Question: Is it Apple or is it Google ? The Answer is …
February 6, 2010 at 4:23 pm
(original link)
Over the last few months, much typing on the web has been expended on the exciting story of the hot competition between Apple and Google in smart phones.
I suspect much of this interest had to do with a partially imagined story of a once close friendship between Apple and Google, founded on their mutual enmity of Microsoft, now fractured on the rocks of competition and greed. Nevertheless, the two companies have very different businesses and looking at where they overlap is intriguing. Especially when trying to imagine where technology is evolving towards, and how it will affect medical professionals looking at their future investments.
As most readers are undoubtedly aware, much of the recent discussion in the blogosphere on this topic (at least before January 27) was about the rapid ascent of the Android platform. The emergent themes were that the open and mutable nature of the Android operating system, the entry of multiple handset makers and the absence of any restriction on software publishing will inevitably make Android the dominant smart phone platform of the future. The historical analogy given was desktop computing, where commodity hardware and a minimally restrictive operating system made Microsoft Windows the defacto standard, despite many obvious flaws.
But, it seems to me, that this analogy is flawed.
The future habitually confounds all predictions but here are some of my thoughts on this question.
1. There will be more Android devices in the future than iPhone OS devices. Lots more.
Android is based on the Linux kernel, which already powers an unimaginable range of computers and devices. Google’s contribution of a rich communication and user interface layer will mean that we will not only see Android in phones and tablet computers but also cars, thermostats, refrigerators and who-knows-what else. This is going to be a great for consumers.
But, it is not clear that the future ubiquity of Android means it will also be the defacto platform for smart phones. Many commentators have already made the arguments that Android phones will not be a unified platform, but rather splintered by a wide variety of hardware configurations, and that separately building the operating system and the devices will lead to unintended compromises.
What I want to emphasize, however, is that developing software for mobile devices is fundamentally different from developing desktop & enterprise applications. Specifically, mobile applications are much smaller and simpler to build. Most only take a few weeks of programmers’ time. This is already seen in numerous developers rapidly publishing Android versions of their iPhone apps.
What this means is that is that mobile computing is not going to be a winner-takes-all platform race. There are currently five major platforms: Symbian (Nokia), Blackberry (RIM), iPhone OS, Android and Windows Mobile. Maybe not all will survive into the next decade but it is difficult to imagine that there will only be one left.
2. Making devices is very profitable
If there was any doubt about this, just look at Apple most recent quarterly blow-out earnings. The number to look at is not the revenue of $15.7 billiion (more than double Google’s, by the way) but rather the gross margin of 40%. This is incredible.
Commodity hardware and open-source software mean that there will always be competitors entering with lower-priced devices. But do not forget that Apple also benefits from these same downward price pressures. In fact, Apple’s market power gets it lower prices on flash memory than its competitors, while it leverages open-source software development in its operating system kernel and web browser.
As proof of this principle, just look at the iPad starting price of $499. By designing its own CPU, Apple has further eliminated another supply cost, and by being profitable at this low price, Apple might just have knocked out the legs from the consumer netbook market. Also, while Google can enter the device business, Apple can also enter the advertising business. This is seen by Apple’s purchase of the mobile advertising company Quattro and by its plans to integrate innovative advertisement display directly into its mobile operating system.
3. Mobile computing is most powerful when it interfaces to web data
Tim O’Reilly, one of our most acute technology observers recently reviewed the Google Nexus One (http://radar.oreilly.com/2010/01/the-nexus-one-vs-iphone.html) and effectively suggested that it is not Apple vs Google but rather Apple vs the web. Meaning, in an information age, controlling the data (i.e. Google) is more important than controlling the device (Apple).
Here, prognosticating is murky as web-based services are evolving very rapidly. Google will clearly remain a dominant storehouse of data into the foreseeable future. But new companies will continue to arise with compelling data in their sectors, such as Yelp for local restaurant and vendor reviews, IMDb for movies, Twitter for web links and sentiment, not to mention medical databases such as Cochrane & PubMed or even EHR vendors with patient data.
But, if it is clear that cloud-based data is the killer app for mobile computing, then it is less clear that the means of its consumption is irrelevant. In fact, there always be room to innovate on the user interface – witness the iPhone. If we use the car analogy and consider cloud data to be the ubiquitous roads and highways, who would not want a nicer car to drive ?
Conclusion
We know that history does not quite repeat itself, it echoes. And, rather than reciting the story of Microsoft vs Apple, I suggest that we look beyond the simple analogy and consider that it may not be Apple vs Google in the future, but rather it will be both. I expect both companies will flourish and we the consumers will be the beneficiaries.
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Question: Is it Apple or is it Google ? The Answer is …
February 6, 2010 at 4:23 pm
(original link)
Over the last few months, much typing on the web has been expended on the exciting story of the hot competition between Apple and Google in smart phones.
I suspect much of this interest had to do with a partially imagined story of a once close friendship between Apple and Google, founded on their mutual enmity of Microsoft, now fractured on the rocks of competition and greed. Nevertheless, the two companies have very different businesses and looking at where they overlap is intriguing. Especially when trying to imagine where technology is evolving towards, and how it will affect medical professionals looking at their future investments.
As most readers are undoubtedly aware, much of the recent discussion in the blogosphere on this topic (at least before January 27) was about the rapid ascent of the Android platform. The emergent themes were that the open and mutable nature of the Android operating system, the entry of multiple handset makers and the absence of any restriction on software publishing will inevitably make Android the dominant smart phone platform of the future. The historical analogy given was desktop computing, where commodity hardware and a minimally restrictive operating system made Microsoft Windows the defacto standard, despite many obvious flaws.
But, it seems to me, that this analogy is flawed.
The future habitually confounds all predictions but here are some of my thoughts on this question.
1. There will be more Android devices in the future than iPhone OS devices. Lots more.
Android is based on the Linux kernel, which already powers an unimaginable range of computers and devices. Google’s contribution of a rich communication and user interface layer will mean that we will not only see Android in phones and tablet computers but also cars, thermostats, refrigerators and who-knows-what else. This is going to be a great for consumers.
But, it is not clear that the future ubiquity of Android means it will also be the defacto platform for smart phones. Many commentators have already made the arguments that Android phones will not be a unified platform, but rather splintered by a wide variety of hardware configurations, and that separately building the operating system and the devices will lead to unintended compromises.
What I want to emphasize, however, is that developing software for mobile devices is fundamentally different from developing desktop & enterprise applications. Specifically, mobile applications are much smaller and simpler to build. Most only take a few weeks of programmers’ time. This is already seen in numerous developers rapidly publishing Android versions of their iPhone apps.
What this means is that is that mobile computing is not going to be a winner-takes-all platform race. There are currently five major platforms: Symbian (Nokia), Blackberry (RIM), iPhone OS, Android and Windows Mobile. Maybe not all will survive into the next decade but it is difficult to imagine that there will only be one left.
2. Making devices is very profitable
If there was any doubt about this, just look at Apple most recent quarterly blow-out earnings. The number to look at is not the revenue of $15.7 billiion (more than double Google’s, by the way) but rather the gross margin of 40%. This is incredible.
Commodity hardware and open-source software mean that there will always be competitors entering with lower-priced devices. But do not forget that Apple also benefits from these same downward price pressures. In fact, Apple’s market power gets it lower prices on flash memory than its competitors, while it leverages open-source software development in its operating system kernel and web browser.
As proof of this principle, just look at the iPad starting price of $499. By designing its own CPU, Apple has further eliminated another supply cost, and by being profitable at this low price, Apple might just have knocked out the legs from the consumer netbook market. Also, while Google can enter the device business, Apple can also enter the advertising business. This is seen by Apple’s purchase of the mobile advertising company Quattro and by its plans to integrate innovative advertisement display directly into its mobile operating system.
3. Mobile computing is most powerful when it interfaces to web data
Tim O’Reilly, one of our most acute technology observers recently reviewed the Google Nexus One (http://radar.oreilly.com/2010/01/the-nexus-one-vs-iphone.html) and effectively suggested that it is not Apple vs Google but rather Apple vs the web. Meaning, in an information age, controlling the data (i.e. Google) is more important than controlling the device (Apple).
Here, prognosticating is murky as web-based services are evolving very rapidly. Google will clearly remain a dominant storehouse of data into the foreseeable future. But new companies will continue to arise with compelling data in their sectors, such as Yelp for local restaurant and vendor reviews, IMDb for movies, Twitter for web links and sentiment, not to mention medical databases such as Cochrane & PubMed or even EHR vendors with patient data.
But, if it is clear that cloud-based data is the killer app for mobile computing, then it is less clear that the means of its consumption is irrelevant. In fact, there always be room to innovate on the user interface – witness the iPhone. If we use the car analogy and consider cloud data to be the ubiquitous roads and highways, who would not want a nicer car to drive ?
Conclusion
We know that history does not quite repeat itself, it echoes. And, rather than reciting the story of Microsoft vs Apple, I suggest that we look beyond the simple analogy and consider that it may not be Apple vs Google in the future, but rather it will be both. I expect both companies will flourish and we the consumers will be the beneficiaries.
Like this:
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