People often criticize Apple as having a “walled garden” – but if you read the following from John, and you use Apple products, the difference is obvious:

The Kindle Fire experience doesn’t feel like you’re connecting to the web – it feels like you’re looking through a keyhole into one little room of the web… or perhaps you’re trapped in a hallway with many doors and many keyholes.  Many of the keyholes are blocked.

That’s when it hit me… Amazon isn’t giving me access to ‘The Cloud’, they’re giving me access to ‘Their Cloud’.  Everything that I purchase from them resides in ‘Their Cloud’.  The same is true for Apple. The stuff I buy from Apple ends up in the ‘Apple Cloud’…  Flash forward in time and I see myself carrying both an iPad and a Kindle, juggling them from one hand to another in order to access ‘My Content’ in ‘Their Clouds’.

Actually, the same isn’t true for Apple, though I can see why he said that. Apple’s iTunes content seems to be locked to iTunes… but it isn’t.  As much of Apple’s content that they can make DRM-free has been made so – only the studio labels stand in the way of DRM-free content.  From my iPhone and iPad I can access gmail, google docs, netflix, amazon’s store, Kindle content, etc. (In fact, I don’t own a Kindle, but read Kindle books on my iPhone and iPad all the time).  The addition of “iCloud” added features and functionality to my use of Apple’s devices, but didn’t remove any.  My iPhone config can now be backed up to the cloud.  Contacts, email, calendar invites now synchronize better between devices. But I also still synch those items with Google Apps. Having said that, I like John’s vision for “MyCloud” even better than what Apple, Google, Amazon, or anyone else is yet producing:

If the Universe was fair, which it isn’t, whenever I created any content it would be stored in ‘My Cloud’.  Whenever I purchased anything it would be stored in ‘My Cloud’.  Facebook, Google+, Apple, and Amazon would have to pull that content from ‘My Cloud’ to use it in their apps, and I would set the policies regarding access to ‘My Content’.

From what John is observing, it sounds to me like Amazon has produced an “Amazon tablet” not a general purpose tablet.  There’s nothing wrong with that, per se… but I don’t think that that’s what people were expecting when they pre-ordered.

It isn’t hard to think about the analogies applicable to cloud BPM offerings…

Related posts:

1. Updates on the Cloud and BPM Community
2. Ismael Defines Cloud Computing for Business Users
3. Activiti’s take on BPM in the Cloud

He recently announced an “extended vacation” for his free app:

Maintaining a second configuration of the app incurs direct, significant costs in development and support. Furthermore, the Instapaper web service that powers the app costs a good amount of money and time to operate every month. So Free users have a direct cost to me.

On the website, this cost is defrayed by ads from The Deck, but people using the iOS app might never visit the website. So Instapaper Free has an ad from The Deck in its list screen. It’s unintrusive, its advertisers are respectable, and it pays well. It’s the best ad unit I could ask for.

But it still makes far less than paid-app sales — the increase in app sales with Free’s absence exceeds this many times over. The math to explain this is simple: most Free users won’t give me anywhere near $3.50 worth of ad impressions.

Essentially, conversion rates from free to paid were low.  But without the free option, many would pay that relatively harmless cost of $4.99 – because the app has that much value to a significant number of people (including me).

I love the way he sums this up:

If you’re a developer, you’re probably talking yourself out of making a move like this because you think Instapaper is a special case.

Every app is a special case.

Maybe you think I can only do this because Instapaper is already popular. But it built its popularity while charging “a lot” for an iPhone app from the start.

Maybe you think I can only do this because my blog is moderately popular among geeks like me. If so, I assure you that my blog’s audience is smaller than you think, and is extremely insignificant relative to the size of the iOS app market.

Maybe you think there aren’t enough people willing to pay $5 for an app with no free version. I used to think that, too. But I was wrong.

The short version: don’t assume free is the only way.  People will pay for quality, and getting paid allows you to invest in quality… and the virtuous cycle ensues.

If you’re in a business other than writing apps for smartphones… you might be convincing yourself right now that you’re case is different, your market is different.  But you have only to look as far as Ning to see that sometimes charging for your service, site, or product is exactly what you need to do to focus the business and make money.

Related posts:

1. Its the People. And the Free Soda.
2. Zero Sum Game
3. Nice Nimbus Review

Marco (rightly) concludes there isn’t much to worry about.  First, what is an instapaper competitor?

• Saving articles to read later — timeshifting — like a DVR for the web.
• Synchronizing the reading list between computers and mobile devices.
• Presenting the articles in a stripped-down text format on those mobile devices for optimal reading on their screens.

If another product doesn’t implement all three, it’s not really an Instapaper competitor.

His take is that the first version is likely to implement bullet 1, and maybe bullet 3.  Perhaps the next version will be an Instapaper competitor.  As he says, Safari already has too much going on in its UI, and Apple tends to be conservative about making changes to it.  But what if Apple *does* build this Instapaper competitor?

Marco has spent time building his defenses:

• Supporting other browsers (on other platforms).  Safari features really won’t play in audiences that prefer to use Firefox or IE or Chrome (especially on non-Mac systems).
• Integration with other apps – this is analogous to putting down roots in the space that other apps can take advantage of, but which feed back into keeping Instapaper alive and relevant.

He also understands that he doesn’t need to win the market to make a fortune (he estimates 1% would be a fortune).

When you’re in this situation, you’re really rooting for more visibility.  A small market-capture or increase in publicity and attention can have a big effect on your revenues and fortunes.  It sounds a lot like the BPM world, actually.  A rising tide…

His next point is about Starbucks – the number of coffee shops has increased dramatically since Starbucks came along – and although they place their stores aggressively near other coffee shops – the *good* coffee shops actually do even better.  The less-good shops tend to go out of business or change their business model.

Marco’s words:

My biggest challenge isn’t winning over converts from my competitors: it’s explaining what Instapaper does and convincing people that they actually need it. Once they “get it”, they love it, but explaining its value in one quick, easy-to-understand, general-audience sentence is more difficult than you might imagine.

If Apple gets a bunch of Safari users — the browser that works best with Instapaper — to get into a “read later” workflow and see the value in such features, those users are prime potential Instapaper customers. And it gives me an easier way to explain it to them: “It’s like Safari’s Reading List, but better, in these ways.”

This is exactly the problem the BPM vendors have had-  it wasn’t beating the competitors so much as it was explaining what BPM can do for you and convincing people that they need this BPM thing.  This is not a zero sum game when the market is a long way from being saturated. And in that respect, the BPM market and the “Instapaper” market are very similar.

And this explains a lot about why BP3 works well with partners that outsiders would probably look at as competitors.  Philosophically, we believe we’re growing the pie rather than competing over how big each slice is.

Related posts:

1. Free may not be Best
2. Intalio’s Long Game
3. Downturn Game Changers

This argument seems to come up any time Apple’s iPhone comes up because it is often referred to as a “walled garden”. Of course, this is nothing new for Apple.  They were long criticized for keeping the hardware in-house rather than licensing their software to multiple hardware vendors, a la Microsoft.  This is certainly one definition of “open” – giving a channel of manufacturers the ability to leverage your OS and build hardware around it.  Another definition of “open” is releasing your source code for your operating system, a la Android, as Andy Rubin points out on twitter.  But for Joe Hewitt of Facebook, neither iOS nor Android are open:

How does Android get away with the “open” claim when the source isn’t public until major releases, and no one outside Google can check in?

Compare the Android “open source” model to Firefox or Linux if you want to see how disingenuous that “open” claim is

Until Android is read/write open, it’s no different than iOS to me. Open source means sharing control with the community, not show and tell.

Clearly, from an OS-developer point of view, neither Android nor iOS (nor Windows, nor Mac OSX) meets the bar. (There’s a more complete writeup from Hewitt here)

From a Telecom Carrier point of view, Android meets the “open” claim: a carrier is free to jam pre-load it with proprietary software (good or bad).  The handset manufacturers consider it open because they, too, can customize to their needs.  Though, as Hewitt points out, they’re at significant disadvantage because they only have source code at major release points and have no way of getting their improvements back into the main branch of code so that it will survive into the next major release.

As an application developer, both Android and iOS are open at development time.  For a small expenditure ($100 or less) I can equip my laptop with the software I need to develop my own Android or iOS application.  I can even load the application on my phone to test it. I just can’t hack the OS on iOS.  But if I’m writing applications, I don’t particularly *want* to hack the OS because I want my OS to look like everyone else’s (my customers’) OS.  Open “source” for the OS is something that developers (the Experts) want.

Interestingly, I never heard people complain that RIM’s Blackberrys were “closed”.  I suspect this is because the volume of developers for Blackberry was much lower and not in the mainstream (ie, Silicon Valley), and because the approval process for apps was dictated by each carrier in each geography, not by RIM.  So the complaints weren’t targeted at RIM, but at carriers.  Apple’s platform was clearly more open than RIMs in that the carriers couldn’t block your apps anymore.  Apple had an approval process, but this process did not have a “negotiate payments” step in it – it was all about your application, not about holding you over the barrel for financial terms.

Apple (and Steve Jobs in particular) argue that the real debate is not open vs. closed, but “integrated versus fragmented”:

We see tremendous value in having Apple rather than our users’ be the systems integrator. We think this is a huge strength of our approach compared to Google’s. When selling to users who want their devices to just work, we believe Integrated will triumph Fragmented every time. And we also think our developers can be more innovative if they can target a singular platform rather than a hundred variants. They can put their time into innovative new features rather than testing on hundreds of different handsets.

So we are very committed to the integrated approach, no matter how many times Google tries to characterize it as closed. And we are confident that it will triumph over Google’s fragmented approach, no matter how many times Google tries to characterize it as open.

I like Steve’s re-framing of the discussion, the poles in the debate.  But since I’m not marketing for Apple, I think the real debate is between the Experience and the Expert.  Balsillie of RIM complains that “We think many customers are getting tired of being told what to think by Apple.”  But Apple and Jobs aren’t telling customers what to think, or developers.  They’re explaining how Apple thinks – Apple has to defend against this notion of “closed” because the point (for Apple), isn’t to address the Expert-  it is to address the Experience.

Apple is oriented around creating a user Experience that “just works”.  They don’t always succeed, but that is what they’re after (if I had a nickel for every time someone at Apple, or NeXT before that, said “and it just works” I’d be a very rich man).  Meanwhile, the Experts are worried.  The Expert wants to be able to see the source code, compile it themselves, contribute to the project.  The Expert wants to decompile and find the internal APIs and write apps that leverage those unpublished APIs.  The Expert wants to be able to install unverified code and run it (perhaps his or her own code, developed on their own laptop).

I think many Experts are concerned that Apple is dumbing things down.  But certainly no more than Mac OSX did – for the experts.  For the Expert, I can still write my own apps and install them on my own phone.  If I want to sell them, there is a walled-garden channel for doing that – but “buying” is something non-Experts do, and Apple has built a streamlined Buying process within their iOS ecosystem.  Experts don’t like it, but non-Experts love it.  (No viruses? I like it).

There’s also an argument that “open” proponents make, that open wins out over closed over time.  But the real question is what is the target market?  Open source projects have often won over experts, but there are fewer examples where “Open” has won in consumer markets where the average consumer just wants their products to work.  Linux has made huge inroads in corporations as a trusted server operating system, and open source operating system cores makes up the core of many other product offerings (including Mac OS X).  But Linux desktops have never made much progress (don’t believe me? read Gosling’s article “Desktop Linux: the Dream is Dead“).   It is both an economic problem (free), and a user experience problem (too complicated for the average consumer).

Even in the corporate world, some industry titans are evaluating an integrated approach – in order to create a better experience for the customer.  The thinking goes that they can offer better integrated products – better tested, simpler integration, and simpler maintenance.  Of course, to make that strategy work, Ellison’s Oracle has to offer an integrated stack in which each component of the stack keeps pace with the industry’s cutting edge.  With the ecosystem of suppliers that feed the computer industry, this is easier to do today than in the 1980′s, when the vertical components would (mostly) be manufactured in-house.

The focus on experience is something that many people understand… but that many more do not.  I highly recommend reading Sachin Agarwal’s blog post about Posterous, recounting an argument with someone who thought Posterous was doomed due to smaller share, and fewer features, than some of its rivals:

I asked this person directly: do you have an iPhone? Nope. Do you use a Mac or a PC? PC. There you go. You don’t get it. Until you use an iPhone, a Mac, drive a BMW or Audi, you don’t even realize how great the experience can be or how much it can drive the success of a product.

[...]  My entire life, I fought for Apple. I tried to get my friends to use Macs. But they didn’t. It’s not because they thought their PC was better than my Mac. It’s because they didn’t know something better could exist.

[...]  And they don’t measure products by what they do, but by how well they do them. You won’t find a matrix where Apple compares their product to a competitor by feature. They measure products by the experience.

We’ll return to this topic again… focusing on BPM.

Related posts:

1. The Experience versus the Expert, Part II
2. The Difference Between the Apple Experience and the Android Experience
3. More Evidence that Investing in the Experience is Paying off for Apple

In the six months ending August 10, Android phones accounted for 32 percent of the smartphones sold, Nielsen said. By comparison, iPhones accounted for 25 percent of devices sold and BlackBerry handsets for 26 percent. A month earlier, the three types of devices were in a virtual dead heat.

(I believe these numbers are US-only).  Clearly, from a marketshare point of view, Apple needs to get out of its exclusivity with AT&T to improve its US numbers.

However, it is worth noting that Google’s share of smartphones is… pretty much zero.  They don’t sell phones.  But some other folks DO sell phones that run Android:

• HTC
• Motorola
• Samsung
• LG
• etc.

One would think, as they’re selling so many of these Android phones, they must be killing it in profit, just like Apple, right?

Not so fast.

Check out this article from Horace Dediu which reveals the velocity of profit and market-share changes in 3 simple charts:

The change in 3 years is astonishing

The dramatic nature of the change is all the more apparent looking at his last chart, which really shows the velocity of change:

Profit Share Growth is telling

So, if Android handset manufacturers are killing it in volume, surely they’re making a hansome profit as well, right?

Wrong.  Over the last 3 years, none of them has profit share growth north of 10%, and it looks to me like HTC is only barely above 0%, and Motorola might be about 1%.  The others are negative.

Meanwhile, Apple’s profits from the iPhone are soaring… and Nokia’s profits are plummeting.  So how is Apple getting all the profit when it has such small market share, and isn’t even the leader in market share growth?

First the obvious items:

1. Apple’s iPhones are still considered the creme de la creme and therefore fetch a higher price from service providers like AT&T.
2. Apple is selling every phone they can make – in a sense right now they are build-to-order – which means, no inventory going stale on store shelves.  That usually enhances profit considerably, though it also often means they lose out on some marketshare.

The less obvious items:

Apple benefits from laser focus – having essentially one model every year means that all the engineering focus can be on one model.  All the sales focus. All the support focus.  Yes, they still sell the 3GS, but this pattern of selling last year’s model at a lower price is a pretty simple model to sustain and support.

By leveraging common components and commodities across several device categories, Apple gets “scale” in certain components they might not otherwise:

• The A4 chip (iPhone4, iPad, and AppleTV)
• Flash Memory (NAND) – they are the biggest buyer by far, buying 20-25% of the world’s supply!  This gives them a huge pricing and availability advantage in the market.
• Touch screen R&D
• Touch screen components – Apple is already the largest purchaser of capacitive touchscreen glass screens.
• Leveraging iOS across multiple devices… and iOS itself leverages much of OSX.

By developing a few key differentiators and then leveraging them to the hilt across their product line, Apple is moving up-market at the same time that Apple is growing share.  But from Apple’s perspective, quality is much more important than quantity.

A reasonable difference, however, between Apple eating Nokia’s lunch, and Apple eating “Android’s” lunch (if we can pretend for a moment that Android phones are one thing rather than dozens of companies), is that Android *does* represent a viable competing platform, whereas Nokia’s fractured smartphone strategy did not.

However, as long as Apple’s platform is seen as the premier platform, with a halo effect for those who write apps for it, Apple will continue to see the best apps first.  And the platform will continue to be not only viable, but defensible. To that end, we’re already seeing Apple leverage the platform (appstore/iOS) across more devices than just phones.  And they’re making these moves faster than the competition, and in a more rationalized way.  I think in this market, you want to be the phone provider that is making money, rather than the one that is taking market share, if you have to make a choice.

Related posts:

1. Apple’s Strategy Pays Off
2. Data to Support Apple’s iPhone Strategy
3. Google Nexus One is Out. I Still Like Apple’s Chances.

Tomorrow, a significant percentage of BP3 is heading to an Apple Store of their choosing to pick up an iPhone 4.  My friends are a little surprised – although I’m somewhat of an early adopter on technology, I detest standing in line today for what I could buy easily another day with no wait.  I also hate to buy things the moment they come out because if there are any hitches, you don’t know what they are yet.  Finally, I hate to pay the early adopter premium.  But tomorrow I’m breaking these rules for a few reasons… First, I’m standing in line because I didn’t see the home-delivery option when I pre-ordered (maybe I didn’t see it or maybe I ordered too late on Day 1 to see that option?).  I’m buying early because Apple has earned my trust with the iPhone 3G (and 3GS, and iPod Touch… and several MacBook Pros).  Finally, the pricing doesn’t penalize the buyer for early adopter status.  So I’ll be there bright and early in the morning for my iPhone 4 pickup, and I’m looking forward to the Retina Display and other fun new bells and whistles.

Related posts:

1. iPhone in the Enterprise
2. Was it just me or did everyone have an iPhone?
3. And the iPhone Wins Again

I don’t think the company needs to stop controlling what apps get in the App Store. All Apple needs to do is add a new feature, buried several menu items down in the Settings app, that mirrors the one found on Android devices: an option that lets you install Apps from “unknown sources.” If a user tried to turn this option on, they’d get a scary warning about how these sources couldn’t be trusted, and that they may lead to instability, crashes, loss of data, you name it. Scary stuff.

Most users will never find that setting. Many who do will be loath to turn it on. But by putting it there, Apple immediately shuts up every single claim that the iPhone isn’t open. (Just as iPhone OS 4’s multitasking feature is debatably not “true multitasking,” no doubt many tech insiders would immediately howl that allowing unapproved apps isn’t truly “open,” but I don’t think regular consumers would notice.)

This is why I am surprised that Apple hasn’t taken this step earlier: By keeping the App Store closed, and by using a rigorous approval process, most iPhone OS users would never, ever consider installing an unapproved third-party app. Even in a world where unapproved apps can get loaded on an iPhone, developers will desperately want to be in the App Store.

(And who knows? Perhaps Apple would even feel free to tighten the screws on App Store approvals even further in such a scenario, to make the contents of the store even more groomed and filtered.)

What a fascinating idea.  I think another approach Apple could take is to have another storefront that only restricts based on API usage and malware type issues – basically, non-editorial stuff. So, the content may be objectionable, it may do awful things for your phone experience, but it isn’t a virus and it doesn’t violate basic TOS.  Its a thought.  Jason’s is easier to implement though, and keeps those apps at arms length.

Related posts:

1. Data to Support Apple’s iPhone Strategy
2. Apple’s Strategy Pays Off
3. Very Good Argument for Forming Good Habits

But there’s another factor that analysis like that offered by John Arnold overlooks.  The mobile website experience is significantly degraded by the quality of your 3G or Edge signal.  It makes some web applications nearly unusable, even though they were specifically designed for Android or for the iPhone.

Cameron Moll gives a similar critique of the current state of affairs:

I argued that “smart clients” (lightweight apps installed on a device whose content is primarily fed by and stored in the cloud) would and should remain secondary to providing the same experience in the browser, again for the reasons mentioned above.

Since the release of iPhone and now with the release of iPad, I’ve gradually found myself questioning more and more the assumption I made. Apple has consistently proven that holistically controlling the entire user experience—inclusive of hardware to software and everything in between—has the potential to yield a more pleasant experience overall. Think of Mac OS + Mac, iPhone OS + iPhone, and now iPhone OS + iPad.

He wonders if HTML5 and CSS might still offer viable alternatives to objective-C on the iPhone, but I think without a fully “local” experience with the cached data, it won’t be good enough.  One of the things phone users are starting to value is how their applications behave when they’re offline (in the subway, on a plane, or just in a dead spot).

If I were writing my “mobile experience” for a product today, there’s no question I’d write it first for the iPhone OS.  Odds are it will have the best overall user experience and set the stage for positive reviews and buzz – as well as reaching the largest number of people.  People on phones other than iPhone and Android phones simply don’t use the mobile web – it doesn’t truly work for them.  Android is gaining steam but it is still a distant second, and has a fractured marketplace for me to publish my apps to.  In fact, I’d probably write the iPhone App first, then the mobile web app.  And then evaluate market demand for Android.

But that’s just me.

Related posts:

1. Apple’s Strategy Pays Off
2. Data to Support Apple’s iPhone Strategy
3. iPhone in the Enterprise

It’s really too bad because most of what these two companies do is so complementary, and symbiotic.  One wonders if Google is fighting too many battles on too many fronts- the same kind of question that was often posed to Microsoft when they were competing with so many software companies for so many of its applications.  The interesting thing to me is, I’m not sure that this fight was necessary for Google.  “Smart” phones were inevitably going to give Google the opening in the mobile space that it was looking for… The only real concern I can see is whether these platforms would, in some fashion, be closed to Google’s applications and ad platforms.  It doesn’t seem likely, given how compelling Google’s map and search applications are, and the ubiquity of Google Apps as a platform. And given that smart phones are already cheap ($99 or less), price doesn’t seem to be a huge barrier to entry anymore…

I hope that in spite of the competition in some areas, that these two firms can work together in areas where it makes sense-  I love the map application on my iPhone, but I’m not switching to Android in the foreseeable future – I like the overall Apple iPhone experience.

Related posts:

1. Staying off-topic: More Google-Moto-Apple
2. Google Nexus One is Out. I Still Like Apple’s Chances.
3. What Does Google Wave Mean to ACM and BPM?

So given that focus, why invest in custom silicon?

“We felt that we had the best knowledge of what we wanted the silicon to do,” he said.

By designing its own silicon, he said, Apple can create chips that are best-suited for the company’s products, allowing them to run cooler and more power efficient.

“Apple has, for years, been in the silicon design business,” he said. “When we were on the PowerPC architecture, Apple always personally crafted the northbridge and southbridge chipset, and so it’s not new to us.”

In other words, even when it appears that they are straying from their focus, Apple’s management team has identified an opportunity to use their laser-focus to their advantage, upstream and downstream of the core product the consumer is buying.  (In my way of thinking, silicon is downstream, and retail would be “upstream” of the product itself)

Coincident to this talk, there was new data out showing that the iPhone’s unit shipments *and* market share grew more than any of its rivals in the smart phone space (and honestly, the research firms are being generous when they apply the “smart” label to some of the phones included).

And meanwhile, they’re getting some good news from their major US partner: AT&T.  A recent report from PCWorld shows that AT&T has dramatically improved the reliability and speed of its network.  Not that I can feel these improvements from a particular square block in downtown San Francisco (and the AT&T network gets its lowest scores in San Francisco!), but I’ll take the study at its word that on the whole these improvements are real.

Oh, and, happy birthday, Steve.

Related posts:

1. Apple’s Incredible Efficiency
2. Apple’s Strategy Pays Off
3. Alain Breillatt: You Can’t Innovate Like Apple. (But You Can Learn a LOT)