1. Is this really what the hardware makers want? They all have seen history as well, and if they go all in with Google the way that HP and Dell did with Microsoft, it leaves the them with precious little to differentiate themselves by. This is why the PC makers have all mostly ended up in a race to the lowest price with razor thin margins. Don't you think a company like HTC would rather be in Apple's position today with the Mac than in Dell's position with their PC's? * A partial answer to this question is that Palm did try, and seems to have failed (which is confusing to me because they seemed to be doing exciting things and had people who really liked their phones) so maybe the HTC's and Motorola's of the world think they have little choice in the matter
2. What does having a third major player in the room do to negotiations (OS + Hardware + Carrier)
One incident that ties these two questions together is how Motorola got screwed over the Droid. They invested a lot in making a decent smartphone running Android but since Verizon owns the name of the product, Motorola gets bumpkis from the product's success. People who bought a Droid may go out and buy a Droid 2 but they will be getting a phone from HTC not Motorola.
A post script question I have is how customers will react to the Dell-and-HP-ification of phones. With computers, there was never really an expectation of how fast and smoothly they could get things done. If Android phone makers end up in a price cutting war, they had better make sure the base model they are selling works better than some off the rack LG flip phone. People won't put up with phones that don't work, their experience is with phones that do.
Hardware makers today (HTC, Motorola and the rest) will most definitely go all in with Google because there's no other choice if they want to compete with Apple! I'm sure they're all well aware that they won't be able to differentiate themselves and they their margins will be razor thin, but even razor thin margins are better than no margins.
Is it really the case that Android is the only option at this point for hardware makers who are not Apple? That seems silly to me. The other choice is to compete with Apple by building the whole stack. My worry is that Palm's apparent failure is going to put the rest of the industry off of the idea. It doesn't seem ridiculous to me for a company like HTC or Motorola to either buy Palm or start from scratch on their own OS so that they actually have something to sell their product with instead of just selling yet another android touchscreen device. Is that not an option?
Ex: Even if the same app doesn't run on two different OS's, they can both still talk to twitter. Back in the day, if you both didn't have a copy of Word, (and floppy drives) you couldn't share data.
Also, re: why would anyone want to do this, my answer to that is that if they have something different from everyone else who is competing on who can sell the cheapest Android phone, they would have something to sell.
Maybe the smarter play is to produce high quality, good value Symbian, Android and Windows Mobile phones that address the market.
An important simplification you omitted: Microsoft used illegal monopolistic tactics to become ubiquitous. Do not skimp on the word "illegal" when thinking about this. We are not talking about one company being better managers than the other, we are talking about one company breaking laws that were designed to give the marketplace a say in the outcome.
Another thing was that Microsoft used many tactics for achieving ubiquity that may have been legal, may have been brilliant management moves, but the outcome did not reflect the marketplace choosing their products freely.
For example, they routinely imposed a clause in their contracts that hardware vendors had to license Windows for each CPU they shipped whether their customers wanted Windows or not. The net result was that any competitive OS would by necessity cost more than Windows because the customer had to pay for the competition and for Windows.
This created the illusion that Windows was more price competitive and that customers preferred the more affordable OS, when in reality customers had very little opportunity to make an informed choice based on true cost.
Apple made many choices that hurt them, but I really think we must be careful to make explanations as simple as possible---but no simpler.
No. Microsoft used sound business practice (with a generous serving of good luck and timing) to become ubiquitous. Only then did they exploit that ubiquity through illegal monopolistic practices.
... and then they exploited that ubiquity through illegal monopolistic practices.
For example, if you have made a good business bet and beat AppleDOS by riding the PC wave with MS-DOS, that's fine. But if you use your MS-DOS dominance to beat Wordperfect, Lotus, Ashton-Tate and so forth simultaneously to establish Microsoft Office, that's bad.
Another example is the whole Internet Explorer vs. Netscape imbroglio. That wasn't a problem because Netscape couldn't make money selling browsers, it was a problem because it allowed Microsoft to try to make ActiveX a standard for active content in web pages, which would have closed the web to only work for Windows-based browsers.
"Good enough" is that space where your product is suitably useful, maybe 80-90% useful, by the vast majority of people. Literally every person on the planet can purchase your product and get some kind of value out of it if not handle everything they need to do. Sure you get feature bloat because the intersection of what I do 80% and what you do 80% is not really that big, and you get quality control issues that you have to fix in later versions. But you cast a huge net and catch lots of fish that way even if some occasionally slip through the holes in the net.
Contrast this with Apple's "insanely great". You make a product, and polish it to a ridiculous shine. Sure you might alienate users who need it to do X when you've spent a great deal of time making sure it does Y better than anybody else, but the people that need to do Y will love you for all time. You may not cast a huge net, because instead of manufacturing lots of low quality net, you manufactured a small amount of very high quality net, but you catch fish that nobody else can get because they break through everybody else's net.
What happened with Word Perfect, by way of example, is that they just never bothered. They had their cash cow and figured they had locked in users because of their fancy keyboard shortcuts. They already had achieved "good enough" and didn't know how to compete against another vendors seeking that same quality. If Microsoft had been going for an Apple like "insanely great" quality, they would have made a completely different target. When Microsoft focused on perfecting Y, Word Perfect could have focused on X and Z and still made it. But instead, Microsoft did X Y and Z "good enough" that there really wasn't any difference between the products. And then Microsoft had a whole integrated suite of "good enoughs" and Word Perfect went quietly away.
Reference: http://www.groklaw.net/article.php?story=20080317124445613 (search for "API documentation").
Not trying to be snarky here, genuine question:
Did courts validate that Microsoft's business tactics were, infact illegal?
Maybe I'm talking about something else, but I recall Microsoft being let off the hook by the DOJ.
What they did was certainly sleazy but since you insist of the word 'illegal' here, I guess it's important to know if what they did was finally recognized as a violation of any laws.
This change in character is the key to their change in fortune.
It seems to me that Apple is following a trend they set in the early nineties. Since around 1986 to 1994, Apple introduced some of its most successful consumer products: Macintosh, PowerBook, System 7 (later to become OS X), etc. These products were wildly successful. They were richly-engineered, consumer-friendly, albeit expensive products. They had their own software stack that was not transferable to other platforms, and that 3rd-party developers were not encouraged to deviate from.
Apple relied on very high profit margins that were not sustainable and instead of competing with companies that were making cheap commodity software that ran on any machine (such as Microsoft), they sued them.
All this set the stage for the rise of Microsoft and their licensing partnerships. Unlike Apple, Microsoft software such as Windows and Office ran on any machine. Developers could create software for these systems free of any restrictions. Even though it can be argued that Apple's software was better, it didn't matter. Developers were already heavily invested in developing for Microsoft's platform.
And now to make my point:
Where developers went, consumers soon followed. It became clear that more software was available on Windows, at a lower cost. Apple was soon on the decline. I am arguing that the same thing will happen again because I'm seeing the same narrative right now. You don't have to try too hard to find frustrated developers switching from Apple to another platform. It's become a hassle. And it will continue.
And again, where developers go, consumers follow.
With the iPhone (and iPad), the story is the opposite: there wasn't any mainstream (i.e. "household name") smartphone on the market at the time the iPhone was introduced. The App Store has a wide early lead in terms of number of apps. Likewise, there hasn't been a mainstream tablet like the iPad seems set to be.
"Where developers went, consumers soon followed."
Is this really the case? I see this sort of thing being said very often these days, but I'm not convinced it's accurate. (Always be suspicious of a group telling itself how important and influential it is!)
Windows took over because PCs running DOS were already vastly dominant. Hardware manufacturers and users of course wanted GUIs and Microsoft made sure Windows was cheaply available as part of the (restrictive and exclusive) licenses the hardware companies already had for MS-DOS — I remember hearing that IBM's hardware division could get MS-DOS/Windows cheaper than they could get IBM OS/2 from their own software division! And Windows had much more mainstream resource requirements compared to OS/2, its only real competitor on the PC desktop. So every PC very quickly started to ship with Windows. The Mac was already confined to a niche, Windows just narrowed it further. Users ended up in a situation where they would have had to have gone far out of their way to get a PC that didn't have Windows, so of course there quickly was demand for Windows apps.
Also, while the PC was widely used at home, it also had the advantage of being even more widely used in business. So people decided to buy a PC at home because they were compatible (disk and document formats, not to mention being able to bring home software from work) and were already familiar with the PC. The same sort of compatibility lock-in doesn't exist in today's mobile space (if anything, there are a ton of apps on iPhone OS that people want and can't get anywhere else); and I don't see many people buying Blackberrys because they're already familiar with them from work. (More like they buy iPhones because they're already familiar with their iPod ... and iPads because they're already familiar with their iPhone.)
Your recollection of history is wrong.
> Windows took over because PCs running DOS were already vastly dominant
You're confused.
Apple II was dominating at the time IBM PC was introduced. The reason why it became such widespread was because the market wasn't saturated by Apple and because the partners of IBM (which had a license to clone IBM PCs) were competing on price ... had it not been for the likes of Compaq, IBM PCs would have gotten nowhere.
> I remember hearing that IBM's hardware division could get MS-DOS/Windows cheaper than they could get IBM OS/2 from their own software division!
OS/2 was a collaborative effort of Microsoft and IBM (later forked by MS to Windows NT). The reason for Windows 3.0 and later 9.x being more successful was because it ran on cheaper computers and OS/2 also had a high price tag.
Both IBM and Microsoft viewed OS/2 as the future, waiting for hardware to catch up.
Also OS/2 3.0 (Warp) released in '94 was full 32-bit with preemptive multitasking and had binary compatibility with Windows 3.x / MS-DOS. If anything it was a failure because IBM had other revenue sources and couldn't commit to it (in '95 I remember seeing commercials for Win 95 on MTV).
Also one could argue that Microsoft was more succesfull because it had better partnerships and favored open-hardware systems, leading to more drivers developed for Windows. You also had to shell out extra money for the the OS/2 SDK AFAIK.
> The same sort of compatibility lock-in doesn't exist in today's mobile space
That's because today customers use phones to make phone calls or for SMS, only occasionally opening a web browser or reading emails. That might change, and when it does people are going to start wishing for binary compatibility.
The Apple II was doing very well at the time the IBM PC was introduced, but no one system dominated in any sense. It was clear early on, though, that IBM's entry into the market was going to be a milestone for the industry and that IBM was going to dominate in the business market, almost regardless of product quality because of the "IBM" name and marketing channels. Apple floundered with responses including the Apple III and the Lisa. Jobs clearly felt that IBM domination was nearly inevitable: look at the 1984 Mac commercial.
I don't recall the "partners of IBM (which had a license to clone IBM PCs)": if there were any, they were very few and insignificant. Compaq was the first successful unauthorized PC clone and was promptly sued by IBM, who also became distracted for the rest of the decade trying to re-proprietarize PC architecture with the PS/2. IBM was seeing tremendous success with their PCs before clones became popular, though clones and the race toward low-priced commodity certainly helped the PC architecture become further dominant and ensured its continued dominance until the present day.
I mostly agree with your statements about OS/2 vs. Windows 3.0/95/NT, and your point about Microsoft's partnerships leading to more Windows drivers is a good one. IBM wasn't in a good position to do this, since they were only interested in selling the whole box. This was certainly a factor in Windows' ascendancy and something that IBM didn't begin to catch onto until much too late.
I don't foresee users becoming locked in to phones in anywhere near the same way as they did with PCs: even most users who have many apps on their phones and use them for some sophisticated tasks wouldn't have much of a problem jumping to a different mobile OS. This is due to several factors, including the types of tasks that people do with their phones (generally simpler tasks with less integration between multiple apps) and the ascendancy of both open/compatible document formats and web services. On the hardware side, people are already used to throwing out their cases/chargers/adapters when upgrading from last year's model to this year's model by the same manufacturer, so there's little lock-in there, though Apple at least has some capability for lock-in through so much of their (very popular) stuff being standardized around their proprietary Dock Connector. I'd say Apple's recent moves show that they get that mobile lock-in doesn't work in the same way and isn't as much of a factor as it is in the PC business: they're not trying to use their current market position to lock users in nearly as much as they're attempting to lock developers in.