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Of Vertical Integration, Platforms, Apple & Google

Chris Dixon has an essential post today on Samsung and the tough choices they face going forward with regard to support for Android.

I’ve been thinking about this from a slightly different angle — the battle between Apple and Google, the competing visions they each bring to that battle, and the implications for mobile application developers.

Both Google and Apple have at heart a vertical integration strategy for their mobile efforts. For Apple, the focus is on tight integration between hardware which it controls and iOS, its mobile operating system, with the goal of making big profits from the sale of their hardware.

Google’s approach involves tight coupling of it’s OS (Android) and a services layer it controls (search, but also Maps, YouTube, email) with the goal of making big profits from those services.

For Apple, the operating system and the developer ecosystem it has built around it are simply a means of driving sales of more devices, and making more money. In that way, it could be said that the interests of Apple and most third-party developers are complementary.

For Google, the operating system and the developer ecosystem it is trying to build are a means to drive adoption of their core services on mobile devices. In many ways, their approach more closely resembles the path Microsoft took in the 1990s. And that path did not end well for most applications developers, as Microsoft expanded horizontally into a wide range of applications in order to make more money even though they made piles of money from Windows. Google, which makes no money from Android, is totally dependent on revenues streams from services; it stands to reason that they will have to be even more aggressive in their services efforts, expanding laterally into many different verticals.

Some alpha geeks complain or worry about Apple being too “closed.” That may be true in a limited and rather literal, way. But if you’re a third-party application developer, one could argue that in fact their ecosystem is more open to third-party developers than Google’s in that Apple is less interested in services for the reasons cited above. They’re dependent on third-party developers being successful, and supporting their platform, in order to make more profits from hardware. In other words: Be careful who you root for.

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One thought on “Of Vertical Integration, Platforms, Apple & Google

  1. Pingback: The Moat Around Apple’s Castle? « MHALLVILLE

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