Three months ago, Apple CEO Steve Jobs defiantly called out Google as Apple's public enemy #1 in the smartphone and tablet markets, describing the Android platform and Google's stewardship of it as disingenuous, fragmented, and cumbersome for developers and inconvenient for customers.
And this week Apple COO Tim Cook ratcheted up the tension with Google considerably by labeling current Android tablets as nothing more than "a scaled-up smartphone" and referring to next-generation models as pure unadulterated "vapor."
On its own, that's some pretty tough talk. But Cook's comments, along with those late last year from Jobs, are much more than merely public posturing because of the real-world legitimacy Apple has earned with the staggering success of its iPad, which was introduced less than 10 months ago.
Apple reported yesterday that in the quarter ended Dec. 31, it sold 7.3 million iPads, which generated $4.4 billion in revenue. Now available in 46 countries, the iPad's penetration into the Fortune 100 increased during the quarter to more than 80%, up significantly from the 65% it reached at the end of the previous quarter.
At the recent CES show, there was a great deal of talk about "iPad killers" from various companies along with speculation that when Google releases the tablet-specific version of Android, Apple's vise-like lock on the tablet market will be shattered.
For CIOs, this is an incredibly important topic because of the increasing need for large and mid-sized organizations to equip more and more of their workers with lightweight and easy-to-use mobile devices that accelerate decision-making and enhance collaboration.
Should you wait for the tablet-specific Android OS to come out before making a commitment? If so, which hardware partner will you choose? Why? How many apps will that hardware partner have immediately available on its platform? Will you trust that brand-new platform to be stable and secure enough to meet your most rigorous enterprise standards?
While Apple COO Cook certainly is subjective on all those issues, it's worth seeing the perspective of a guy whose company created—in just 9 months—an entirely new tablet market and related ecosystem that spurred the sales of almost 15 million iPads in those 9 months.
Here's Cook on tablet competitors from seekingalpha.com's transcript of Apple's earnings call earlier this week:
"Then you have the Android tablet, the variety that are out shipping today, the operating system wasn't really designed for a tablet. And Google has said this, and so this is not just an Apple view by any means," Cook said. And then he described that product vision as "bizarre":
"And so you wind up having a size of a tablet that is less than what we believe is reasonable or even one that would provide what we feel is a real tablet experience. And so basically, you wind up with kind of a scaled-up smartphone, which is a bizarre product in our view. . . .
"Those are not tablets that we have any concern on. The next-generation Android tablets, which are primarily what you mentioned in terms of the CES, there's nothing shipping yet, and so I don't know. Generally, they lack performance specs, they lack prices, they lack timing. And so today, they're vapor."
As a guy once said, you can look it up.
Meanwhile, Apple has continued to actively engage upstream with its components suppliers to help them ramp up for the enormous incremental volumes expected over the next couple of years. Those efforts include Apple making prepayments to those components suppliers as well as capital investments for process equipment and tooling.
Those are some barriers to entry that aren't by any means insurmountable, but at the same time those wildly different states of preparedness between Apple and these still-to-come Android device makers reveal just how difficult it will be for other tablet makers to catch up.
And in the meantime, Apple will continue to innovate, continue to add in enterprise-specific features and capabilities, and continue to encourage the independent development of tens of thousands of new iPad apps on top of the 40,000 currently available.
Keeping up with iPad: is it insurmountable? Heck no. Extremely challenging? Absolutely.
Particularly as Apple continues to grow at jaw-dropping rates (revenue for the December quarter was up 71% over the year-earlier period), and spreading its network of Apple stores, and expanding its base of tens of millions of devoted customers.
And as Apple and Cook continue to pound away at Google and its "fragmented" approach to the market, which Cook emphasized in this week's Q&A session with analysts during the earnings call:
"And we fundamentally believe that our integrated approach delivers a far superior customer experience than [Android's] fragmented approach," Cook said. "You can see this in a variety of ways from the fragmentation of the number of app stores out there that people are going to pull their hair out, because they're going to have a variety of updating methodologies, and a variety of payment methods, and slightly different derivatives.
"You can see from surveys people are doing to see who is on the latest OS, and you'll notice that the iOS is always off the charts on the percentage of people that have the latest version versus the other guys. . . . But the net-net is we think that our integrated approach is much better for the end user because it takes out all the complexities for the end user instead of making the end user a systems integrator themselves. I don't know about you, but I don't know very many people that want to be system integrators as a consumer or somebody in the enterprise."
No doubt Google and CEO Eric Schmidt have and will articulate a very different interpretation of the dynamics taking place in this revolutionary tablet market, and they'll certainly position themselves as the open platform versus what they will call Apple's closed architecture.
And Google will point to the vast array of device choices offered by the Android tablet platform, and point to the customer advantage that will arise from having lots and lots of competitors trying to outdo each other on features and performance and capabilities.
But by the time the Android tablet operating system comes out, Apple will probably have sold at least 20 million iPads. And Cook emphasized that while iPad is booming in each of the 46 countries where it's now available, the most-explosive market for Apple's products is China.
Google will no doubt come out with a very strong and possibly even great tablet operating system, and its hardware partners will introduce some dazzling new features and designs. But before anybody tries to tell you that those introductions will immediately bring Google and Android into parity with the iPad, consider these two insightful perspectives offered by Steve Jobs late last year.
Both describe Jobs' belief that Apple and Google look at the world in fundamentally different ways, and both represent his belief that the Apple approach will emerge triumphant.
Jobs On Software Vision Versus Hardware Vision: "You're looking at it wrong. You're looking at it as a hardware person in a fragmented world. You're looking it as a hardware manufacturer that doesn't really know much about software, who doesn't think about an integrated product, but assumes the software will somehow take care of itself. . . . And you assume that the software will somehow just come alive on this product that you're dreaming of, but it won't." (For the full story, please see our column Global CIO: Inside Steve Jobs' Head: The Supremacy Of Software.)
Jobs On Fragmented Versus Integrated: "We see tremendous value in having Apple rather than our users be the systems integrator. We think this is a huge strength of our approach compared to Google's. When selling to users who want their devices to just work—we believe integrated will trump fragmented every time. And we also think our developers can be more innovative if they can target a singular platform rather than a hundred variants. They can put their time into innovative new features rather than testing on hundreds of different handsets. So we are very committed to the integrated approach, no matter how many times Google tries to characterize it as closed. And we are confident that it will triumph over Google's fragmented approach, no matter how many times Google tries to characterize it as open." (For the full story, please see our column Global CIO: Steve Jobs Declares War On Google.)
Bob Evans is senior VP and director of
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