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Apple 2011 = Microsoft ’97

Brilliant comment from “Chucky” on a post from from Michael Tsai:

Microsoft in 1997 had a very specific corporate strategy. They had a temporary situation of great market leverage. And rather than concentrating on making better products for their users, they began to concentrate on two objectives:

1 Using their leverage to avoid the rise of middle-wear.

2 Using their leverage to grab a rent-seeking slice of the commerce their users did out on the internet.

Microsoft in 1997 was willing to be incredibly evasive and disingenuous in its pursuit of those goals.

Does any of this remind you of Apple in 2011 in any way?

Apple has steadfastly avoided the creation of middleware on iOS – stuff like Flash, which acts as a layer between the OS and the application. And it is now using its leverage over the platform to grab a slice of all the commerce people do through apps.

Who’d have thought that Steve Jobs would have stuck so closely to the playbook written by Bill Gates?

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  • http://twitter.com/Reiserechner Stephan

    So what should they do in your opinion? Currently publishers pay nothing to Apple by providing free apps and using external payments for subscriptions. Do you think Microsoft would allow this on the XBOX? Or Sony on the PS3?

    Also, the middleware thing (especially flash) is more about the consumer experience and independence. Apple never wants to depend on other player’s timelines again…

  • http://twitter.com/fmacgregor Fearghas MacGregor

    I think this is a good point, but it differs in one fairly key area, that of the consumer. For MS, the consumer’s satisfaction or pleasure wasn’t the main goal, it wasn’t much of a consideration. It was their underlying gain, as a corporation. And in the short term, that can work, but it won’t stay true in the long run.

    With Apple, they customer is still key to decisions. Sure, some stuff is probably done just for cash, and just to demonstrate their control, but I think that for them, “making better products for their users” doesn’t stop at making a better iPhone, it’s about making things smoother, removing the friction, and that’s perhaps what the subscription things will do.

    I think the middleware argument might be a little off-target, if only because running middleware on an iPhone would ruin the experience, and that’s what’s key to Apple. It’s the whole package that they sell, not just the software. It’s pretty easy to make an app for an iPhone, but it stops the generic (and thus, lowest-common-denominator) stuff from ruining the experience. Because when it screws up, people blame Apple.

    Apple is in control, but it is at least open about it – we can see the rules, and an app I might create in the bedroom with a subscription is held to the same standards, and also the same rules as Amazon. But Amazon are also held to the same rules as me, and that’s pretty cool, I think.

    It’ll be interesting to see how this thing plays out, when we actually see the impact of it on the end user.

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  • http://www.technovia.co.uk Ian Betteridge

    Funnily enough, I wrote something about the independence issue recently (as yet unpublished). I think that with 10 billion apps downloaded, it’s now got to the point when it’s a red herring: the adoption of Cocoa Touch is so widespread amongst developers that the chances of them changing horse and using Flash (or A N Other piece of middleware) is pretty low. What keeping Flash off-platform does, of course, is keep control over payment – and allows Apple to retain it’s “30% of everything, ta very much” approach.

    The analogy with XBox and PS3 doesn’t stick: Neither of them are publishing platforms in the same way the iPad is. And pointing at Bad Things Other Poeple Do as a justification for A Bad Thing That Apple Does isn’t really all that compelling as a moral argument :)

  • http://www.technovia.co.uk Ian Betteridge

    “For MS, the consumer’s satisfaction or pleasure wasn’t the main goal, it wasn’t much of a consideration.”

    That actually wasn’t true. What you’re forgetting is that for MS in 97, the end user wasn’t the consumer: their customers were, in fact, IT departments in corporates and systems integrators like Dell, Compaq, etc. And MS was VERY good at giving them what they wanted. The problem is that “what they wanted” wasn’t the same as “what end users wanted”.

    “Apple is in control, but it is at least open about it – we can see the rules”

    But that’s the problem: we can’t actually see the rules. Take, for example, whether the rules that they’re applying to subscriptions also applies to single-purchast content, like books. Read the rules, and it doesn’t. But Apple has made clear that as far as it’s interpretation goes, it does. And Apple’s interpretation of its rules changes, largely to suit Apple and its desire to make money.

  • http://www.technovia.co.uk Ian Betteridge

    “So what should they do in your opinion?”

    Sorry, realised I hadn’t answer this bit. :)

    First, they could simply forget the idea of making content creators use in-app purchasing in every instance. Allow devleopers to opt out. Many wouldn’t, because in-app purchasing is a great, friction-free system that will increase sales. But that should be publishers choice, not Apple’s.

    Second, if they are going to insist on in-app purchasing being used, lower the 30% to something more reasonable. For 30%, developers get quite a bit. Most importantly, they get their apps run through a comprehensive system of quality assurange. Content developers get nothing of the sort – Apple isn’t proof reading content (although it may choose to censor it – another unasnwered question). A credit card company charges a big merchant something in the region of 0.3%. Apple could charge 3% and still make a boatload of free cash, and publishers would be much happier.

  • Anonymous

    Just a quick note… Isn’t that the same percentage that Amazon is arranging with the publishers?

    Google’s announcement at 10% is all well and good but they don’t actually have an in-app subscription mechanism in place…

  • http://www.technovia.co.uk Ian Betteridge

    No one sane – not even in publishing! :) – thinks that Kindle subscriptions are the way forward. The split on books is 70/30 in favour of publishers, although pubishers have to soak up any Whispernet delivery charges (a few cents, and not afaik charged on deliveries to apps or over WiFi to Kindles)

    In-app purchasing is coming in the next couple of months – but like with all Android market stuff, it’s not exclusive. You don’t have to use it.

  • http://profiles.yahoo.com/u/IWQ7HIPZ4UJ5YWJB7JSYZ7QXKM watchdog

    “And Apple’s interpretation of its rules changes, largely to suit Apple and its desire to make money.”

    See Kontra at counternotions. The rules change because we are in a rapidly changing new frontier. Apple (and others) can’t foresee everything that’s going to happen. Phil Schiller said this in 2009 and gave an example of new legal situations.

    Apple will of course make sure it suits its own strategy for its own survival, but Apple has also shown how the change is also mapped to benefits for its customers; the same benefits Apple has offered in the past. (Read my comment on your previous post.)

    Do you really think Apple is going to get rich off this 30% from publishers? It hasn’t yet for music, video, books, or apps.