Five Years Too Late

January 29, 2010

iPhone vs. Android vs. Mac vs. PC

Filed under: Uncategorized — fiveyearstoolate @ 10:58 am

Eric Wiesen

This post has been rattling around in my head for a while, but Chris Dixon’s always excellent blog inspired me to put this down and get my thoughts organized. Chris talks about whether or not the “open vs. closed” question about app store environments is as simple as it seems. I’ve been thinking about two things in this general vein over the past few weeks (really ever since the Nexus One came out).

  1. iPhone vs. Android” is not really like Mac vs. PC
  2. Why Mac vs. PC played out the way it did is badly misunderstood.

I’m actually going to take them in reverse order, because the second sets up the first.

Everyone knows that for most of the lifecycle of personal computing (let’s just call it 1980 to 2010) Apple and its Macintosh platform got its ass kicked by a collection of offerings known as “the PC”. The PC was an assembly of interoperable parts with an Intel CPU (and compatible system chipset) running a Microsoft OS. Apple’s market share typically fluctuated from bad to worse and generally declined the first two thirds of this period.

These days most people talk about how Apple lost because it was “closed”, while PCs were “open”. I think that’s simplistic. There are a bunch of reasons why Apple lost for most of this period.

1. The “PC” had several important applications in the 80s and 90s. They were used in homes, in schools, in government and in business. One of these markets (business) was dramatically larger than the others. Which company had a vendor relationship with essentially every company in the US who bought technology? IBM. Which company was the original vendor of Wintel PCs? IBM. In the early 1980s when the “PC Wars” began IBM was the largest technology company in the world and Apple was a startup. The PC won the early rounds because their distribution into business accounts wasn’t just better, it was several orders of magnitude better.

2. Apple arguably gave up its best weapon in 1985 when Steve Jobs was fired. Chris notes this by looking at Apple’s market cap in 1985 and then in 1997 when Steve returned and finally today and illustrates just how little value was created at Apple without Jobs. Apple was phenomenally innovative in the early days, then released a decade’s worth of boring products (with a few exceptions, like the original PowerBooks) and then started innovating again in the late 90s (the original iMac, the iPod, iTunes, etc…). Apple lost in the middle rounds b/c it was poorly run.

3. When people consider the Mac vs. PC question today it’s largely a question of a premium product versus an ordinary product. You can get better specs for less money on the PC side, but most people agree at this point that Macs run better, are more secure and are more enjoyable to use. A point that gets (badly) forgotten is that for a long stretch of time (let’s say 1990 to 2000 just to use round numbers) Macs were awful. They were 2x the price of equivalently powerful PCs, ran buggy operating systems and had essentially no software available unless you were in the graphic arts business. Apple lost because the product sucked.

4. And yes, Apple lost because they had implemented a proprietary set of choices. Apple had their own bus for cards. They used SCSI hard drives instead of IDE. They rolled out Firewire while others were rolling out USB. Their peripherals all used Apple Desktop Bus instead of commodity PS2 ports. And this meant that Apple’s hardware was more expensive. True. I list this 4th out of 4 because I think this only hurt them so badly for the other reasons listed here. Apple was a company that produced products that were simply priced as premium products but didn’t perform. If NuBus, Apple’s proprietary (not really, but no one else used it) 32-bit bus really was better than PC’s ISA cards (it was for a variety of reasons) users would have been fine with it. And they were, for a while. But then Apple stopped innovating and all of sudden PCs had PCI which was just as good. So the price difference wasn’t justifiable anymore. SCSI hard drives actually were much better than IDE for a long while, until they weren’t. The PC “organ bank” followed exactly the Christiansen-like progression that Chris alludes to: it undershot customer use cases, then improved faster than their needs. Today the collection of standards that make up the PC are fine for virtually all needs. And it should be noted that for the last several generations of this, Apple has also recognized the reality of it and no longer uses many differentiated hardware standards. Note also that it took Steve Jobs’ return to effect this change.

Looked at today, Apple isn’t losing the “Mac vs. PC” war anymore. Apple has been gaining market share for years and does so with greater profitability than any PC vendor. Last time I checked, Apple was around 9% of new PC shipments. That’s a great market share for a premium products company (compare to Mercedes-Benz. Or Gray Goose. Or All-Clad.) Its market cap dwarfs most PC companies and is on the same plane as Intel and Microsoft, both of whom are in what should be inherently more profitable businesses.

Apple lost the first 10 or 11 rounds of the PC Wars because they had an inferior starting position, were poorly run and produced mediocre products for most of the war. Once they fixed management and started producing great products again they immediately began gaining share and making a lot of money. And yes, they also began to use commodity hardware, so there is an “open vs. closed” coda to this story, but I don’t think anyone really argues that the resurgence of the Mac is primarily the result of using Intel processors or SATA disks.

The second big piece of what is turning out to be a very long post is the question of whether iPhone vs. Android is going to follow the same playbook. I’ve said at the outset that I don’t think it does, and the rationale maps pretty closely to the reasoning above. I don’t think the same set of conditions are at all present here. Apple isn’t starting from a weak position. They aren’t poorly managed and they are producing excellent (although certainly not perfect) products in the iPhone, iTunes, the App Store and now the iPad (about which I’m generally unenthusiastic, but that’s not the purpose of this piece). So the dynamic that remains is – will they lose because they are “closed”?

There are two ways one can make this argument. The first is that Apple will lose because the App Store itself is “closed” insofar as Apple approves their apps. I think this is a relatively poor argument. Good apps will get approved. Is it a pain in the ass? Yes, definitely. Do consumers look at the iPhone and say, “I’m not sure I want to buy that because developers have to go through an annoying approval process”? No. Definitely not. Are developers going to refused to develop for the iPhone/iPad platform with it’s fifty million and growing users because the approval process is obnoxious? I seriously doubt it. On the flip side – are there going to be a bunch of crappy apps and security problems on Android because no one is curating which apps get in and which don’t? I’ll bet there will be.

The second piece of this is that Apple will lose because the iPhoneOS itself only runs on Apple hardware rather than on an ever-growing range of Android devices. I think this is the far stronger argument. Android is going to have a lot of different form factors and markets as different hardware vendors integrate it. And so from that perspective I do think there’s a pretty good chance that it winds up in all kinds of interesting places that Apple won’t ever go, like cars or CE devices or other single-purpose personal gadgets. What I also think is that each of these will have little “quirks” as each Android environment is a little bit different and as people find different ways to expose it. And so some apps will work well on some devices or poorly on others. And generally speaking users will have lots of choices but it will also be work and will require research and customer service involvement. In fact it will look a lot like … a PC.

What I think iPhone vs. Android really looks like is Mac vs. PC TODAY rather than ten years ago. Today Apple produces high-functioning tightly-integrated products that people really like. But you are limited to those devices Apple chooses to produce. If you want a netbook, you can’t buy one from Apple. You want a phone with a physical Keyboard? Apple isn’t going to help you. And if I’m Apple, I’m perfectly fine with this. I’m perfectly fine if I sell 30 million iPhones a year and tons of 30% margin media and apps. Who cares if Google is giving away Android on 100 million cars? Apple can be a big profitable company by releasing terrific products for those who care to have the simplicity, style and curation Apple brings to the table. I’d argue that’s what they’re doing now and it’s working pretty well.

I think ten years from now there are more Android devices than iPhoneOS devices. Probably a lot more. But I don’t think that means that Apple will have “lost”.

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38 Comments »

  1. Solid post. Completely agree.

    Comment by Charlie Kemper — January 29, 2010 @ 11:16 am

    • I totally disagree

      Can we stop talking about the past and look at the present
      It was all of Apple/Macintosh’s mistakes that made it the computing company it is now
      The best computing company in the world
      Thank You

      Comment by MacFanatic — April 17, 2010 @ 8:25 pm

      • And Apple will always be the best

        Oh and Thank You again

        Comment by MacFanatic — April 17, 2010 @ 8:28 pm

      • I also agree this is a very solid post and well put. Apple is a tremendous company and there are always winners and losers in people’s opinions. As much as I love them there will always be a place for a PC of some form in my life firstly as they have just too much use. They are simple to operate (for me at least) as I’m so familiar with them, warts and all but even the warts are kind of beautiful. A PC is like a Swiss army knife of the media world which always finds a good use and just keeps reinventing itself or an ugly mungrel dog that you could just not part with.

        I feel this is coming across into to mobile world now with iphones and the android type devices. It is what these tools can actually do for us is what I am in love with not the actual devices themselves. However some of the things apple create are objects of ultimate desire and they bring innovation and pleasure to the experience but as a consequence they are expensive, limited in certain aspects and not always the most useful, but again even this is part of their appeal. They are extremely successful at what they do.

        Comment by Edward Davies — August 15, 2010 @ 4:23 am

  2. And if Steve Jobs dies?

    Comment by jdrive — January 29, 2010 @ 12:05 pm

    • Unclear what happens then. He is clearly a huge part of why Apple works. I probably should have prefaced all of this by saying that, and that all bets are off if he leaves the company for whatever reason.

      Comment by fiveyearstoolate — January 29, 2010 @ 12:28 pm

  3. Fantastic post.

    I particularly enjoy point #1 from a marketing perspective. It’s the “nobody ever got fired for buying IBM” idea that drove a lot of that adoption–which can be attributed to FUD (fear, uncertainty, doubt) selling tactics, good branding, or both.

    Comment by Bennett Morrison — January 29, 2010 @ 12:25 pm

  4. [...] iPhone vs. Android vs. Mac vs. PC « Five Years Too Late [...]

    Pingback by Flash Player 10.1 on Google’s Nexus One | AboutGadgets.info — January 30, 2010 @ 6:20 am

  5. On the enterprise side, I wonder what the more open nature of the Android system means for adoption. Apple said recently that a ton of F500 companies are testing the iPhone for enterprise use. I’d be very surprised if the highly paid CIO/head IT guys at these huge companies hand the programming keys over to Jobs & Co.

    Comment by Jason Adler — January 31, 2010 @ 10:27 am

    • Jason – the enterprise side is a very interesting question. I don’t doubt that lots of big companies are looking at the iPhone as a terminal of sorts for various purposes.

      But I don’t entirely agree with your premise that Apple’s current requirement that all apps be approved constitutes “handing the programming keys over”, unless you’re talking about the sandboxed nature of the iPhoneOS. As of today, it’s true that enterprise applications will have to live within the limitations of Apple’s environment.

      That being said, if Apple is committed to enterprise deployments (and it’s unclear today if they really are), I think we should expect to see some changes for those accounts. One would expect that if a Verizon or Wal-Mart or P&G wanted to roll out iPhones (or more likely iTouch or iPad), there will be an enterprise agreement to be had with Apple that modifies the app update process and perhaps some of the development limitations (I think the former is more likely than the latter).

      it will be very interesting to see.

      Comment by fiveyearstoolate — January 31, 2010 @ 10:54 am

  6. I think something very important to watch out for is the future of Apple’s relationship with AT&T. It’s another example of Apple’s “closed” model – but sort of in reverse. I am one of the people for whom AT&T’s sub-par service is a major barrier for me to switch from Blackberry to iPhone once it’s time to get a new phone.

    Comment by Tim — January 31, 2010 @ 12:08 pm

  7. Great breakdown, Eric. On the topic of the App Store vs. Android, I agree there likely will be glitches on the Android Market side. SAI actually has a good story today on several issues with it… and they are actually well-observed details of what Apple has gotten right in the value chain and end-user workflow. http://www.businessinsider.com/10-ways-to-fix-googles-busted-android-app-market-2010-1

    Comment by Roy Rodenstein — February 1, 2010 @ 1:03 pm

  8. Great post… enjoyed reading it.

    Comment by Jim — February 1, 2010 @ 5:28 pm

  9. Nice post, you’re totally pro mac though.

    Comment by Andy Nguyen — March 23, 2010 @ 9:43 pm

  10. iPhone versus Android.
    http://iphone-versus-android.com
    Pick your favorite and see if you’re on the winning team!

    Comment by wevolve — April 6, 2010 @ 3:49 am

  11. [...] Lesestoff: … What I think iPhone vs. Android really looks like is Mac vs. PC TODAY rather than ten [...]

    Pingback by iPhone vs. Android vs. Mac vs. PC | blog.volkerdaschner.de — April 22, 2010 @ 4:04 am

  12. totally disagree. mac doesn’t “work better” because its a premium product. it works better because its a closed system. it is not more secure, it is simply such a small market share comparatively that less people are writing exploits for it. iphone:android::mac:windows is the age-old battle of closed vs. open. i will always prefer open.

    Comment by Cal — April 30, 2010 @ 6:29 pm

  13. [...] Posted on May 2, 2010 by moserme7 Today I was reading an article that discussed the constant battle between Apple and their competitors. The new battle between the companies is the iPhone vs the [...]

    Pingback by The New Apple vs. Competitors Battle | Mac vs. PC — May 2, 2010 @ 12:15 am

  14. I love free stuff google provides. Search, Mail, Youtube, Chrome, Google maps, navigation, google earth, Google voice, Google goggles etc etc. All of these are world class and no competitor comes even close(except for firefox maybe). Who cares if I have to give up privacy to enjoy all these free stuff. What does Apple have? A shiny toy with a very high entrance ticket to enjoy best things Apple provide. No thank you. The best way to enjoy free stuffs google provide is an android device or chrome OS device. I suspect 100s of millions think like me. The few measly tens of millions can keep their shiny toys. I am not an investor. I am a consumer and I like free.

    Comment by Bob — June 9, 2010 @ 6:39 am

  15. The latest survey from 1500 women, showed that men who have the iPhone more attractive than those without. While women are often rejected by the man who has a Palm Pre.

    According to a survey conducted by Phones 4U, an online seller of the iPhone and other mobile devices, as many as 54% of women stated that they prefer to date a man who has an iPhone. source : http://link2mobile.blogspot.com/2010/06/plumpness-girls-want-to-dating-with-men.html

    Comment by link2mobile — June 15, 2010 @ 11:57 pm

  16. Yes, and there is a debate on this at The geekpub where I think people might be willing to murder over it:
    http://www.thegeekpub.com/641/macs-rule/

    People were calling each other names (like Windouche and MacFag). I don’t understand why people can’t come to the conclusion this stuff is just different, and it doesn’t make a you douche for liking one over the other.

    Comment by Peenwheedle — June 17, 2010 @ 3:54 pm

  17. I agree totally.
    This is exactly how I see it.

    As far as I can tell, Apple never really “lost” the desktop war either.

    One thing I will predict though: Apple will be bigger than Samsung, Motorola, HTC etc. In other words, Apple will continue to sell more iPhones than any single Anroid maker.

    So which would you rather be, HTC or Apple?

    Comment by Dale — August 10, 2010 @ 12:44 pm

  18. Android kicks ass! Its already outselling thr iphone ….

    Comment by debbie — August 22, 2010 @ 11:41 am

  19. Great work.!!:)

    Comment by prakash — October 12, 2010 @ 6:45 am

  20. From the consumer’s perspective, android products are easier to own. From market’s point of view, apple’s products have an edge. As long as apple continues to provide innovations, it ll be ahead from the rest.

    Comment by Dampi — November 13, 2010 @ 10:39 am

  21. Linux is a thousand times more stable than mac. The web servers are linux, no mac.
    Mac is a linux with enhanced graphical user interface and customized hardware. And a machine to make millions.
    The world’s best operating system for free, that’s your only problem.
    We open their eyes.

    Greetings.

    Comment by José - Hacer una Pagina — November 26, 2010 @ 1:12 pm

  22. There is nothing really wrong with PC’s it’s the Microsoft operating system that is so badly designed and painful to use. Once you use a Mac it really is difficult to return to MS software. Apple ownership has nothing to do with looking good or because everyone else has one and the price isn’t that bad when compared like for like. It seems to me that cheapskates buy PC’s and then feel inferior to Mac owners. They need to get over it.

    Comment by Jane Davies — March 29, 2011 @ 4:25 pm

    • I think you hit the nail on the head =)

      -ex PC user

      Comment by csselement — May 31, 2012 @ 2:14 pm

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    Comment by Apple iPhone 5 — March 8, 2012 @ 3:14 am

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    Comment by Apple iPhone 5 — March 8, 2012 @ 6:14 am

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    Comment by Anonymous — June 10, 2012 @ 5:43 am

  26. I prefer PC and also Android. I also have Mac myself and once had iPhone, but for some reason I just can not get used neither of those. I can not say anything bad about Mac, it’s easy to use and so on, but about iPhone… nothing good in my opinion. In my opinion it’s just a gadget for people with lots of money. I truly prefer my HTC to iPhone. It’s cheaper, easier to use, it has bigger variety of software and It has MUCH better specifications.

    PC and Android all the way. I’m probably never going to use iPhone again, but about Mac- great product, but doesn’t beat PC. :)

    Comment by Jaanus — June 23, 2012 @ 8:34 am

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  29. Agreed.

    Comment by psychologist marriage — September 29, 2012 @ 10:32 pm


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