Thursday, December 6, 2012

The Digital Land Grab

Apple have often been criticised for their closed ecosystem; the so-called "walled garden" that discourages cross-platform inter-operability. However, developing an ecosystem where the hardware and software is strictly controlled and designed to work together, and where different devices seamlessly connect and interact,  has paid off for Apple, and Microsoft and Google are quietly developing ecosystems of their own. The table below shows the devices each company has developed in an effort to take over your digital life.

 I could have included other companies, like Samsung and Sony, but they mostly run licensed operating systems on their devices. There is a certain degree of cross platform inter-operability between these devices. For example, there is an iOS app that gives remote functionality for the Google TV, and it is still possible to run iTunes on a Windows machine, and thus stream video to an Apple TV via AirPlay.  Apple tends to develop proprietary standards, making it impossible, for example, to stream video from an Android device to Apple TV. Apple does this for 3 reasons:

  1. Security - Apple is very careful about allowing other devices to connect to its ecosystem, thus preventing viruses from spreading.
  2. The Halo Effect - Building on its huge iPhone user-base  Apple can promote their complimentary devices which further enhance the user experience.
  3. Licence fees - Apple can collect licence fees from hardware manufacturers looking to incorporate features like AirPlay into the devices.

Google takes an almost opposite view, and promotes the use of open standards which allows other hardware manufacturers to easily build devices that interact with each other within the Google ecosystem.
The reason for this is because Apple and Google have very different business models. Apple make premium hardware devices, and make their profit from the huge margins they charge. On the other hand, Google make most of their profits from advertising, and anything that gets people online is to their advantage. However, this seems to be changing. With the success of the Nexus 7 tablet, and more recently the Nexus 4 mobile phone, Google are reportedly looking into sourcing their own Chromebooks to complement those already made by Acer and Samsung.

Microsoft is traditionally a software company, and except for the Xbox, their previous attempts at hardware have ended in failure. Both the Zune (mp3 player) and Kin (phone) were short-lived. With the Surface, Microsoft are making an aggressive attack on the tablet market. Time will tell if they are successful or not, but Microsoft are worried. They are seeing their traditional business being eroded from one side by Google, and from the other side by Apple. Google are offering free web-based alternatives to the MS Office Suite, and the Chromebook could eventually challenge their dominance in the PC market. At the same time, Apple's iPad is being seen as an alternative in the post-PC era, and there are many productivity apps in the App Store that also eventually offer an alternative to Office. The Apple Mac is also showing some growth in an otherwise shrinking market. Microsoft therefore feel they have to develop their own ecosystem, and try and find new profit channels like apps from the Windows Store, and subscription services like Office 365.
This 3-way battle is essentially a land grab, because all 3 companies will try and lock users into their respective ecosystems. Apple is leading at the moment, Google has the most flexibility, and Microsoft has the most to lose.

I am a huge fan of Google, and have been a longtime Windows user, but ever since I switched to an iPhone I have been drawn further and further into Apple's "walled garden"; I now have an iPad 3 and a latest generation Apple TV. I have been hugely disappointed in Windows 8, so I'm now considering switching to one of the new iMacs as my main home machine. I still use Gmail, Google Calendar, Google Docs, etc, and I will continue to use my 18 month old Windows 7 laptop until I can afford to replace it, but more and more I look to Apple for my digital fix. Which ecosystem do you use?

Thanks for reading.