Why Apple Has Already Won

Hopefully, after reading the title, you’re now thinking I’m an obnoxious Apple fanboy. In many respects, you’re not wrong. I’ll ask you to set that aside for a moment, though. I promise this post is objective (mostly).

Opening Thoughts

Let me start off by stating the obvious. Apple started first. Before the iPad, the next best thing was a netbook (yawn). Sure, iPhones were very popular, but there was a big gap between the phone and laptop form factors, and most manufacturers questioned the value of introducing a product in the middle. Before the iPhone hit the market, there were some stylus-based convertible laptops, but they never really captivated the market. Netbooks offered an inexpensive option with less power and smaller screens, in exchange for better battery life. However, they suffered from the same isolation problem that all laptops had prior to the App Store. Getting apps for a netbook is virtually impossible if you are not tech savvy. Knowing where to go to find apps for your netbook was easy for DIY folks with lots of free time to learn the intricacies of Linux. Common folks are not apt (pun intended) to use a command-line tool to install software on their device. They don’t know how a virtual machine works or why they would need Java to run something they downloaded from some dark corner of the internet. For them, it must be simple.

Ecosystem

If Microsoft is to have any success with their Surface tablet, they must offer an easy centralized way to find apps for people to buy, download, and use on their tablet. They can not rely on the hope that the user only needs word processing, web browsing, social networking, and photo sharing. They must offer customers the ability to find and easily install software that is not preloaded, software that is designed specifically for the device by a third party. Apple already has 6yrs of experience doing exactly that.

With over half a million apps, Apple has a more diverse collection of software than all other sources on the planet combined (I have no proof for this, but I believe it to be true), and it’s all available for sale in one place on every user’s device. More importantly, it’s a curated list. There are no viruses, spyware or malware apps, or even trojan horses. Apple has strict rules for publishing apps, and they’re very serious about security. Their policies promoted an ecosystem that attracted developers and customers in droves. Microsoft has yet to announce anything like this.

Developer Relations

The best hardware in the world with the most sophisticated interface and the cleanest, prettiest display won’t make a lick of difference if there’s no software to run on it. If you can’t inspire developers to publish apps on your platform, you’re dead before you ever take off. Apple was very wise to launch to developers first, before they ever spent a penny in consumer advertising. By approaching key developers from a wide variety of software genres (games, productivity, etc), Apple guaranteed that when it came time to launch a few months later, consumers would have a substantial collection of apps to browse. This included many popular and familiar titles from the desktop/laptop world.

Yes, it’s true that the very first iPhone launched with only apps developed by Apple, but remember we’re talking about iPad, not iPhone. There were over 200k apps on the App Store when the iPad launched. Today, there are over half a million. As of about a month ago, there were 883 titles available on the Xbox 360 (source: http://www.statisticbrain.com/xbox-statistics/). As a point of reference, there are over 90k iOS developers.

Marketing

Apple has always been masters of design and usability, but their real strength is in marketing. When they launch a product, they hold an event where they literally put it on a pedestal on stage, point a camera at it, and say “behold!” They highlight the feature offering, and give the audience just enough to get excited before moving on. Then, at the end, they tell you how much it costs and when it will be available. People stand in a queue for hours, waiting for the slim chance that the Apple Store will have enough iPads for them. Mock these people if you like (I do), but you can’t deny the statement they’re making.

Today’s Microsoft event, unveiling the Surface tablet, involved a lot of repetition. Balmer really seemed to want to hammer home how awesome this product is. The harder he tries to sell it, though, the less exciting it is. There are some interesting features being introduced with this tablet, but there was no mystery or magic in this launch. Plus, they didn’t bother to tell anyone when it would be available nor how much they would cost. This means people can certainly yearn for it, but they can’t start saving for it or planning their budget for it.

Conclusion

Microsoft has had plenty of opportunity to plan the “iPad killer” product that would shift the balance of the tablet space back toward the middle. They’ve seen three generations of iPads launched. They’ve seen the meteoric rise in sales figures that Apple publishes each quarter. They needed to do everything at least as well as Apple does, and they fell short. This is why they’ll always be playing catch-up, hoping to find that magic formula that inspires millions to buy their product, but never quite getting there.

The only thing that would change this analysis is end-user price. If Microsoft offers this device at $150-200, that would put it at or below the price of most Android tablets, but with better features. I expect the price to be closer to $400, which is low enough to beat the low-end iPad. Don’t be surprised, though, if they achieve this by cutting corners on built-in storage (4gb?) and hyping up the SD card slot.

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