Speaking at the CTIA Wireless I.T. and Entertainment show in San Francisco, David Ulmer, senior director of entertainment products at Motorola, says he’s convinced Apple won’t open up the iPhone anytime soon:
“I guarantee you that you will not see a Napster music service on the iPhone…The iPhone may offer some sort of open web. But music sales? Device sales? Accessory sales? Anything you pay is probably going to come from Apple.”
Utterances of a direct competitor?
A recent ChangeWave survey reviewed at SeekingAlpha shows Motorola losing marketshare, as the manufacturer hurt most by the introduction of the iPhone.
Once heralded for its market-changing Razr phones, Motorola has been steadily losing market share and has been close to getting knocked off its No.2 position to Samsung. So we can forgive Ulmer for trying to shift attention from his own beleaguered company’s troubles to Apple’s unwillingness to share the wealth.
But what exactly is he complaining about? If we are to assume that the upcoming SDK next February won’t open up the iPhone completely, does that mean that Apple’s customers will be hurt? The iPhone is completely closed right now and its customers are far away the most satisfied in the industry, nearly three times more satisfied than Motorola’s. It’s hard to imagine when the iPhone gets third-party apps next year, customers will be less satisfied.
This mantra of ‘openness’ is everywhere nowadays. Facebook gets $15 billion valuation after it ‘opens up’ its platform to outside developers. Never mind the fact that Facebook is a one-way data roach motel where users’ metadata remains behind the company’s walled garden.
Those without short memories may remember that a decade ago Macintosh was wide open but a few came to the party. Indeed companies like Adobe, Macromedia, Microsoft and a host of smaller ones either eliminated their Mac offerings, failed to upgrade them or never introduced Mac versions of new products. This was one of the critical reasons that brought Apple to the brink of extinction.
Steve Jobs is determined not to repeat that mistake ever again. Over the last decade, wherever Apple felt a significant Mac market was under-served by third parties, it has introduced its own applications, quickly besting competitors and creating market-leading, signature products: iPhoto, iTunes, GarageBand, Aperture, FinalCut, Motion, Safari, and so on.
We already know that Apple is capable of selling 110 million iPods and breaking historical records in consumer electronics without opening up the device. And it isn’t as if its customers are leaving in droves.
So, indeed, ‘opening up’ a device or a platform is no guarantee of success, otherwise phone manufactures on whose cheap products customers can load a bewildering number of applications wouldn’t be so paranoid of the iPhone. Being ‘closed’ is not a precursor of failure either, as the phenomenal success of iPod shows.
At the end of the day, the success of a product is contingent not upon its ‘openness’ but the degree to which it provides utility and delight to its customers. On that score, as the chart above shows, nobody comes close to Apple’s record.