The latest tech news wonders if Nexus One will or won't be a
challenge to the iPhone. Or it examines theories that Google, with
Android and Chrome OS, will be able to take on Apple's iPhone and OS as
Microsoft did on the desktop. Or it contemplates whether Andy Rubin, a former
Apple employee and current Android engineer, has a little Steve Jobs in
him.
All of this is mostly blind guess work with a failure to understand
the scope.
No iPod Killers
Let's ask why all the competitors to the iPod failed.
They could match or even beat the song capacity (at least for a
short while, until the next model came out). They could add an FM radio
and other less useful features. Many tried building their own download
stores to match the
iTunes Store. Even Microsoft, with all its money and connections,
failed to dent the iPod's market with the Zune.
What did Apple have that the others lacked? Initially, it was the
iTunes Store, and later it was the much larger selection of the iTunes
Store. The iTunes Store gave iPod users something to do with their huge
storage capacities. Since Apple kept the iTunes Store to itself, it
locked competitors out of a huge support structure.
Image if you could make the world's fastest or most fuel-efficient
car, but the catch was it could not be driven on regular roads. No
matter how fast or efficient, if you can't drive it where you want, the
car is useless. Features matter less than utility. Ultimately even
price won't help if the difference is small and the limits are
noticeable.
At issue is who controls the most widely used roads.
Mac vs. Windows
In the first battle between Apple and Microsoft - over operating
systems: Apple II & III vs. MS-DOS, and later Macintosh vs. Windows
- Microsoft did a better job of getting businesses and developers on
its side. It then locked Apple out. Apple remained a niche provider for schools, the
publishing and imaging industry, and high-end consumers.
Microsoft effectively controlled all the other roads.
Lesson learned: Apple switched to Intel chips in 2006 and added Boot
Camp so Macs could run Windows. Now I can take my MacBook anywhere a
Dell PC can go. By going Intel, Apple gained access to all the roads
that Microsoft and PC makers controlled.
Apple has turned the tables by building the roads for its new
products. The iTunes Store was the first. Then there is the iPhone/iPod
touch App Store. Apple controls access to these stores. It built the
system, designed its products to use these systems, and is negotiating
contracts to expand these systems with more music, TV, movies,
developers, etc. Soon
Apple will have advertisers under its system as well.
Controlling the Market
Roman emperors built roads because that is how you control an
empire. You need access to all your territory for the free movement of
goods and troops.
The roads were built to match the Roman chariot; any one using the
roads had to fit this requirement. Rome built to satisfy its own needs
first, but it gave access as a benefit to encourage their use. Once
people used its roads, Rome set up controls, check points, and tax
booth where it chose. The merchant and consumer class was beholden to
Rome's road system.
Google vs. Apple
Google is definitely trying hard. Of all the companies, it seems to
most clearly understand the challenge that Apple represents. The
Android phone and the Chrome OS netbook are both trying to steer some
control back to Google. Mostly Google is fighting for the scraps that
the iPhone has left behind, including Verizon and Sprint customers.
Unfortunately for Google, Apple has a long lead in this road
building challenge. Apple isn't slowing down, and it is going to attack
Google directly on the advertising front. At the end of the day, Google
will be lucky to remain an important niche player.
Remember Apple has $23 billion in cash sitting around. If it needs
to buy or build access for its products, it can and will. Today, all
roads lead to Apple. Until someone meets or exceeds that situation, I
don't care how many features are crammed in. Apple wins because it owns
the roads - and Apple is building new roads faster than anyone else.
