Why 2011 isn’t 1995 for Apple

In 1995 I remember waiting in lines to buy Windows 95. It effectively ended the design lead Apple had for 11 years in personal computers. From then on Microsoft had both the thought leadership and the market share. Apple ended up with less than 10% market share. Microsoft had most of the rest.

Lots of people think that Apple could repeat 1995 in 2011. This time with iOS instead of Macintosh OS and with Google in the place of Microsoft.

We forget one little thing: 1995 was different.

Here’s how.

In 1995 Microsoft had a HUGE marketshare lead with DOS. That meant it had a huge army of developers who didn’t want to switch over to Apple’s system, which they saw as very closed and inflexible. I remember developers coming into the consumer electronics store I helped run in the 1980s and they’d complain bitterly about Apple’s policies (Apple was far less flexible back then than it is today and forced developers to fit into a “look and feel” set of guidelines).

But I look at who is making money. Back in 1995 developers were mostly making money from DOS. Remember, this caused WordPerfect and Borland to make bad bets. They bet on DOS for too long, while Bill Gates went and built some of the first and best Macintosh apps. The lesson, though, doesn’t pass from 1995 to 2011. Today where are most of the developers making their money? iOS (according to Sephora, Starbucks, OpenTable, eBay, and many other developers). So, Android has to convince developers to switch, or do both platforms at same time. That’s quite different.

Plus, back in 1995, who owned the best distribution and supply chains? Microsoft did. Today? Apple does. Apple didn’t have stores back in 1995 which will ensure its products get seen in the marketplace. Back then Microsoft could outspend Apple for shelf space at Frys and other retailers. Plus, Microsoft’s model of having many OEMs building hardware for its OS was far superior to Apple’s approach. Today that’s not really true, because the OEMs aren’t really able to bring that much value to the table and Apple has the best supply chains in China locked up (I visited one of them about two years ago and keep in touch with the folks there and that’s still the case). So, it’s not very likely that a Google phone will ship with better screens or better materials. At least not in volume. That is a huge difference from 1995 to today.

Other differences? Apple has outspent Microsoft on Advertising around the world. Look at this picture. It’s in Paris subway. Apple bought every square inch of advertising space (it bought the entire subway system’s advertising space, it seemed, iPad ads were plastered down the entire trackway). Google isn’t able to get its message there. That didn’t happen in 1995. Remember how dominant Microsoft’s advertising was back then? Microsoft even convinced the Empire State Building to change its colors that evening.

Let’s go back to how closed Apple is. Most apps this month got approved in less than a week. Some even got approved in less than four days. During the Christmas rush. Is this as good as Android’s (you can ship in minutes) policy? No. But, on the other hand, there are quality controls which consumers appreciate. The apps — overall — ARE better on iOS than on Android. Just check out TweetDeck. It crashes every few minutes on my Android phone. Twitter isn’t nearly as nice. Facebook isn’t as nice. And most apps aren’t as well designed, nor crash resistant, as on iOS.

I am sensing a switch, though. Fred Wilson is leading the charge. But other developers are grumbling about Apple and want there to be an alternative and they are all comparing notes with each other. “How’s Angry Birds doing with its advertising-only Android apps?” they ask. Very well, the answer comes back. So that means more developers will take the bet on Android, but so far I haven’t seen many go “Android only.” Why not? Because they know most of the PR comes from journalists who use mostly iOS devices and most of the best users are on iOS devices too (Sephora’s lead mobile developer told me 80% of the users who pull out a mobile phone in her stores are using iOS, that is echoed by nearly every developer I talk with). Even Swype, which has been kept from delivering their keyboard on iOS devices showed me a prototype of it running on an iPad and the inventor whispered “if Steve Jobs wants to talk, we’d love to ship this on iOS.”

So, when someone says that Apple is repeating the mistakes of 1995 (yes, I’ve been guilty of saying that in the past couple of years too) you should tell them that 2011 is not even close to the same set of conditions as 1995 has.

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iPad is Amazing: new Apple ad touts iOS 4.2 features

December 2 2010 by admin in Apple |

Apple is promoting new features of the iPad enabled by the free iOS 4.2 update in a new commercial named “iPad is Amazing.” ic_BeSocial_Buttons()

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Is the tech press needed anymore? (how Apple iPhone apps take off now)

Datapoint one: John Gruber is noting that Android doesn’t have very many of the industry’s best apps.

Datapoint two. Starbucks CIO says that he’s forced to use HTML 5 to support Apple iOS users, because they represent the majority of folks using mobile devices in their stores.

Datapoint three. SlideRocket is forced into HTML5 land (they used to be all Flash) because of pressure from iOS users.

Datapoint four. Instagram got 100,000 users in less than a week (now rumors are that they’ve gotten more than a million users in first month).

Datapoint five. Mobile app developer HighFive Labs (they’ve built 15 apps, including Mario Batali Cooks) tells me they are staying iPhone only for a while.

Datapoint six. Just yesterday Sam Feuer, CEO of MindSmack, told me his app, FastMall, was just put to the top of Apple’s iTunes store and is getting overwhelming demand. When I interviewed him a few weeks ago he told me he already had 250,000 downloads just because he was included in the featured list on the store.

I’m featuring FastMall’s video on this post (watch the video of its CEO in its New York headquarters), because he is at the top of the iTunes Shopping recommendations and because his app will help you get around shopping malls. I’ve used it a few times already to find out where to park nearest stores I need to visit and also to know how to find the store I need inside a mall.

Add into this lots of other anecdotes from companies like Zagat (they say iPhones are outselling all other platforms), Sephora (its webmaster told me that 80% of all mobile app users who come into their stores are using iOS devices), eBay (its mobile chief told me most of the mobile commerce done is on iOS devices), OpenTable (its mobile chief told me most of the restaurant reservations it’s seeing done on mobile devices are being made on iOS devices), AngryBirds (charges for app on iPhone, but giving it away on Android), and PayPal (investing heavily in apps to “bump” money from person-to-person). I could keep going, but there’s somethings going on here which are worth talking about.

1. There’s a common belief that Apple users are buying apps, while Android and other platform users aren’t.

2. There’s a common belief that Apple users are trying more apps per device.

3. There’s a common belief that Apple users are “better” for monetizing, because they are spending more money per device at retail.

4. There’s a common belief that Apple’s platform is best to develop on. Yes, some, like Swype, are on Android, not on Apple. I interviewed them here and their new keyboard is remarkable. What you didn’t see in the interview is that they told me off camera that they really wanted to be on Apple devices and they showed me it working on both iPhones and iPads, but are kept from shipping by Apple.

5. There’s a common belief amongst app developers that Apple’s iPad is going to be untouched in next six months.

6. There’s an understanding that Android is selling more units, but those users are less likely to buy apps, less likely to try apps, and that they have fewer methods of virally pushing apps. iOS, on the other hand has several systems to help you discover apps. My favorite is Chomp, interview here, but the others are quite good too, like Appsfire, and Appolicious. Android has GetJar, but that’s not an Android-only store.

7. App developers tell me they like being featured in Steve Jobs’ keynotes, on Apple in-store advertising and demo stations, and on commercials. That’s a stick that other platforms can’t offer developers.

So, what’s up with the headline I picked for this blog?

I’m noticing that lots of app developers are seeing HUGE adoptions without being pushed ANYWHERE but on Apple’s iTunes app store. That’s how MyTown got so big. It’s also how Instagram got so popular so fast. FastMall’s CEO told me that’s where almost all of its users came from.

Do app developers need the press anymore?

They tell me yes, but not for the reason you might think.

What’s the reason? Well, they suspect that Apple’s team is watching the press for which apps get discussed and hyped up. Apps that get hyped up in the press get added to the feature list more often than apps that don’t, although, like with MyTown, that’s not always true. Press reports might be just one datapoint amongst several that they use to decide between apps to feature. FastMall, for instance, was featured on the front page of the New York Times’ technology section, but I think that happened only after Apple featured it. So, is the press leading, or following, Apple?

More interestingly, though, is the common belief amongst app developers that they’ll only get featured on iTunes if they remain supporting Apple’s platform only. Can the press counteract that? Sometimes, like when Angry Birds became so popular that even Android users heard about it. Instagram is using a different method to get “escape velocity:” each photo tweeted links back to Instagram and, also, users like me are pushing it everywhere. I’ve heard from a lot of Android users that Instagram sucks because it’s iPhone-only. Those vocal users, though, will be first to download it when it comes out on Android and will be first to say “yeah, Instagram finally got a clue and ported to Android.”

The other thing I’m noticing, by using services like Chomp, is that the tech press doesn’t really matter in my own app choices anymore. What does? My friends who try out apps and push them into my view. That’s the new tech press and influencers and app developers need to be aware of how to influence these networks.

So, what do you think? Do you look at the tech press for help picking out apps? Or do you just look at the featured list on iTunes, or maybe use an app-discovery service like Chomp, Appolicious, Appsfire, or GetJar?

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Android Market reaches 100,000 Apps, Apple still far ahead!

This tweet, from Android Developers’ official twitter account would bring a lot of joy to all Android aficionados and Apple haters out there. The Android Market reached an impressive tally of 1 Lakh Applications. The actual numbers for the Android Market have been an area of confusion, with the world having to rely on unofficial estimates from the likes of Androlib. The veracity of which is always an issue.

The figure by itself is impressive but pales in comparison to that of its biggest rival. Apple’s App Store is estimated to be closing in on 300,000 apps (over 280,000 at last count). While the two ‘Application Markets’ come from two highly contrasting schools of thought, they are in the same business – selling apps.

This is where the real challenge for the Android Market lies. It has a significantly higher percentage of free apps and lower revenue earning potential for developers as compared to Apple’s App Store. In fact, an article in the New York Times earlier in the week had a quote that summed up Android’s dilemma - “Google is not associated with things you pay for, and Android is an extension of that. You don’t pay for Google apps, so it bleeds into the expectations for the third-party apps, too.”

Personally, I’m not a fan of Apple’s closed Eco-system and I cant come to terms with a phone that doesn’t let me open it up. But the numbers make it very hard to criticize their ‘business model’. The idea behind developing applications for an eco-system is to earn money. It is very hard to do that with users who don’t expect to pay, and in the long run could represent a problem for Google’s Android. They will need to do a lot more than offering them free Google TVs.

In Fact, App store Analytics firm Distimo’s latest report on the App stores stated that number of free apps on the Android Market was 57% compared to 28% for the iPhone. The figures are based on data till June’10 and fall in line with the long term trend. Here’s a chart based on more recent data from Royal Pingdom, which estimates that percentage to have gone beyond 60%.

While the growth rate of the number of Apps is certainly impressive(Android Market has been around for just under 2 years) it is revenue generating potential that will rope in developers. On that count too, Apple has a clear lead.

Is Google’s ‘Give Stuff for Free’ policy hurting Android? Or will it finally catch up with Apple’s App Store. Let us know what you think?

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Categories: International, Mobile, News, Views, google
Tags: Android, Android Market, app store, apple, apple app store, Free Apps, free vs paid, google, ios, Paid Apps, revenue