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On Steve Jobs and disruptive change

Enrique Ortiz wrote a piece called The Impact of Steve Jobs on Mobility, that I’m adding my spin on below.

First: Without Steve Jobs there would most likely be no iPod, iPhone, iPad, iTunes, App Store etc, and probably not even any Apple at all. Therefore, think “Apple controlled by Steve Jobs” when I simply write Apple below.

As always, don’t expect political correctness. Business is not about political correctness. It’s about making tons of money. Something Apple is very good at, but without the right vision they would have failed.

Apple (consciously or not) set out to become owner of the most profitable part of the mobile market, its customers, the lion share of the revenue and the control. Audacious no doubt, and no established mobile phone manufacturer dared this. I’m pretty sure no one else at Apple would have dared that either.

A few pieces to this rather complex puzzle, that I’ve written about over the years:

They focused on enabling and open Internet technologies rather than walled garden style mobile technologies. Of course they needed to support voice, GSM and CDMA, but apart from that an iPhone is primarily an Internet-enabled information terminal using the mobile radio as a flat-rate wireless broadband link to the Internet and as an enabler for Apple, rather than as a technology to reach premium operator services. MMS came very late and reluctantly, simply because Apple didn’t see any value of it for its own business. Of course the iPhone doesn’t support WAP, Java ME, Wireless Village etc, for the same reasons. This way Apple saved tons of time and retained control, as they already had most of the technologies needed in Mac OS, and didn’t have to follow standards body work (remember that voice, SMS, GSM etc are handled by the radio modem, that Apple simply licenses from another provider; they only needed to write simple call handling / messaging applications on top of that).

Note also the fact that by deploying flat-rate subscriptions, users stopped thinking about data cost. That was a very important enabler and increased data use several magnitudes, even when talking only smartphones.

They quickly got ownership of the customers by enforcing them to register at iTunes to at all be able to use the iPhone. That way Apple got excellent tracking of user behavior and actually a better marketing channel and loyalty than the operators.

The understanding of after-market business, that operators have tried for many many years, but utterly and embarrassingly failed with. Neither did the traditional manufacturers understand this, and possibly in part they feared the wrath of the operators if they made too much noise. After all, phone manufacturers sell to operators, not consumers.

The understanding that most users are non-technicians, and that not even technicians like technically complex things. I tried using a few year old Symbian and Windows Mobile phones for simple things like e-mail and browsing, and I was stunned by the complexity.

Traditional phone manufacturers simply didn’t dare challenge the operators’ position. Apple just assumed they could and should.

The iPhone is just one phone model, evolved over time. Traditional phone manufacturers still release way too many phones, instead of focusing on making good and easy-to-use phones (this works fine on low-cost simple phones, but smartphones were then a complete mess, Microsoft leading the “confuse a cat” approach). They simply don’t take the time to do so, and somehow still think they need to release tons of phone models each year. I’m sure, without Android they would be completely lost, still using Java ME, terrible content distribution models (OK now for apps, but not for music, video etc, and they don’t get the revenue for app sales; Google does; don’t forget that big loss of revenue, that Apple gets), a completely fragmented app platform situation, etc etc.

Apple makes complete devices. In comparison Google makes Android (pure and generic software), while manufacturers deploy Android. That means Android never gets optimized to specific hardware. Apple is always in control of both, and can put a lot of effort into making for instance lists scroll very fast and generally make the experience very snappy, despite possibly slower processors and less amount of memory. Also, iOS is a more efficient system than Android, and iOS applications are developed in Objective C, that should be as efficient as compiled C/C++, while Android applications are developed in Java that might be more or less efficiently compiled, and the applications are of course not optimized for all the different Android models out there, using different screen resolutions, CPUs, hardware acceleration etc. Again, there’s only one iPhone model, slowly evolved over time, running the same system, using the same APIs. That’s a ton of difference.

The display is the keyboard, and as you know covers the whole front of the phone. That’s a very important design decision, as that makes the UI completely customizable, and keyboards for any nationality can be implemented through software. Also the UI can change completely from screen to screen. Now so obvious, but just a few years ago mobile phones “had to have” a mechanical numeric keypad. Not that you can key very fast on a display-based keypad, but the fact that the UI is  customizable makes up for that. You lose some, you gain much more.

Gesture control of the UI has become a mainstay through the iPhone. The resistive touch panels used earlier didn’t work at all well for gestures, and often required a stylus, but capacitive touch panels do, as they require no pressure and  no stylus. Just your finger.

A seemingly tiny detail was that Apple implemented GPS, accelerometer, compass and other enabling technologies before they were really useful, and in all their phone models (again, as they only had one phone model), all adding to the vast possibilities an application developer could deploy.

Apple understood that mobile photography is not about getting journalist awards but about documentation of experiences, hence image quality was not a major concern, and still isn’t. Meanwhile not the least Samsung and Sony Ericsson fought a war about mega-pixels that consumers didn’t care about and didn’t understand, not even now.

Meego could have solved Nokia’s smartphone woes, but due to politics (and politics alone as far as I see it) they went for Microsoft instead, losing at least a year in market and product development, and also lost the respect from the market that still see only Symbian smartphones from Nokia. Nokia is still the biggest on low-cost phones, but news media hasn’t cared about low-cost phones the last 10 years or so, only smartphones. And media companies are big users and fans of Apple products overall: Free marketing anyone?

Apple charges a fat premium for all its products, and no doubt its phones too, but customers are happy with that. That’s the difference between selling technology and selling life-style/attitude, and is a major factor to Apple’s success. At the end of the day it’s of course all about revenue and profit, and manufacturers using Android are fighting diminishing profits due to overall much more competition, lower prices, Microsoft (and others’) patent trolling, etc. Remember, revenue is not the important thing, even though people mainly talk about this. Profit is.

So some advice to other phone manufacturers (after the fact):

  • Release only one smartphone model, make it very good, and evolve it
  • Ignore low-end completely, as there’s no profit (yet Apple is supposedly moving there now, at least into low-end high-profile)
  • Ignore operator requirements, unless they stifle sales
  • Own the after-market sales of content: device + content equals a s**t-load of money
  • Provide services customers want, and that increases loyalty and profit

Admittedly, Apple has completely failed in social networking. Why are people not talking about that? Apple instead tries cloud services, in competition with Google, Microsoft, maybe Oracle, maybe Sony etc etc.

It’s the whole that counts, not the details, but Apple did both the whole and the details well. Kudos!