Apple’s staggering Q3 reports might allow them to buy Dell twice and still have a boatload of cash in reserve, but they’ve got a real ecosystem and strategy problem.
The Q3 profits were driven by iPhone and iPad sales; needless to say, the post-PC advocates got statistics to back their assertions. Mobile computing is Apple’s strength. Powerful Macbook Pros, lightweight Macbook Airs, iPhones and iPads are industry-defining products –but let’s focus on iOS devices in particular.
The growth of mobile phones has paralleled the rise in social computing. Updating Facebook and Twitter streams with text messages or pictures has made using smartphones a part of this real-time sharing experience. Some of the most talked about mobile applications are social. Services around photo sharing, status updates and location have seen explosive growth. This has largely to do with the phones we have.
Microsoft’s Windows Phone 7 platform has native integration with Twitter (in Mango), LinkedIn (in Mango) and Facebook. The phone allows a user to upload images to Facebook in a click and Twitter in two. The Mango update has Facebook Places integration, allowing users to check in where they are. Then there is Bing Maps, Microsoft’s mapping service. In Mango, Bing will introduce a Yelp-like feature allowing you to find events and places to visit near your location. These are native features tied to Bing. When you add Nokia’s Navteq to the equation, Microsoft is now a strong player in location and navigation on the phone.
Google’s Android has quite a few of its own exclusive features (Google Wallet, Google Maps and Google+). Microsoft has a steady relationship with Facebook and Twitter, two popular social networks. Google decided to come up with its own social network. Google+ brings Picasa (photo sharing) and Latitude (location) – two widely used social features – to the phone. These are Google’s own services. Even though Google+ is an app on Android, native integration across the platform is not rocket science.
Apple, on the other hand, doesn’t have its own social network or location service. One could argue iCloud offers photo sharing, but I think it is not similar to Facebook or Picasa. Twitter should not be considered as Apple’s social layer since it is not exclusive and Microsoft has similar integration in WP7 Mango. When it comes to mapping, Apple is relying on their new rival – Google. Apple does not have any advantage when it comes to social computing. This brings me to Apple’s strong quarter driven by their mobile devices. The Google+ app on an iPhone and Android’s strong integration with Google services will at some point make a consumer think about Android or maybe even Windows Phone 7. Both Microsoft and Google have robust services around cloud computing, too; this negates any possible advantage Apple has with iWork.
Robert Scoble keeps bashing Windows Phone 7 for the lack of apps. He’s not talking about proprietary Apple apps, but those built by third-party developers. These developers can change loyalty whenever they want to. (Foursquare’s notification tray update was an Android first.) Apple’s advantage of third-party apps is a weak thread for Apple to rely on since they do not have any social ecosystem of their own. What makes this worse is Apple’s strained relationship with Google. Depending on an enemy makes you vulnerable. If Apple’s mobile sales start dwindling and Jobs retires, that stock price won’t be as awesome.
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