I’m no lawyer, my only exposure extends to our company law activities at my workplace and past legal battles regarding farming ground and such—did you know that as a farmer you can let you cows graze on someone else’s lawn and if he doesn’t object, you can argue that you are the owner? At least in the Netherlands, this happened to my family once.

I think there is a certain danger here, if Apple doesn’t fight it, which it does, while Palm Pre continues to try and gain access anyway. It seems very shady on Palm’s side, but doe sit have a case here? I will discuss the strategic implications, as far as I can identify them.

Apple, as we all know, is a very interesting company. It is very vertically integrated, building hardware, software, and has a large influence on the connection between them (e.g. mobile internet), as well as the content provided on them (e.g. music, movies, the app store). Some would call this a monopolistic situation and it seems strange that it gets away with this, while Microsoft, with something that is, for now, as trivial as a browser, does not (in the EU at least).

iTunes is a powerhouse for media and mobile software, but this can be segmented into different areas and different phases. The iPod was released at the beginning of this decade (phase 0), shortly after iTunes, which then built up a power-position for music (phase 1). As the iPods became mobile computing devices, more content was being shipped via iTunes, such as video and those little games (phase 2). Finally, 2 years ago, the iPhone was released, with about a year later, the App Store (phase 3).

Music, phase 1 of ITunes’ power play, is the area which the Palm Pre (to my understanding) is impeding upon. You could easily see Video being the next thing to sync, though I’m not sure if this is possible now. Unless the iPhone takes a step back towards a more web-app-based approach, I don’t see the Palm Pre being a threat to Apple on the App Store front.

Apart from a phase-based perspective, there is also the matter of the lowest common denominator (LCD). Why do people buy mobile Apple products? I would argue that nearly everyone buys an iPod, because of playing music (and not so much video), while a growing niche segment buys the iPod Touch and iPhone for applications and games, as well as media. The LCD is music and it continues to be of strategic relevance to Apple, even with the hyping of their App Store, where Apple will continue to stay entrenched indefinitely.

So, from a strategic perspective, Palm Pre does not stand a chance. Apple will continue to make iTunes incompatible with each future version. Legally, on the other hand, I am not nearly qualified enough to make that assessment, though I think the “cow argument” may apply. If Palm Pre keeps trying hard enough, and continues to get a user-base that desires this link, there may be a legal argument towards loosening Apple’s grip on mobile media.

Since iTunes isn’t very profitable for Apple, I’m not sure what the implications will be for it, but I expect them to fight ’till the last breath.

Vincent
(Picture has no relation to this topic, but is of a cool movie nevertheless)

If you think about how the iPhone was launched so many months ago, or rather at what stage the iPods were at, you know that apps were always on the horizon. The iPod G5 introduced a wider range of games that you could buy through the iTunes store, which already introduced us to the idea of buying apps, well games really, through that venue.

When the iPhone arrived, there were NO apps; App-support was basically web-coded widgets with limited functionality. The reason for this was, I believe, that there was no competition to speak of + perhaps the complexity of setting up such a venture. Apps for other phones existed, ok, but it was either in a decentralised fashion (Java for instance), or very centralised and very limited in its offering (e.g. Blackberry & Palm), at least compared to the current iTunes store.

It took pressure from the market [jail-breaking & media] and perhaps already the idea in the back of Apple’s heads to release the app-store a little over a year after the initial device was launched. When it did launch, there was lot’s of hype, lot’s of love, and good news for Apple iPhone numbers both on the device-sales side and that of app-sales.

How the other device makers reacted was two-fold and really quite half-heartedly. Most hardware makers focussed on what they did best: hardware. Touch-screen after touch-screen device entered the market. The most interesting software-based strategy came from Google, which, I guess, realised the potential of mobiles as computing platforms and, more importantly, as search/internet/”revenue for Google” enabled devices in everyone’s pocket.

The current app-store offerings are still lacking with many big parties attempting to launch one for their platforms. The key-factors in terms of adoption seem to be having a critical mass of both users and developers, both of which represent a chicken & egg problem for many, something that the initial iPhone circumvented quite elegantly.

The most promising devices today are Google-/Android-powered phones and the, still somewhat vapoury Palm Pre. The latter seems to be the most competitive, hardware-wise, with much ex-Apple talent having contributed to the Pre’s development. On the App-store front, it’s still very early days, but reports are disappointing.

So, the question is, what can phone-makers and software-makers do to compete with the new “Microsoft” (=Apple) of the mobile space? The choice, to me, appears two-fold:

1. Emulate Apple in whatever way possible: create a great device and create an app-store with a sufficient supply of apps.
2. Or, create a great device and find a way to elegantly get apps onto it, without all this centralising nonsense.

By the wording, it’s obvious that I prefer the second option. As good as the iTunes store is, it isn’t amazing for developers and it isn’t as profitable for Apple as one would think either. The biggest problem for competitors is similar to the music-situation, that Apple has critical mass, which attracts the greatest amounts of customers and is a nearly insurmountable challenge for new entrants.

Where Apple clearly leads is in its developer-support, which isn’t quite as apparent from other software/hardware makers, except perhaps Microsoft (but mainly on the PC-side) and perhaps Google. Palm, as yet, does not offer a comparable service to developers, or to put it in another way, Palm developer conferences are not yet sold out in the way Apple’s WWDC is each year.

Final thoughts:

• I think that developer support is key in any smart phone strategy these days, as mobile devices continue to become computers in your pocket.
• I don’t think that centralised app stores are necessarily the way to go, except (and I suspect this) if the mobile carriers are demanding it.
• The simplest thing would be to create a web-based categorised list of a apps that developers can add to;
• implement mechanisms that vote and demote apps according to their usefulness and other attributes;
• and create / implement mechanisms that prevent abuse (e.g. P2P apps or VOIP apps, though I think the latter can no longer be considered this)
• And continue to innovate on the hardware, because I think there is plenty of innovation left. What makes the iPhone so desirable is the app-support, but the hardware is really nothing to write home about.

Note: I purposefully left the links towards the end, because it allows for a more time-efficient, easier to write (and, maybe, read) article. Links with additional info are included in below list:

• Mossberg on Palm Pre
• Apple App store numbers
• The incredible app store hype (one of many developer complaints)
• Palm developer network

If you want to hear some interesting perspectives on the hardware and software business and/or starting businesses in general, check out the Stanford entrepreneurial thought leader lectures held by Jeff Hawking, co-founder of Palm, and Steve Balmer, employee no. 30 & current CEO at Microsoft.

Jeff Hawking is also the author of “On Intelligence,” and describes his development-path of creating neuro-scientific solutions towards interfacing with technologies (which is, I think, the right perspective towards interface-design). He’s doing some pretty interesting things in the field, also through his foundation called Numenta, but I expect also through future hardware coming out (I’m not sure if he’s involved in the Palm Pre, but he was in the Foleo). He describes some crisis-moments in Palm’s past, including how to compete with Microsoft (the irony!). Very worth checking out and I love the title: “Inside the mind of a reluctant entrepreneur.”

Steve Balmer, what a character! I found him to be thoughtful and concise, whilst never forgetting to pimp the universe that is Microsoft and how that is important for startups… He shares a bunch of stories, like why he decided to drop out of Stanford and join Microsoft as employee no. 30, the current economy and its opportunities, the future of computing, and even makes a few jokes about (not mentioning) Vista.

I thoroughly enjoyed both lectures and think you will too.
Vincent