Apple’s insurmountable platform advantage

“Since the iPhone 6s was released last month anyone who has used the device says it feels like magic. Apple – as a platform company – is so far above the competition it’s hard to fully grasp,” Steve Cheney blogs. “There are reasons why pushing down on 3D Touch feels better than any device people have ever touched, and it’s not entirely clear whether it’s the software or what’s inside that plays the larger part. The iPhone 6s presents itself in a way that lets you feel unconsciously in control yet expressive and free.”

“In early 2010 when the A4 saw the light of day I wrote why assembling an internal chip team would allow Apple to become a truly dominant platform company. ‘So the move to vertically integrate chip development helps Apple erect barriers and become a dominant platform company. This spells a larger trend – it is no longer adequate to simply be a device or software company to succeed,'” Cheney writes. “In the past five years these barriers have become totally insurmountable. iOS is the ultimate platform. Developers make unprecedented money off of it, consumers the world over love it, and Apple owns an entire market’s profits in a non-monopolistic way—unlike platforms past.”

“Platform dominance has also played out as I mentioned. Device makers (Samsung et al) and OS makers (Google, Microsoft) are not making money off smartphones. This is simply staggering to fully comprehend, and foretells ramifications few can see,” Cheney writes. “One of Steve Jobs’ biggest legacies was his decision to stop relying on 3rd party semiconductor companies and create an internal silicon design team. I would go so far as to argue it’s one of the three most important strategic decisions he ever made.”

Much, much more in the full article – recommended – here.

MacDailyNews Take: One of tthe most interesting part of the article is how Apple’s power can be extended to vehicles.

18 Comments

    1. Did you read the article? The take is spot on. No one in the auto industry–or anywhere else– has the chops to build custom chips for future smart cars like Apple.

      And they certainly don’t have the iPhone cash machine to subsidize the development of a smart car either.

  1. Most people believe Apple has no moat. I’ve seen dozens of articles saying iPhones can be easily replaced with Android smartphones and Apple’s share price reflects that belief. Cheaper competition has always been a noose around Apple’s neck. Any feature an iPhone has will be quickly mimicked by some Android smartphone as Qualcomm adds dozens of features each processor iteration. If Apple silicon has it, Qualcomm will just add it to their next processor along with other planned features.

    I’m only saying I don’t believe anyone sees Apple having a moat or Apple wouldn’t be valued as cheaply as it is. Wall Street believes Amazon has a moat and Google has a moat, but not Apple. Companies with wide moats are not seen as doomed companies like Apple is. As an Apple shareholder this is how it appears to me. However, I know Apple is pulling all the smartphone profits but I feel certain Wall Street believes that will definitely change at some point which solidifies the belief that Apple has no moat.

    1. Apple’s greatest strength is that they can design products that work the way that you intuitively think they should. Most aspects of an iPhone, including the new Force Touch just feel natural. Often it is incredibly difficult, technically, to do this. The technology represents what should be very valuable intellectual property.

      Unfortunately, this intuitive simplicity that Apple is able to create is also a vulnerability. Despite the fact that it may be technologically very difficult to create intuitive functionality, we have seen repeatedly how Apple intellectual property is disregarded or downplayed by our legal system, and by competitors who routinely copy it, because it seems so obvious after the fact. Apple has no “moat” because they do what they do so well that it may appear to be effortless by most, and we tend to disregard the value of someone who appears to be doing the obvious with little effort. Wall Street operates on emotion, and emotionally, Wall Street does not recognize or respect Apple’s hard work.

    2. Hmm. It’s an interesting view of the situation.

      From my perspective, the inevitable mimicry / ripoff of Apple typically takes a full year’s cycle and emphasizes that fact that it’s usually Apple who INVENTS and INNOVATES while others follow.

      Why that doesn’t translate into AAPL value, I’ll never know, except to use my usual phrase that TechTardiness Is Rampant. Relatively few people actually comprehend the technology involved in Apple creations. Instead, I read a lot of bullshit, sheer ignorance, incoherent rambling, click-bait FUD and hard core AAPL manipulation tactics. Digging into the noise and finding any techno-savvy is a rare event.

      IOW: Cognitive Dissonance continues to creep into the every man comprehension of modern technology. It’s getting to the point of some sort of Techno Cognoscenti priesthood versus Tech-Neanderthals.

      Veering off topic:
      People like myself attempt to bridge the gap by way of our writing on the net or face to face assistance. But I am ever reminding of ‘The Granny Effect’ as illustrated by my own mother, who is constantly at odds with her iPad. I can rarely explain anything to her at this point. I can only repair, update and reset whatever is the cause of her latest debacle. This week, it’s getting AirPrint to work again. I’ll have to pay her a visit in order to restore its function, if it was ever even broken. (o_0)

      (Imagine if ‘Granny’ was using an MS Surface. She’d have to ask one of my MS using brothers to sort it out, and good luck with that nightmare! I swore off supporting MS junk years ago).

  2. “. . .OS makers (Google, Microsoft) are not making money off smartphones.”

    This is blatantly false. Google absolutely makes profit off Android with its services installed on phones. Do they make as much profit in mobile as Apple? Of course not. But if you wanna be taken seriously in your analysis, don’t make shit up for effect.

  3. I have to say something about “3D Touch”, even though I know I’m gonna get downvoted to hell. I tried it at Best Buy. I have to say, I wasn’t impressed. I was expecting it to feel like a button, pushing back at me until I overcome resistance and “click” down. Instead, as I pushed harder, the screen, like, vibrated for one pulse and that was the feedback. It didn’t even feel like it was vibrating specifically under my finger.

    Don’t get me wrong: It works. Works just fine. It just wasn’t the revolutionary sensory experience I expected from all the reviews. (And there really isn’t anything 3D Touch does that couldn’t be accomplished by “touch and hold”. Hell, it takes longer to press firmly than it does to tap gently anyway, so you’re pretty much doing that already. The only reason I can see that it wouldn’t work is that they’ve already assigned “touch and hold” for switching to “screen rearrange” mode.)

    ——RM

    1. Fair enough. But check out the earlier article here at MDN:

      6 reasons why I couldn’t live without Apple’s 3D Touch ever again

      “When I first unboxed my iPhone 6s Plus, I wasn’t completely sold on 3D Touch. For the first day or two, I had to keep reminding myself to use it,” Allyson Kazmucha writes for The App Factor. “Now, only seven days in, there are certain everyday tasks that I can’t imagine performing any other way than with the help of 3D Touch.”

      I have yet to play with 3D Touch, while I gather up the funds to buy an iPhone 6S outright. But I’m getting the idea that it’s a tech one has to get used to in order to make the most of it. It’s not exactly intuitive, meaning that there is no direct correlation to human behavior out IRL (in real life).

    2. I was unimpressed with 3D Touch at first because so few apps support it at this early date, but then I discovered that while editing text it can be used to turn the keyboard into a trackpad and I FELL IN LOVE! I’ve been bitching about the lack of arrow keys since 2007 and 3D Touch finally shut me up. That’s quite an accomplishment! Give the feature some time to be explored and exploited by developers and it will become more impressive over time.

      Try putting one of the waving fish tail wallpapers on your lock screen and play with the feature. You’ll see that it is a continuous pressure sensor, not limited to just a light and hard press. Think of the possibilities!

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