Does Apple’s Lion Strategy Threaten More Disintermediation?

Apple’s moves to converge its iOS and MacOS platforms over time and to create a unified developer environment between their disparate devices is a smart move that responds to the reality of the market and competitive environment.  The question is how far they’ll go and what impact the efforts will have on the appliance space, the developer community, and even the service provider market.

 The iPhone launched the smartphone revolution, which in turn launched the applet/widget revolution, which in turn is opening the question of whether device-resident intelligence will play a commanding role in the development of what the buyer/user perceives as “services”.  The iPad has had a similarly transforming effect in the tablet space, and competitors have already established themselves with smartphones—primarily via Android-based phones in the broad market and on RIM’s building on its enterprise incumbency.  Competition is also increasing from both sources in the tablet space, with pretty much the same cast of competitive characters.

What creates Apple’s platform dilemma is that broader installed bases begat greater support for developer opportunity, and thus a larger application community.  As I’ve noted before, this was one of the factors behind Apple’s loss of its early lead in the PC market to the IBM-compatibles.  An open framework attracts support because it is open, but it also reduces the originator’s ability to control and monetize its own marketing, which is why Apple has traditionally rejected such an open approach.  But a marriage of its Mac operating system and the OS used for appliances and the harmonizing of a development environment across both would have the effect of increasing Apple’s developer mass.

The challenge is that it will also almost certainly cause Google to prioritize Android as a tablet OS, thus exacerbating the competition between these two industry giants.  The further the Android OS goes in terms of supported hardware, the harder it will be for Apple to sustain itself as an appliance walled garden.  Some gestures of openness exist through the developer program, but Apple’s long-standing feud with Adobe over Flash illustrates where walled-garden thinking can take you and how it can create a lot of gratuitous enemies.

On the service provider side, the competition between Apple and Google (through its Android proxies) creates yet another path to disintermediation.  Ceding service-creation innovation to OTT players was a problem in wireline, and ceding it to smart device vendors and developers in the wireless space only makes things worse.  The so-far-ill-fated Microsoft phone strategy has been toying with hosted services, but probably more as a means of getting Microsoft into the OTT feature business than as a means of empowering operators.  Can operators respond with an approach of their own, and in time?  Their service-layer revenue future may depend on it.

Leave a Reply