iPod touch nay-sayers: shackled by “gadget thinking”

Over at Russell Beattie’s Weblog Aw, gee… Apple doesn’t love those hacks:

Well, update 1.1.1 has come, and we now know that in fact, the new cool open Apple is still the old insane closed Apple of old. There is no “benevolent Apple” which is looking the other way while hackers “extend” their platform, there is simply the dictatorial Apple of old. This is shown quite clearly by both the latest update which hammered all the iPhone hacks out there, and by the iPod Touch, which has ZERO real reason not be an open platform. [Emphasis added]

The implied criticism here is that, unlike the iPhone, the iPod touch is not even tied to an exclusive AT&T lock-in, and since it runs a version of OS X, Apple ought to open it up to third party developers. While the implied prediction is that if Apple doesn’t create an open platform the gadget will fail.

No one really knows what Apple will do or if the iPod touch will fail. But we’ve all heard a thousand times by now that “the old insane closed Apple of old” is making a big mistake by not opening it up…again.

In reality, making a gadget open to third party developers doesn’t necessarily lead to commercial success. The history of mobile devices are chockfull of open and perfectly horrible flops. Not opening up doesn’t preclude market place success either. Look no further than the closed iPod, one of the most spectacular success stories in consumer electronics ever. In other words, “open vs. closed” is not a strong commercial success indicator, as iPhone/iPod nay-sayers would have us believe.

Why keep it closed?

There may be many reasons why Apple has not yet opened up the iPod touch or the iPhone:

  • Creating an SDK for public APIs for a device Apple has never done previously is difficult, so the company may not be ready yet.
  • Apple said that with the iPhone it was adding a third leg to its Mac and iPod business lines and the process would take a few years. In fact, Apple’s booking iPhone revenue on a subscription basis over the life of the phone contract.
  • Apple may be waiting for second or third generation devices or the ending of its exclusive partnerships in order to open up.
  • Before opening up, it may be working with a few key third parties such as Adobe or Google to facilitate sub-platform development based on Flash or Gears, which may require dealing with additional power/memory management or local-caching/storage issues.
  • Apple might not yet be finished with the core library of gestures, including the often requested cut & paste, or UI controls that it wants third party developers to adopt.
  • The upcoming Leopard may have OS-level implications for Apple’s mobile devices which the company may have felt not ready to divulge months ahead of its introduction in October.
  • A larger device, the “iTablet” whose rumors have intensified lately, may indeed be a product Apple is currently designing as more of a general purpose, ultra-compact PC than the iPhone/iPod touch, where having third party developers might make much more sense.

Divining why Apple keeps its mobile devices closed as consumer-level small appliances is a futile exercise. We don’t know. We can ascribe it to evil intentions, incompetence, hubris, lack of foresight, etc., or we can consider it as part of strategic market development.

Strategic or systems oriented design is a balance…of business, design and technology. Steve Jobs’ second coming at Apple has been an exemplary demonstration of the power of strategic design. If Jobs had listened to the Street and the pundits who were browbeating Apple to adopt Microsoft’s DRM/WMA or to open up the iTunes/iPod/iTMS triad to third parties a few years ago, I doubt very much that it would have sold over 100 million iPods and 3 billion songs.

Game over?

Indeed, our prognosticator Russell Beattie had already declared in 2005 “game over” in digital music and entertainment:

Ever play a game of chess and your opponent makes a move and you realize the game is over? Nothing dramatic like taking your queen, just a simple strategic move where, after you look at it for a second you think “oh-oh,” and from that moment on you’re basically just looking for your opponent to make a mistake because otherwise they’re obviously going to win.

Well, I’ve been watching Microsoft’s moves over the past few weeks and I can pretty much say that it’s game over for a lot of Microsoft competitors, though they may not realize it yet.

Obviously, I’m mostly concerned about the mobile phone market, so it’s come as a real shock to me the integration and forsight that Microsoft has applied to this area when it comes to music and video. Very soon anything you’re able to record on your TiVo will be playable on your Windows Mobile device, the new MSN Video Downloads service (among others) will allow you to see television and movies, and the variety of integrated music stores will allow you to buy and play music. There’s no competitor to this breadth of mobile media offerings right now or that I can see in the near future.

Apple lost the PC desktop because it refused to license its Graphical User Interface and now they’re going to lose the Consumer Electronics market because they’ve failed to license their FairPlay DRM technology.

I don’t want to dwell on Beattie’s rather striking misreading of the tea leaves here. I simply want to point out that when you segregate one product out of a company’s strategic decision tree, you fall into the “gadget thinking” hell hole. The vast majority of “iPod killers” are gadgets: often haphazardly thrown together amalgamation of features masquerading as product. The OS, UI, DRM, music store, player app, etc., are usually OEMed from separate sources and wrapped in industrial design only a mother could love. Such insular “gadget thinking” has no chance of killing the iPod which finds its true and lucrative value only in the context of the iPod/iTunes/iTS triad of tight integration.

Obviously opening up tightly integrated platforms like the iPhone/iPod is more difficult. But that’s the price we pay for superior user experience. Unlike segregated gadgets, the innovation curves of various components here can be well coordinated. If Apple were to introduce a much more expanded gesture library over a period of time, for example, it would be problematic to open up the platform to third parties at an inopportune time. I’m convinced that if Apple had introduced the iPhone with twice the multi-touch gestures it may hope to have in the future, it would have seriously botched the remarkably quick acceptance of its interface.

For Apple, the mobile landscape is in flux. The company has to coordinate exigencies of domestic carrier partnerships, European and Asian launches, transition to 3G, specialized components, opportunities in WiFi (and perhaps WiMax) and, really, laying the foundations of small-screen convergence devices for the whole industry, while keeping its most amazing financial performance up to Street expectations.

For armchair open-platform generals, of course, none of that matters: is it open or not?

Then, apparently, there are companies happy to exploit such perceptions:

Nokia ad

18 thoughts on “iPod touch nay-sayers: shackled by “gadget thinking”

  1. I totally agree with Fredrik and how most pundits “assumed” certain things. But here among the hoi polloi, my friends and I (early-adopters in some cases, but mostly just plain folk) recognized that this was a mobile computing platform. I felt that all along, Apple would release upgrades and so forth and the SDK and such, because it was a hardware device with ONE BUTTON! The rest of it is software based, and therefore INFINITELY upgrade-able. So they didn’t release the whole she-bang at first.

    Look at how many iterations of iTunes there have been and how many incremental upgrades in between. Each one added something. The phone has ONE BUTTON. That is the extent of it hardware “limitation”.

    Now we all know that the SDK is out and iPhone 2.0 will be out in June. But the reason I got the iPhone and not another computer is that the iPhone is the cheapest computer on the market right now, and it is totally virtual.

  2. From what I gather the reason why Apple didn’t want third-party apps on the iPhone to begin with was that the OS wasn’t finished. They apparently wanted to get it out the door so they could get rolling. Now the OS has been thoroughly updated and the SDK will be available in the not-too-distant future.

    While Apple is no doubt quite skilled at handling information and PR, their way of communicating reality can cause a bit of confusion. Of course we thought the iPhone was done. Of course we assumed that their “no” to third-party apps was somewhat permanent and had some hard-to-fathom reason. In reality, I think they were just applying a bit of misdirection at the appropriate moment. We all thought “oh well, this is how it’s going to be” instead of “it’ll come when they finish the product.

    Cognitive dissonance, I suppose.

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  4. Peter, should Apple ignore the labels and allow users to copy ring-tones? Should Apple ignore the AT&T contract and enable iChat to make free VOIP calls? Should Apple make it easier/transparent to playback non-DRM media on aTV? Etc.

    They could. But it’s very difficult to then negotiate a contract with the IP owners. Do you think for a moment that Apple could have had the iPod success if it hadn’t negotiated an easy-DRM, $0.99/song, comprehensive catalog deal with the labels?

    Yes, Apple did get into bed with AT&T (allegedly, the company that cooperated with the government to spy on us). Do we castigate Apple for that and call it a day? Or congratulate it for taking the first ballsy step to fundamentally alter the power phone carriers with its groundbreaking revenue sharing model or Wi-Fi implementation? Even executives of Nokia and Motorola are grateful for Apple realigning the market.

    Design is a balance. It can’t happen without compromise. Who else is giving us, on a consistent basis, products with better balances?

  5. I’d argue, though, that much of Apple’s success has come from creating great products that let consumers do things they want to do.

    Consider “Rip, Mix, Burn.” The music industry was aghast that customers could take music they owned (and didn’t) and make their own mix CDs. Heck, I remember music honchos complaining to Congress about how computer companies were encouraging people to steal music (using “Rip, Mix, Burn” as an example).

    Today? “Ooh, we can’t let you make ringtones, Mr. Customer. We might get in trouble!” (Use your best Bluto imitation for that one)

    Once Apple stops creating those products, the customers will find someone else who will.

  6. Peter: “Whatever happened to the Apple that didn’t release something until it was right?”

    In the second coming of Jobs, that no longer is the approach Apple’s taking. Whether it’s Aperture, iMovie 08, Spotlight or iPhone, Apple’s willing to release products before they reach maturity. Why? It may have to do with additional revenue :-) However, without AAPL’s stellar financial performance (and margins) over the last few years Apple would be nowhere today. That record allows the company to do a lot of things and take risks (like aTV) it otherwise couldn’t.

  7. One of the difficulties I have is with the list of reasons is that, frankly, they all pertain to Apple.

    Whatever happened to the Apple that didn’t release something until it was right? What happened to the Apple that “sweated the details”? Are you telling me that nobody at Apple thought, “Nah. Who needs copy and paste?”

    All the excuses and rationalizations mostly pertain to Apple’s business. What about iChat? “We can’t have iChat because AT&T would get upset because people wouldn’t be paying money to send SMS messages.” Customers want to make ringtones out of music that they already own. “Well, we can’t let you do that because it might offend the music industry.”

    In other words, screw what the customer wants.

    As an aside, I’ve been laughing lately at the “Apple is as bad as Microsoft” angle. One interesting comparison is that Microsoft promises the world and then fails to deliver. In the case of the iPhone, Apple, conversely, doesn’t exactly promise the world but implies that if you just stick around long enough, they’ll eventually deliver. Bring up things that the iPhone doesn’t do and Apple and their cheerleaders will immediately come back with, “Oh! But Apple will be releasing updates that might let you do that someday!”

    In other words, “Stick with us and someday we’ll get it right.” Gee…sounds alot like Microsoft, doesn’t it?

  8. Good article. It is all about the user experience. How a company addresses user experience in it products or services will define (usually) how successful a product is. Open or closed is irrelevant. What matters is user experience.

    Same for consumer products, same for web sites.

  9. K,

    This article was right on the money, but I left this comment to say that your reply to Tom B. was right on the money as well. M$ has COMPLETELY admitted that an integrated HW/SW model is the way to go, a la Apple. Daniel Eran also pointed this out in one (or several) of his articles on Roughly Drafted Magazine (roughlydrafted.com). Check it out, if you’r e not already a fan, I’d be willing to bet you soon will be.


  10. tom B, Microsoft has already reversed direction: XBox and Zune are nothing but an admission of the fact that vertical integration a la Apple where HW and SW are tightly integrated from a single company is what’s needed in (especially) the consumer markets.

  11. “If Jobs had listened to the Street and the pundits who were browbeating Apple to adopt Microsoft’s DRM/WMA or to open up the iTunes/iPod/iTMS triad to third parties a few years ago, I doubt very much that it would have sold over 100 million iPods and 3 billion songs.”

    It amuses me to contemplate the big bucks MSFT must have put in to MS-DRM. It seems now that DRM may go extinct before they recoup a penny.

    “Apple lost the PC desktop because it refused to license its Graphical User Interface”

    People talk about these things in the past tense. I bet MSFT is pretty sorry now that they hung their hopes on software rather than an integrated hardware/software solution. Apple made the CORRECT choice. Apple’s choice leads to unmatched USER EXPERIENCE. Their difficulties in the 20th century arose from poor choice of management (Sculley), mostly.

    Let’s look at the History of Computing in another ten years. History will not be kind to MSFT’s decision to graft eye candy on top of XP and call it “Vista” instead of fixing Windows’ deep seated problems. Apple retooled their OS to give it a UNIX base using way less cash than writing Vista took, I should think. Linus Torvalds out classes MSFT’s best and brightest in his basement, for free (or wherever it is that he works– the local Starbucks).

  12. “Most new gadgets are targeted at people like Mr. Beattie, who are early adopters.”

    That’s an excellent point. And poses a substantial dilemma for companies like Apple. It’s very difficult to introduce innovative “blockbuster” type of products without the approval of the early adopters, and yet their appreciation of the product is significantly skewed. I explored some of this in another article:

    “The Hit Parade: Hollywoodization of gadgets”

  13. I think you can also look at this from the perspective of the product life cycle and “crossing the chasm”. Most new gadgets are targeted at people like Mr. Beattie, who are early adopters. These people prefer the open platform that they can do anything with.

    Mainstream customers have very different requirements. They want something that is reliable and easy to use. They don’t require the varied and flexible functionality that an innovator/early adopter does — in fact, openness and excessive features may make a device too difficult to approach. These are the people that Apple is targeting.

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  15. Nice article. I think the evolution from the iPod to iPhone was inevitable and obvious to everyone. More and more music phones were coming out, and frankly, most people would rather carry around 1 device rather than 2. I know that as much as I love my iPods, I found myself carrying them less and less often. But I always had my phone.

    The iPhone filled that niche beautifully, but it also did something unexpected (to me at least). Within a day or two of holding the device, I realized that it was simply much more than ‘just’ a phone. Even more than just a ‘iPod/Phone/internet communications device” or whatever SJ’s term for it was. It is, simply, a mobile computing device. In my mind, it is the successor to the newton, and apple will NOT release a tablet of any kind right now. You’ve got 3 categories of computers: desktops, which you can’t take w you at all; notebooks, which are still quite powerful but somewhat portable; and phones, most of which aren’t thought of as computers (yet), but which are ultraportable. If I’m going to bring along a tablet, I’m going to put it in a bag…might as well bring along my laptop and have a real keyboard for productivity.

    What the iPhone isn’t (yet) is a mobile computing PLATFORM. It absolutely could be, but Apple is not allowing that to happen yet. Same thing with the iPod touch. That device could be so much more than just an iPod, but apple doesn’t want that to happen just yet. I hope they do eventually, b/c once people realize just how much computing power is in the phones and mobile devices they are carrying around with them, they are going to DEMAND that these devices be a flexible platform. If Apple doesn’t deliver it, someone else will, and I’ll be first in line to switch to that device once my contract is up.

  16. Thanks, Jorge.

    What’s also pretty funny is that they teach in Biz 101 for market leaders (Nokia) to never directly target newcomers (Apple). Some companies design elaborate campaigns just to catch the leader’s attention and thus hope to elevate their own status to somewhere near the top. Remember what Real did with its silly campaign targeting iPods/iTunes a while back?

    Yes, Nokia is not directly targeting Apple here but the message is clear to anyone following the industry.

    As you say, Nokia is at a disadvantage here since it doesn’t have its own OS. And if it doesn’t have as good an interface as the iPhone, can its phones be considered “the best devices” anyway? Dicey proposition.

  17. Awesome article!

    I don’t like the iPhone or iPod touch as closed, specially since the iPhones native apps grew so much in so little time. But Apple is threading on new territories and makes sense to be cautious. New hardware + new software= new risks. It’s in our nature to want to eat the whole world in a single bite, but it is also in our nature the dangers of indigestion.

    And the Nokia ad just makes me laugh! Sure, they’ve got games, and java apps and such. But NEVER, and I mean EVER, have they made a product or platform that sparked such a speedy spontaneus spring of sofware (excuse the aliteration) from developers of every kind like the iPhone did. Exploiting perceptions is a market practice I know, but it is also a shameful one when you’re lying.

    Nokia used to make the best cellphones, and they were just that: cellphones. Extremely closed and limited. And yet they were extremely succesful. Now that they are “opening” up they are having a hard time. By the wat, if you analyze all cellphone offerings, they all hace something “closed”, and that includes closed to acceptance by the public.

    Anyway, excellent article!

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