charlie Stross of Charlie’s Diary explains why he thinks Apple (News - Alert) is blocking Flash from many of its newer devices. In a nutshell, Flash allows cross-platform development, and Apple of course doesn’t want to see this being done. There are other cross-platform tools available for the iPhone (News - Alert), but let’s not go there at this moment.

Another interesting point in the article is a mention of HP buying Palm to compete with Apple via webOS. This is 100 percent correct. The world has changed. I wrote a while back about how Apple is destroying open computing with its walled-garden approach. Now that I have an iPad, I continue to assert this is the case.

But it gets worse for the competition because Apple has the same secret weapon in devices that Sony has in cameras. The proprietary memory stick is what allowed Sony to make more money per camera than the competition. If it chose to, it could either lower prices or add more innovation into the camera and sell more than the next guy. Memory stick technology really didn’t keep up with other devices, which means this advantage is not so great for Sony today.

However, Apple has a very good idea as to what each iPad/iPhone customer is worth over the life of the product due to App Store revenue -- all this and iTunes revenue to boot. So, now Apple can charge less for a device today because of the revenue it will make tomorrow. Moreover, Apple knows as it sells even more devices, the developers will come calling in larger numbers, which of course means more revenue per user.

Another concept in the above-mentioned post has to do with the PC era being at an end. I am not sure I agree with this idea, but what I do believe is Apple’s products continue to kick the rear out of all others. And the company has a head start, which is unbelievably scary for those who hope to keep computing ecosystems open.

Apple took a phone and made it bigger, and now it is eating into the general netbook market. It could tweak it again and turn into a laptop killer. Tweak it once more, and it is a desktop killer. Each time the company does this it keeps the ecosystem closed. Shut. No entry unless you are a massive computer company based in Cupertino, Calif. Or, of course, unless Apple says you are approved.

Face it. When it comes to computing devices, HP is screwed. Dell (News - Alert) as well. Sony may not stand a chance.

These new Apple devices have the most simple user interfaces and even leave important things like multitasking and Flash out. Still people can’t stop buying them.

For years, tech industry players survived by out-featuring each other. If your product has 100 features, mine had to have 120. This is obviously not the same methodology Apple is employing. It is simplifying, and the market is drooling.

In the VoIP space, there have been thousands of software failures. But one of the biggest successes is Skype (News - Alert), because the company used simplicity and a fun and light interface where others used arcane user name addresses and passed along unnecessary complexity.

When will other vendors learn? At this rate it may be too late. I understand that many people hope Google (News - Alert) will be the counterbalance, but Android to me is a poor copy of the iPhone OS.

We are entering a world of computing simplicity in which the number of partners in the walled garden ecosystem is commensurate with success. Few people saw this coming, but now that this new world order has been revealed, how will computing respond from the competitive threat Apple is now wielding on numerous industries?

Here is an excerpt from the above-mentioned story:

I’ve got a theory, and it’s this: Steve Jobs (News - Alert) believes he’s gambling Apple’s future – the future of a corporation with a market cap well over $200 billion – on an all-or-nothing push into a new market. HP [has] woken up and smelled the forest fire, two or three years late; Microsoft (News - Alert) [is] mired in a tar pit, unable to grasp that the inferno heading towards [it] is going to burn down the entire ecosystem in which [it exists]. IT

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