counternotions

There are two mainstream operating systems in the world and they don’t quite care for each other. While Microsoft can copy Apple and afford to ignore it when strategically advantageous, Apple’s problem is of a different sort.

Apple is on a different trajectory of innovation. Having a fraction of Microsoft’s userbase, Apple must out-innovate to survive. Its product pipeline depends on ‘blockbuster’ hits, like the iPod and the iPhone. Being as good as or just incrementally better than the competition is just not enough.

Collection vs. integration

The superior user experience of Apple’s products is the result of tight integration of hardware, software and services. To a casual user the iPod is a cute and useful gadget. To Apple, it’s a careful orchestration of many intertwined factors:

If we were to take away a few of these interlocking factors, the 110-million strong iPod would no longer be an iPod, it would be just another moribund “iPod killer.”

Apple is the only major company that’s both horizontally and vertically integrated: Microsoft doesn’t do much hardware; Motorola, Nokia, Sony or Samsung don’t own operating systems. A typical not-the-iPod media player, for example, depends on critical licensing from many other companies:

Rate of innovation

Unfortunately, each one of these varied companies has a different rate of innovation and likely a different business model. For example, Microsoft first thought that it could lick the iPod/iTunes threat by getting an army of partners to license its PlaysForSure DRM so that others could build the hardware around Microsoft’s software foundation. What worked in the PC business didn’t against Apple’s tightly integrated, single-company platform capable of pursuing a very aggressive innovation path.

Within three years, Microsoft had to change course completely, abandon PlaysForSure and compete against its former ‘partners’ by introducing its own hardware, incompatible DRM and download service. Those MP3 player manufacturers beholden to Microsoft’s rate of innovation saw, in turn, their market growth potential collapse. This is a classic build-or-buy dilemma faced by all enterprises when they have to make strategic product decisions: can you let other companies control the rate of innovation of your own products?

For Apple the iPhone is the product, perhaps more than any other, that brings this question into focus. The iPhone is cross-platform from its inception. Like the iPod, its principal conduit to the rest of the computing and communications universe is iTunes.

While many media players and phones have their management smarts and content creation tools built in, the iPhone needs iTunes like an umbilical cord. From a design point of view this makes the device easier to use, simpler to manage and cheaper to produce. It also gives Apple a great deal of control over software/firmware updates, security, monetization and interfacing with other applications on users’ desktop machines. And therein lies the problem: the majority of iPhone users are on Windows.

A lot of innovative integration Apple could create between the iPhone and its desktop universe can’t be implemented on the iPhone simply because of what’s not available to Windows users. While QuickTime, iTunes and Safari are cross-platform, many applications that could provide exciting opportunities for iPhone integration like iChat, Keynote, Mail or iPhoto are not.

The Sound of One Hand Clapping

We saw a small example of this limitation this week at the introduction of Leopard. Some people assumed that the iPhone Notes application would directly ’synchronize’ with the Notes capability of the new Mail app. Unfortunately, as there’s no Mail app on Windows, that one-way integration is done through platform-neutral IMAP emails, as John Gruber explains. Otherwise, Apple would have to rely on Microsoft’s Outlook for notes synchronization, but cannot mitigate the discrepancy of user experience between iPhone, Outlook and Mail presentations of notes. That is the beginning of a slippery slope, especially for a company that didn’t want to rely on Musicmatch Jukebox app to manage iPods on Windows not too long ago.

The dilemma for Apple here is: should it index iPhone’s rate of innovation to what’s available on Windows or port currently Mac-only technologies to Windows as it has to provide an equal measure of user experience to all iPhone users?

From my conversations with Apple folk, I think there was a lot of trepidation with cross-platform migration starting with QuickTime in 1994, continuing through the decision to introduce iTunes on Windows in 2003, and finally to current discussions on iSync and Core Animation.

Where do you draw the line?

If Apple migrates too many critical apps and frameworks to Windows to make its cross-platform devices platform-neutral, will it be able to maintain sufficient differentiating advantage over Windows for the rest of its desktop business? And if it keeps some of its innovations Mac-only will that hold back its ability to out-innovate its numerous and well-funded competitors for cross-platform devices?

Do you see any Mac technologies going on a Windows expedition anytime soon?