Alex Watson
The penny seems to have dropped for Apple’s rivals and a flood of iPad-a-likes are inbound. So will we see a repeat of the 1980s PC vs Mac battles?
Despite the tens of millions of iPods and iPhones sold over the past four years, most hardware and tech firms appeared to be under the impression that the numbers somehow didn’t count. It’s Apple, and if the past 20 years has taught them anything, it’s that Apple doesn’t really matter.
A huge range of companies, from massive firms such as Sony to smaller Taiwanese outfits, have spent 20 years learning that when it comes to computers, they and Apple have a very settled relationship. Apple takes less than 10% of the market, with high-margin products that appeal to a specific audience of designers and the design led. Apart from a few visual cues, there was very little for a PC manufacturer to learn from Apple, because its market share was so consistent and its audience so distinct. This is the reason everyone from small Far Eastern firms to Microsoft comedian-in-chief Steve Ballmer has simply refused to believe iOS devices really are massively successful and disruptive products. They simply expected the truisms of the PC market, established in the 1980s, to keep going.
The weird thing is they might actually be right – especially if we look at the medium term and accept that a few details will change. If anything, though, the polarisation we saw in the PC market is going to be even more extreme this time round, with Apple exerting even more control and direction over its products, and its rivals pursuing an even more fragmented and diverse approach.
I’ve just got back from Computex, a massive trade show that takes place in Taipei, Taiwan. It’s where all the companies that make the guts of PCs and laptops (motherboards, graphics cards, CPUs) show off their new products. This year, the iPhone and iPad message finally seems to have got through to them, and the show was chock-full of all manner of touchscreen slates, tablets and phones.
They’re all a long way behind the iPad in terms of polish. I wouldn’t be surprised to learn that most had been in development only since the iPad was premiered. Still, what they lack in quality at the moment, they certainly make up for in terms of choice. In the 1980s and 1990s, Microsoft’s decision to license Windows resulted in PC buyers having a huge choice of machines from a massive range of companies. This is a pattern we’re seeing again, but as well as a few tablets using Windows 7, we now also have to factor Google into the mix, and Google’s approach is putting the trend of variation on steroids.
Unlike Microsoft, Google doesn’t charge for its OS – Android is free – and what’s more, as it’s open source, if you’re content to make do with a version that’s not quite cutting edge, you can simply head over to source.android.com and grab the code, along with detailed instructions of how to make it basically work on a device. No cost, no oversight. Unsurprisingly, this approach has unleashed an absolute torrent of devices. Basically, pick a screen size from about 4in to 14in, choose e-ink or TFT (backlit or not), resistive or capacitive touchscreen, whether you want USB, HDMI or any other kind of port and I can guarantee someone somewhere in the Far East is currently slapping it together with a CPU, a wireless chipset and Android.
Google is taking this approach because unlike Apple (or Microsoft), its endgame isn’t OS marketshare. Android is a means to an end, and the end is driving Internet usage, because the more people use the web, the more they use Google services. This means more ads, and more analytics data to enable Google to serve better (read: more attractive to users) adverts. At the moment, creating an absolute deluge of tablets – the cheaper the better – serves this process extremely well.
It’s not just Google’s approach that’s nitro-charging this trend. There’s a CPU company that’s very like Google in terms of its open approach: ARM. Fine, it doesn’t quite give its CPU away for free, but it’s a far more flexible company to work with than Intel or AMD. Whereas Intel manufactures its own chips – meaning it can dictate price and terms to companies wanting to use them – ARM licenses its technology, and partners are free to add new modules and manufacture the chips themselves. Then add in the generally more advanced state of manufacturing in the Far East now (as compared with the 1980s and 1990s) and the barrier to entry for creating a portable Internet device is extremely low.
Does any of this really impact on Apple, though? Not right now it doesn’t, because despite the publicity the iPhone and iPad have enjoyed, incredibly it really does seem to have taken until 2010 for Apple’s competitors to even get into first gear. Android is closing the gap, but Apple is still ahead – at the time of writing, the iPhone 4′s hardware is still better than any comparable Android handset (especially the screen, which is critical to a device that basically is just a big screen). While there were plenty of Android tablets on show at Computex, most were, compared with the iPad, unrefined (some intentionally so – many manufacturers intend to aim them at developing markets such as China). No-one, such as Sony or HTC, has built an iPad-class luxury Android tablet, but it’s only a matter of time, and one may have been announced by the time you read this.
It’s doubtful that Android is ever going to be as slick as iOS – Google’s profligate approach all but ensures this – but then that’s not the aim. The aim is to make Internet access and the hardware that enables it absolutely disposable and ever-present. You and I might sniff at these devices, which lack the polish of the iPad and iPhone, but when they start showing up for £100 or less, people will take notice.
While the gap is closing, and while we’re seeing some patterns from the 1980s re-emerge, one thing I am not convinced about is that Apple will be as marginalised when it comes to tablets and phones as it was when it came to computers. Principally, it comes down to price: phones and tablets cost less than computers, so while Apple is selling a high-end product, the difference in price between the iPhone and the competition isn’t as big as a Mac and an IBM PC clone back in the day. Prices are further camouflaged by contracts – phones are subsidised by the carriers, so in reality, the initial purchase price of an iPhone might be the same as an HTC, but just ends up costing £5 or £10 more a month, which people will find more palatable than hundreds of pounds up front.
