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App-strategy

App strategy on four IT platforms

Apple has become a lead innovator in shaping the competitive landscape for mobile devices and apps. This is an outcome of its integrated business strategy, hardware, software and user interface initiatives.

These are evident in the launch of iTunes and iPods in 2001, iPhone in 2007 and the iPad in 2010. Each blind-sided old and new competitors and indeed their industries. Strategy is also evident in Apple’s decision, during R&D on touchscreens, to prioritise going to market first with iPhone over iPad due to seeing a clearer "go to market" strategy, to quote Steve Jobs.

Critically, apps, content and service are central to the success of the iPod, iPhone and iPad offerings. These are usually the work of those who build on Apple's platform.

This well-known story of Apple's success can also been seen in the context of competition between platforms (1).

Since the dawn of the IT industry, each major IT player uses its platform to create competitive advantage. In today's landscape we can observe four dominant IT platforms which are important to users and developers.

Below is a simplification.

  1. Apple iOS. The platform strength played to by Apple (like Research in Motion) is its control over ecosystem incorporating user interface integration across devices and apps on them. Emblematic of this is its extraordinary standardisation in product names. As of July 2011 the App Store had 15 billion downloads from 200 million iOS users. Apple’s iOS mobile operating system was released in 2007 and is in competition with Android (which has 6 billion app downloads), Windows Phone 7, BlackBerry 7 OS and others.
  2. Web. The platform strength played to by Google, Amazon and eBay is the web, respectively profiting from advertising, content sales and transactions. For example, Google has Android and various applications including Google Apps. It seeks to be more device agnostic and HTML5 will assist that strategy. Amazon has integrated Kindle, its e-book e-reader, into its web-based book seller and publisher and cloud computing advantage. Amazon announced a milestone in May 2011, it sold more e-books than print books.
  3. MS PC Operating System. The platform strength played to by Microsoft is its PC operating system combined with the enormous popularity and functionality of Microsoft Office applications, and Exchange ActiveSync. For mobility and the web it hopes to bolster this with Office 365, Skype (bought in May 2011 for $US8.5 billion), Windows Phone 7, and its new partnership with Nokia.
  4. Social Networks. The notion of platform is flexible enough to include social network platforms. While Facebook, Twitter and LinkedIn have prominence, content sites, software and operating systems increasingly have embedded social features. Interconnection between each involve application programming interface access contracts.

These platforms have overlapping functionality. At the same time each platform player seeks primarily with apps (AKA software, computer programs, widgets etc) to become indispensable to its suppliers (eg developers) and users.

Each platform player plays to the advantage of its preferred platform and ecosystem, while hedging its bets by being active on competing platforms. Microsoft for example is involved actively in Apple's future (with the MS Office suite), on numerous web services and in social networks (for example as an investor in Facebook).

Apps remain central and critical as a competitive tool. Those who control app platforms are positioned to control layers above, ie the futures of app developers and users. This makes positioning for app platforms a strategic decision.

 


(1) Tim O'Reilly's take on platforms is discussed in his detail article What is Web 2.0, http://oreilly.com/web2/archive/what-is-web-20.html

 


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