Steve Jobs Is Building AppleWorld - And Google's Running Scared | Hacker News Reader

Steve Jobs Is Building AppleWorld - And Google's Running Scared

seekingalpha.com

46 pointsprofquail76 comments

Apple quickly realized that apps would one day overtake .coms. They knew that mobile devices would overtake PCs.

Indeed. Which is why they spend a full year denying that the iPhone needed native apps and trying to shut down all the jailbreak work before finally caving and shipping an SDK with the next rev of the hardware.

Apple got lucky with the iPhone; it was the right product at the right time, and the App Store was a once-a-decade gold rush. But it certainly wasn't in Jobs' master plan for world domination.

I kept looking for insight in this article and not finding any.

The weird part is his overall thesis is at least not bad. But then the article is just a long string of misinformation arriving at a somewhat accurate conclusion.

It's got post-hoc reasoning written all over it.

I'm glad someone else shared my opinion, I found "Apple quickly realized that apps would one day overtake .coms." to be a particularly absurd thing to say. When placed in context of the entire article it made more sense seeming as though the piece was on a whim (or possibly a dream/fantasy) rather then hard evidence or a deep understanding of our industry and culture.

The best part is how he says it in past-tense as if it has already happened.

glad someone else caught this. I actually read it over twice and chocked it up to being a type...not impressed at all.

Yeah, this is ridiculous because all the cool apps in the world can't overcome the fact that they are only available on a single device. What makes web applications great is the platform and location agnostic nature of them.

I think that you are correct. This is why I expect HTML 5 "apps" to be more important on iPhone, Android phones, etc.

Pardon my somewhat non-techy understanding of this, but how do you see HTML 5 changing that? I am not familiar enough to understand the implications.

HTML5, if 'fully' supported by browsers (like Safari and Chrome), supports a bunch of new features that make previously impossible stuff easily doable - the major one being offline storage. e.g: GMail can store your inbox in your browser's offline storage cache, so you can continue to use the site and send/read emails just like you do with Outlook or other mail clients today. When you reconnect to the web, it'll sync up and send the differences.

App coolness is not a function of the number of devices it runs on.

a) people probably buy iPhones because of specific cool apps that are available on it (similar to the battle between the 3 game consoles)

b) an iPhone user doesn't care whether the cool app they love run on a Crackberry. I suspect Android users also don't care if an app they love doesn't work on an iPhone.

This is certainly true for apps that take advantage of the hardware. The thing is, a lot of apps out there just encapsulate web functionality inside an app so for those not so much.

Apple released the SDK 8 months after the iPhone 2G launch. That's not an unreasonable amount of time. I think their intent was always to allow third party applications but they wanted to produce a really good SDK first and not rush something to market. This is one of the reasons the iPhone App Store has been so successful.

"Apple got lucky with the iPhone"

Yeah,that Jobs just gets lucky ... again and again and again and again. He's like the energizer bunny of luck.

Or.

I'm not terribly impressed with the article.

But I think the no native apps thing had to do with control, which reinforces the Apple World thing. But it shouldn't be a surprise that Apple is aiming to be vertical monopoly - that's been it's model for years.

Interesting to see people who think that SDK was not planned from the very start.

And there was no luck involved with the iPhone—remember, the thing was in the works for 2.5 years before being revealed. High focus on something you want to perfect is hardly a luck.

>I kept looking for insight in this article and not finding any.

It's in the last sentence: Disclosure: Long AAPL. This guy stands to gain (in reputation and wealth) by talking up Apple's value. That doesnt mean he's necessarily wrong, it just means that everything he says needs to be viewed through that lens.

Also, Apple makes up the vast majority of his tech stock coverage: http://seekingalpha.com/author/jason-schwarz/articles/latest

"They knew that mobile devices would overtake PCs." For productivity work, people usually prefer to remain stationary and use monitors larger than 4". They are not competing products. Ludicrous.

I won't use the word 'scared' but I actually think Apple is worried about Google.

In my opinion, It is Google that is getting into Apple's territory (Android, Chrome OS) and Apple is trying to stave them off.

A lot of Apple's IPhone users depend on Google services and not the other way around. This is why Apple would probably have its own Search and Map services in the near future.

iPhone users don't depend on Google Maps & Search per se; rather they depend on maps and search, which at time of this writing there's at least one other major provider (quality, market penetration notwithstanding). This can be swapped out.

What I would not like to see is only 1 search provider, 1 map provider.

Reminder: must check whether there is an OpenStreetMap iPhone app.

To a certain extend, iPhone users do depend on the Google suite of products. If you're a GMail user, you probably have lots of saved locations on your google maps, items on your google calendar, and contacts & voicemail on google voice. The android integrates all of these "must-have" apps very nicely on a mobile device.

Apple hasn't done so great with their mobile.me platform. Had they done better, the iphone would have been a great mobile device for their mail/contacts/maps.

Only if you actually use GMail. I wonder what percentage of iPhone users use GMail on their phones vs. other email services. I don't use GMail. My calendar syncs with my non-G calendar and my Mac. Ditto for contacts.

In what respect does Android integrate these features better than the iPhone does?

The one thing that sucks on Google Maps is you don't have access to reviews (or at least in no way that I can determine). At least they show subway stops.

I think success here is probably determined by number of hardware units sold.

PS: Apple doesn't do maps.

"In what respect does Android integrate these features better than the iPhone does?"

Way, way better on Android. This is the main reason why I'm not switching to the IPhone.

Your phone contact list is the same as your GMail's. When you add/edit a contact online, it syncs with your phone.

You can add a Google Calendar widget on your Home Screen.

The best is the GMail app which according to most people is better than the Mail app on the IPhone.

Basically, when using your Android phone for the first time, you login with your GMail credentials and you automatically have your contact and calendar on your phone.

"PS: Apple doesn't do maps."

They will soon. Apple bought PlaceBase last year.

http://blogs.computerworld.com/14835/apple_purchased_mapping...

mail.google.com in MobileSafari is better than the Mail app on the iPhone

I only have my gmail account set up in the native app to get push notifications via exchange integration.

imap

iPhone users don't depend on iPhone per se; rather they depend on a cool device that can make calls, play music and run some apps, which at the time of this writing there's at least one other major provider (quality, market penetration notwithstanding).

There, I fixed that for you.

My reply on their site, i think Jason Schwarz got a lot wrong, mixed up things.. sujective bad written article, imo:

"On the other hand, i heard that Apple looks to replace google by bing, don't know if this is true, but if it is, it shows who is scared and who is not. What you don't see with your view of "iphone + itunes + appstore" is that by the end of the year it will be "dozens of android phones, tablets, ebookreaders, mp3 players + android market + youtube + gmail + gdocs". In my oppinion, Apple is in the position to lose market share on the mobile market (which analysts also predict) and has a reason to be afraid of. They have been the major (like 99%) player in this area for years and now fear to lose some ground, which is just natural. You make a lot of assumptions and mix things up (google search vs. facebook, d'oh?) to tell your theory, but all in all, i wouldn't agree. Also, afaik Schmidt left the board because of conflicting interests, which just seems natural for me. If you would be Apple, you wouldn't want to have such a competitor in your board, would you? Beforehand it was: Ok, Google brings good apps, ads, search, maps to our platform, thats great. With Android and Chrome OS this obviously changed. Then again, if GOOG shares go down, i'll be happy to buy them ;)"

The mobile computing platform has a long ways to go before it will overtake desktop computing. For check-email-and-view-web-pages type tasks, it really works well, but I don't see people doing 3d-modelling, desktop publishing, software development or just plain spreadsheet work on a mobile device in the near future. Maybe I just don't have the vision to see interfaces that will make these operations doable on a smaller screen.

Well it's silly. You have to figure as mobile devices advance so will desktops. Sure being able to have a computer in your pocket on the go is nice. But no one is ever going to be going to work and working all day on their iPhone.

You could create a docking system so your iPhone could be hooked up to a real keyboard, mouse and monitor. But that is silly with current differences in power between laptops and mobile phones.

I'm guessing we'll have workstations for those tasks for some years to come. But of all computer usage, how much is web/email, and how much is 3D modeling, sw dev, etc? I'm guessing not that much, if you look at a general crowd (not HN).

LMAO...here's the key sentence in that article:

Disclosure: Long AAPL

Seriously, how could you possibly have an objective opinion about the proper valuation of arguably one of Apple's biggest competitors, Google.

Moreover, Apple's P/E right now is 33. Let me repeat that. 33!. If the two stocks prices are two switch places, then Apple's P/E sky rockets to an absurd 80. So you should be getting long $AAPL? Hmm, not at these levels...

Over the long term, stock price factors in earnings expectations. So to assume P/E will be 80 is incorrect.

Also, Google stocks are more expensive than Apple's at a current P/E of 37.

http://www.wolframalpha.com/input/?i=apple+google

But yeah, the article is really bad "financial analysis".

Google has a massive advantage because A) The barrier to entry is low because most of the services are free and B) Just because somebody owns an Apple device doesn't mean they can't use Google.

There's some overlap but the companies just don't do the same things. Unless they decide to lock themselves in a segment of the market that overlaps completely, there's no reason they can't both be successful.

I don't get it ... what's AppleWorld?

My first thoughts is that it will be an amusement park with Start Trek-like themes and with chapels where you can get married by a Steve Jobs look-alike.

No wonder publishers were the first to get gaga about cloud-computing :)

Arg. Accidentally down-voted. Sorry.

[EDIT] I'm not sure why I got down-voted. Is this a 'revenge' for my mistake (not necessarily done by the parent poster)? Is apologizing for my mistake something that I shouldn't have done? Color me confused. (Note: I don't believe that this post deserves to be up voted past 1.)

I didn't vote you down, but I find it completely unnecessary to write an apology and it's a little annoying to read one for a mistaken downvote, as this adds nothing to the discussion. It's just a mistake. It happens. The voting is anonymous (to all except pg and a few others perhaps). If you want to apologize, try to find a way to send a private message. I'd say you got downvoted for cluttering up the discussion, which ironically I am now also doing. Oh well, hope this helps anyway.

this may be a side note, but using chromium nightly builds on mac, I see no down vote button anywhere. Just the upvote. anyone know the reason for this.

I think there's a karma threshold you have to cross before you're allowed to downvote. (Or maybe that's only for colours?)

Yes. It's 200 or 250, if I remember right.

Google probably is not scared, but what I found out, unexpectedly, that Google's services are indispensable less and less for me.

In the past decade, Google search had been essential for my internet life. But in the last months, when I was to find out what is happening now in certain area, Twitter search does it for me; if I want to watch some area for longer time, I subscribe to a few rss feeds. If i want to find out basic facts about something totally new to me, Wikipedia will serve that. And in rare cases, when I need to find out something specific, I use Google. But even in this area, Bing is catching up.

Then, I use a few Google services like GMail or Greader, since I found them to be the best, but if some better clients will arrive, I'll switch.

To sum it up, it seems to me that Google doesn't have anything truly irreplaceable now - they were ahead of the game with the general search, but they couldn't maintain their focus on it, so the margin isn't that big currently.

Now, it seems to me that the main battle is fought about what will be the ultimate Internet platform in terms of hardware+software. Here, Apple and Microsoft are the biggest animals so far, with Google and maybe Amazon trying to participate. But in the grand scheme of things, Google already isn't the main Internet player it maybe used to.

Except that atm Twitter search only reaches back one week, and to get older Tweets, you have to go to Google or Topsy or something.

// 24 months from now, the two stocks will have changed places and Apple will be at $585 and Google will be at $210.

I can't believe someone is writing an article in a finance site that doesn't know what stock prices mean, in absolute terms.

I read all of the comments here hoping to find this. Thank you.

Don't get me wrong, but if some people choose to live in AppleWorld, we might as well put them all on a spaceship together and send them off into space. I don't mean it in an evil way - just saying they would probably be living isolated lives, only interacting with each other. So they might as well live on another planet.

I for one wouldn't want to live in Disney Land, and not in Apple World either.

Interesting article, but I disagree mostly due to my personal preferences: I am more comfortable using GMail+GCalendar+Gdocs in my workflow, buying MP3s cheaply on Amazon, and having the relative openness of the Android phones over the iPhone.

Still, for non-techs, the Apple do it all approach would be very tempting if not for the much higher cost of Apple gear.

I may be calling this wrong, but I think that we are going to the commoditization of just about everything: cheaper bandwidth, cheaper devices, low cost or free software, etc. The market will grow but individually products and services will get much cheaper.

Very long term, will most people be willing to pay for the Apple cost premium?

See Apple's laptops for an answer to your last question. In a field of $400-1200 laptops, they're selling $2000 machines very successfully.

PCs have already been commoditized, Apple has maintained their premium by offering something that noone else can: smooth integration and experience due to everything designed end-to-end by one company (and OS X).

When you factor in the time and effort savings from the extensive polish/integration work that Apple does, plus the 'style' bonus value, Apple really isn't that much more expensive. Hell, the iPhone is only a whopping $0.25 more than the Droid over the 2-year life of the contract. The iPhone is easily $0.25 more awesome than the Droid!

If any tech company is creating their own "world", it's Google. Apple should be the fearful partner here.

Seeking Alpha has been in love with Google for some time now. They positively gush about all things Android, even when Android = Fail (like their horrible multitasking - trust me, my phone is a G1, and the multitasking sucks), repeatedly predicting how Android is the obvious winner in the mobile OS wars.

So it doesn't exactly surprise me that they would put out tripe like this about Apple. I have to think that their editors are heavily invested in GOOG, and are prepared to sell short on AAPL. Not exactly an unbiased source.

It all boils down to where your majority revenue comes from:

Google: advertising. Can they diversify?

Apple: hardware. With desirable hardware, you calculate what is the price point to maximize profit and execute.

Some other random comments about the article:

1) Share price is meaningless in isolation. $10 can be very expensive while $3,000 can be very cheap.

2) The rumor mill now has Google Tablets as well. Wow, I must have been asleep

3) AppleWorld must collaborate with Virgin Galactic.

"'ll bet that in one of those Apple board meetings that Google (GOOG) CEO Steve Schmidt used to attend, he realized that Jobs was on the verge of building AppleWorld and he's been scared ever since."

I don't think it's possible to build a "closed digital world" that will have the traction of the entirety of the open Internet.

Closed systems are great for creating an ideal model of how thing "ought" to work. But the "wide world" tends to take those innovations and expand them beyond the limits of a closed ideal system.

Apple has made great profits on the Macintosh but it's also become happy with the Mac having a highly profitable niche position. That seems like the fate of the entire "Apple World" situation. Remember Disney never extended Disney World beyond Florida.

I'm sure Google is running. "Scared" seems like a bit of a reach. I suspect that Google is more afraid of entities which try monopolize and monetize their Internet pipes.

This closed world is close to possible with control, which is exactly what Apple has achieved with the iPhone. They limit which apps make it on, and which content can be displayed. I do not doubt that sooner than later Apple will offer filtering for internet, and will package it in an appealing way (security). It seems foolish now, but just wait.

Indeed - as long as Apple is willing to accept less than 100% penetration in the market, there are many people more than happy to live in Steve Jobs' closed world. It sure beats the current competition in my eyes...

I do not doubt that sooner than later Apple will offer filtering for internet, and will package it in an appealing way (security).

It does seem foolish now, and "just wait" is not a compelling argument. What makes you not doubt this? Where is the money in it?

You can browse to any web app. "Limit" is very relative - there are more on-the-metal apps available for the iPhone than any other phone, no?

And not only that, but you get probably the best mobile phone browsing experience; although I have not tried the Nexus One yet (because there's no customer support), but I am willing to eat an onion if the Nexus is better. I know the BlackBerry sucks at browsing.

"Apple quickly realized that apps would one day overtake .coms."

I'm sorry, what? In what conceivable metric do apps outnumber .coms?!

It doesn't say outnumber.

It says "one day".

Methinks he has some problems with units and is drifting out to sea. http://xkcd.com/687/

Let's ignore the _trillions_ of dollars being made by ALL .coms and just focus on one of them: Amazon.

2008 revenues of $20BB.

To match that, Apple would need to sell $66BB worth of apps in one year. If the average price on the app store is $.25 (incl free), that would be 264 billion app downloads just to match the 2008 revenues of ONE dot-com.

There are no scenarios, no-matter how outlandish, in which the app store can overtake websites in $.

you'll probably need google to search thru all your apps that have outnumbered your .coms to find what you need.

> Once you enter AppleWorld, you have no reason to leave.

Except of course if there is better stuff outside AppleWorld which there invariably is. This would only work if the residents of AppleWorld are so cut of from the rest of the world they are not aware of all the cool stuff outside. But then it starts to look more like a prison.

both companies have very different business models and are going after different aspects of the same overall market. it's like comparing intel with microsoft. one is after the information and how to host and provide it and the other is after the device that will display that information (and the personal media). if it wasn't for apple's closed strategy, everyone would be using google voice to make free phone calls and send txts. btw, this is going to happen. Apple will be selling the iPhone thru google.com/phone one day.

besides the internet is large enough for both companies to coexist.

disclaimer: long AAPL, long GOOG.

Let's see, Apple had a closed operating system before they went to unix with OSX, and we know where OS9 was headed. It's only when they co-opted unix that they achieved such great success with Mac market share.

Are you saying that OSX is more open than OS9? :)

I'm not sure "open" is the idea I'm going for here, rather OSX exposes a larger existing ecosystem of tools, libraries, applications, all of which are open source. Now the topic of the original article was about a closed environment versus an open one, and it certainly seems to me that since OSX is unix, that it's part of a larger, open environment, and I think that's why their desktop market share has increased since OS9 and below.

Apple has too much stock (literally and figuratively) in Steve Jobs. It is not at all clear that Apple has the capability to survive and innovate without him.

A valid concern shared by many, but I can't see Apple not being prepared for its CEO's eventual retirement. I think it's safe to say Jobs has shaped the leadership of Apple with people he trusts, and while there's not going to be any one person with his traits, there are enough minds that share his vision to carry the company long-term.

I actually wondered today who at Google sets their tone/vision?

I think one of the companies that relies the least on a persona for their facade in the market is Adobe.

It's times like these that make me thankful for IMAP.

If mobile devices "would overtake PCs" then why does everyone still have a PC?

Everyone? There are about 1.1 billion PC's, and 4.6 Billion phones in the world..

Don't many people have multiple phones?

that is phones, not smartphones. And the smartphone that can easily be used for creative purposes past taking shaky videos has yet to be invented. If I want to get work done - writing, coding, drawing, planning - smartphones aren't helping.

Google (GOOG) CEO Steve Schmidt

Heh. Apparently, from inside AppleWorld, all CEOs are named "Steve".

Reply on news.ycombinator.com