Alex Watson
The iPhone has driven mobile web and data use through the ceiling, but the freedom the online world offers could threaten its dominance.
Cloud computing is a buzzword phrase, but it’s far from empty – in fact, over the next 18 months, it’s going to start having a big influence on the hardware we buy. Consider this. My first portable music player was a cassette Walkman, followed swiftly by a portable CD player, followed at the end of the century by several MiniDisc players, a generic MP3 player, then, in 2004, a genuine iPod. It was a 20GB hard disk model that, thanks to its 2in, 220 x 176 colour screen, was given the ludicrous name iPod photo. Next was a 60GB 5th generation iPod video. After that, a 16GB iPhone. Plot the storage capacity of these on a graph, and you’d see a steady rise, and then a sharp fall.
For technology, this is strange to the point of being heretical – if I charted the amount of memory in my computers, it would climb from the 1MB of memory in my 386 to the 8GB in my current gaming PC. It’s the same with storage (from a 40MB hard disk to 1.5TB), screen resolution, Internet connection speed, processor speed – indeed, every key measurement of the power and performance available to me has risen relentlessly over the past 15 years.
When I bought my iPhone 3G, 16GB was the maximum available, as it uses pricier flash memory as opposed to the hard disks in my previous iPods – even now, you can only bump a 3GS up to 32GB (although the iPod touch and iPad are available with 64GB). However, if I get a new iPhone, I won’t be looking at a 32GB or 64GB version; 16GB is fine, and if I can save myself some cash, I might be tempted to go for the 8GB version.
I can thank Spotify Premium for this. As you can probably tell from my extensive history of music players, being able to carry around a relatively complete music library every waking hour so I can choose what to play matters to me. The majority of space on my iPhone – 11.04GB – is taken up by music. Two months into using Spotify Premium, which allows me to listen to a huge selection of music for £10 per month, caching songs locally on the phone or streaming over both wifi and 3G, and I’m beginning to think I can get by with much less storage on my phone.
My photos are already stored online, backed up using SugarSync and accessible via its iPhone app and website, and there’s a fair few on Flickr and Facebook, too. I don’t watch much video on the iPhone, but those clips that I do watch stream from distant data centers, thanks to YouTube, iPlayer and, at the time of writing, the NHL’s app, as it’s play-off time in the US ice hockey season.
Why is this a problem for Apple, then? Well, for this discussion, you need to bear in mind that Apple makes the vast bulk of its cash from hardware sales – in its most recent earnings call (Q2 2010), 40% of revenue came from the iPhone, 28% from the Mac and 14% from the iPod, leaving iTunes, software and other miscellaneous services on 18%. The iTunes Store isn’t quite a loss leader, but it’s not turning over the kind of cash the iPhone is.
So, the cloud holds two worries for Apple: first, if hardware requirements decrease to the point that you just need to be able to connect, it’s harder to sell new people kit, and harder to sell the pricier versions of new kit. The step up in price between 16GB and 64GB iPad isn’t solely to do with the cost of the memory – the high-end machine will be more profitable. Apple has worked hard to avoid the fate of PC manufacturers such as Dell who engaged in a nearly ruinous race to the bottom, trying to make machines as cheaply as possible.
That said, storing media in the cloud mainly impacts storage; I might not need a 64GB iPhone 4G, but Apple can still attract me with faster 802.11n wifi, a better camera and a higher-resolution screen. Current Internet connection speeds mean it’s rare that processing using a remote data center makes sense. I’m a hardware nut, though – plenty of less power-obsessed users will opt for a cheaper device if and when they can, and storage has a big impact on the cost of flash-based devices.
Much more worryingly for Apple is the fact that online services are much more hardware-agnostic than traditional software. I’ve got 8223 audio files in iTunes – that’s 54GB in all, around 22.5 days of listening. It’s taken me around six years to build up, and all of these files have album art, genres, ratings and are sorted into hundreds of playlists. Let’s say a new Android phone comes out as my contract runs out and it’s one I like the look of. I’d have to really like the look of it to shift all that music and metadata to some Android music management software. But if I’m using Spotify, well, I’d just have to get the Spotify app for Android and I’m set: my data moves across because my data is really managed remotely on Spotify’s servers.
Add in the fact that my email is already run by Google, and my photos are online in ways the Android phone can easily access, and you’ll see I’m a customer who has very little tie to one hardware device over another, as long as they can go online.
Jon Stokes, a writer for ArsTechnica (arstechnica.com), wrote a piece last month pronouncing Palm’s Pre dead in the water. Perhaps slightly premature, but he blamed the Pre’s demise on a variety of factors, one of which was the fact that its WebOS was so tied into web services – from third parties such as Google and Facebook – that switching away from the Pre was so easy. And with a lack of apps and direction, that’s precisely what he did.
So what’s Apple to do? Well, it needs to provide better online services. Sooner or later, it’s going to wake up and realise that, at £59 per year, MobileMe is something that could be a much bigger deal. It’s made a start with music, purchasing Lala, an American streaming music firm, so an iTunes rival to Spotify could be on the cards. The issue there is that Apple likes selling music – it’s now the US’s biggest music retailer – and Spotify’s heavily ad-supported model isn’t likely to appeal. More likely is that we’ll get a service where you can listen to all the music you own on your iPhone, sent over the air if you don’t have the files on the phone.
That said, investing in online services to rival Google is a fool’s errand: it’s not worth Apple trying to keep up. Google is bigger than you can believe; the lengths it will go to in building more, faster data centers than anyone else is frankly ludicrous. Nope, Apple’s new religion is apps.
I’ve probably spent around £50 on apps for my iPhone over the past year, and I’d be loath to give all those up, which I’d have to if I moved to Android or Windows Phone 7. By not diluting the iPhone platform (the iPad and iPod touch both run iPhone OS) and insisting iPhone apps aren’t made with cross-platform runtimes such as Adobe’s Flash-to-iPhone compiler, Apple is trying to create incentives for coders to create unique iPhone apps. Not only does it get to sell these through iTunes, collecting money in the process, but it pulls people away from the open web and to experiences unique to the iPhone. It works, too: on my iPhone, I prefer the IMDB app to the IMDB site, for instance.
It’s a good strategy, and one unlikely to come under pressure for a while: Google might allow apps on Android, but it has fragmented its system by offering hardware manufacturers freedom, so it’s hard for coders to target all Android phones. Plus, really, is its heart in apps?
The web works for Google, as so much web use involves a search on Google, and therefore more data and more ads. Nope, Google’s ploy isn’t likely to be software, or just software – it’ll be hardware, too, and it will attack on price and choice. Those of you who are veterans of the 1980s will recognise these as the same tactics Microsoft employed back in the day. No surprises, then, that at the end of April, Google CEO Eric Schmidt told a conference that Google wanted Chrome OS Internet devices to be so cheap that they’re ‘completely disposable’.
