Entries in Google (1)

Sunday
Jan102010

Blodget on Apple's impending thrashing by Google ...

A friend sent me a URL to Henry Blodget's recent post in the Silicon Alley Insider, with the the cover question... Is this really going to happen? Is Apple about to get steam-rolled?

The premise of the article is that by the end of the 1990s, Apple had came close enough to landing in the Deadpool of Hell that they picked up souvenirs.

What was (Apple's) mistake?

The insistence on selling fully integrated hardware and software devices, instead of focusing on low-cost, widely distributed software.

Yes, Apple also made other mistakes--most notably, maintaining a premium price point, ditching its famous founder and spiritual leader, and developing clunker products. But the mistake that doomed its primary business, the Macintosh, to niche status was the insistence on maintaining complete control over every aspect of the product while Microsoft drove for software ubiquity. ...

It seems much too premature to make this comparison. And, as smart as Henry Blodget is, I'm surprised that this article reduces the competition to a single dimension.

Google will definitely be the big competitor in many markets, but Apple is not 'just insisting on selling integrated hardware and software devices', rather than focusing on low cost distributed software...

What this article does not take into account is how Apple used their high-quality, high-margin integrated products to create service businesses, and particularly content businesses that have (in the same 10 year period) completely changed the added value mobile service market and (.... wait for it ...) the recorded music business... and made a boatload of money in the process.

Google is going to have to capitalize on the Android platform in some very smart ways ... They will get a lot of ISVs and OEMs to use Android, but they have to make serious service and/or content revenues on the result. Maybe it's ebooks... Maybe they become the conduit that truly changes the 20th century model of newspaper and magazine publishing. ... Or perhaps (and I'd believe this) they actually get augmented reality right, and, in combination with their location-based information, turn the Android smart phone into everything from the Yellow Pages to turn-by-turn in car navigation to location based e-commerce. (I have visions of a Craigslist overlaid on everything from virtualized garage sales to real estate.)

I suspect that Apple, in the meantime, will be taking aim on becoming the preeminent conduit for video entertainment content -- television and movies. Apple may also go after 21st century hybrid publishing (... multi-media publishing done right). And, if I had to guess, this is where Apple and Google will go head-to-head.

There's no doubt in my mind that Google can capitalize on Android in a big way. But, Google is just as much at risk of becoming what Microsoft became in the realm of mobile handset platforms. (Remember Windows Mobile? ... Face it. WinMo sux and always has.) MSFT's ability to own a consumer content delivery has not exactly set the world on fire. So, if one follows the analogy, Google runs the risk of creating a platform for its partners that becomes fragmented and therefore becomes a nightmare to support.

(As an aside: Where has Microsoft succeeded? Well, the Xbox gaming platform could very well be described as a fully integrated hardware and software device, supported by a closely integrated networked service.)

Sorry, Henry. Your line of reasoning is too unidimensional, and SO 1990s. Creating a success based on a product platform is about content distribution and service delivery. Retaining the 'appropriate' amount of control and close integration is the challenge for both.