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Closed is a recipe for failure

I love my iPod touch, love using Skype on it, love playing games on it, checking my Yahoo! and Gmail, using all kinds of apps on it. But I’m upset that there’s so much potential for the iPod/iPhone devices that Apple’s stopping the users from getting.

Google voice has been rejected (and Eric Schmidt stepped down from the Apple board), Skype’s not available in all markets, some apps are being censored and Spotify’s app will not be allowed – although Apple does have a chance to prove me wrong on that last one. So as great as the Apple App store is, Apple’s worried about competition to it’s other services rather than working on making the device the best it could be. Spotify will get on the G-Phone, as will Google voice. They’ll probably get on the Pre as well. Maybe even on the Blackberry. So Apple’s missing a trick here.

Apple did a great job revolutionising the way the music industry participates in digital music, they make great hard ware and operating systems, I haven’t done the figures but my guess is the revenue Apple might lose on iTunes and with carriers and revenue shares would probably be made up in the hardware margins and revenues in that stream. Not only that but there’s nothing stopping Apple from building competitive apps, changing iTunes so that it can compete with Spotify on a subscription model. But alas Apple chooses to shut apps out. I know there are partners to consider, but it’s not like Apple hasn’t put their teeth into partners for the sake of user experience before.

Mike Arrington wasn’t the first to dump the iPhone and at this rate he won’t be the last. Closed doesn’t win. People want access and will move to something that is more open every time. Apple will get taken out by whatever competitor will be open enough to provide the best experience. It might take years but unless Apple doesn’t change gears it will happen.

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  • Byekick

    Interesting stuff as always, but a couple of things worth questioning I think.

    You’ve implied that Schmidt’s resignation was related to the Google Voice decision – but surely it’s more to do with the fact that Android is a direct competitor and Google has decided to become an OS provider? What bits of Apple’s business would that leave him to participate in without a conflict of interest?

    Secondly, the Google Voice decision is less about Apple as far as I’ve read, more about AT&T but the jury is out on that one.

    No disagreement with the general criticism of App Store though – the lack of transparency is clearly causing a lot of understandable anger.

    I think the point Gruber makes about Apple’s culture of secrecy and paranoia is pretty much on the mark:
    http://daringfireball.net/linked/2009/08/03/anil-apple-secrecy

    Did you really cite Arrington as a credible witness..? Tsk.

  • Farhan Lalji

    Good points as always Andrew.

    The Schmidt stepping down is definitely due to more then the Goog voice app being rejected. The point that Apple and Google are moving into eachother’s areas without collarborating and making things better for the customer shows the closed mindedness of both.

    Arrington is getting a lot of press for his piece, techmeme and the Washington post and the like. I’m sure there are others. Sadly, Arrington’s just the most obvious example. Wasn’t proud of the Techcrunch link, appreciate the call out and the link to the Gruber post.

  • Farhan Lalji

    Also on the At&T point, by all accounts Apple’s calling the shots on the appstore. Apple has launched a number of services that aren’t available on the AT&T coverage, surely they could release the app in markets and make AT&T the bad guy if they wanted.

  • Riaz Kanani

    I think we can be pretty sure Google and Apple are actively talking – you can’t really have Google taking advantage of hidden API calls/bending app store rules without active collaboration between the two companies.

    Schmidt’s resignation does not change that.

    The real issue is Apple’s business model and it is not a new model that has just come about – this has been their model since forever – Macs are a closed environment; ipods the same. It should come as no surprise that they also want to heavily control the iphone as well.

    What is interesting is that the iphone is cannabalising ipod sales (see here: http://www.macnn.com/articles/09/07/22/ipod.being.cannibalized/). So Apple is doing to itself what the other mp3 players could never do.

  • Riaz Kanani

    In the mobile space, the question now is whether Google, Microsoft, Palm and Nokia are able to out innovate Apple. Over time being open definitely leads to greater innovation but it is the fast followers who often succeed over the innovators. Apple is no fast follower though – they are pure innovators so I think it likely that over time Apple will either need to be more open or be happy as a small niche cool player.

    In the past they have preferred to be the niche cool player.

  • Farhan Lalji

    Good point about the Mac model Riaz, think the mac model totally works for niche, but the rules and technology is catching up when it comes to mobile.

    The players have some pretty deep pockets (you missed out RIM as well) and they’re not going to stand by and watch Apple like the giant in Redmond has. Innovation and openness on mobile is going to be a different game as costs, prices and models change.

    Either way, fun to watch it all unfold.

  • http://www.fiftybyfifty.com/lifeoffarhan/2009/09/11/being-open-when-youre-apple/ Being open when you’re apple – Who is Farhan Lalji?

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