Saturday, September 13, 2008

On competition and self-interest

A MacInTouch reader wrote: Apple has no obligation to faciltate competitors in any way, shape or fashion. If they reject an App Store item because it competes with them... well, why not?

Answer: Enlightened self-interest: "Enlightened self-interest is a philosophy in ethics which states that persons who act to further the interests of others (or the interests of the group or groups to which they belong), ultimately serve their own self-interest."

In other words, a healthy ecosystem of third party developers for iPhone benefits Apple. Think on this: You can walk into Target, Wal-Mart, and Best Buy, and all of them have an entire section with nothing but iPod accessories. To someone thinking about buying an MP3 player, if all else is equal, do you want to buy a Sansa that has no add-ons available, or an iPod with dozens of cases, speaker systems, car adapters, and so forth? Which one looks like a better long term choice?

Software is the same way. Remember the dark years of the mid to late 90s when one of the reasons people switched away from Mac was the lack of software. Even today, with thousands of useful applications available, you sometimes hear "there isn't much Mac software".

It's only a matter of time until Motorola, Nokia, Samsung, etc get their act together and start creating interfaces as good as iPhone. RIM is already well on its way with the new Blackberry Bold. All of these companies already have third party developer ecosystems in place and active, open and unencumbered (few NDA limits) developer networks. When Apple's competitors finally catch up -- which they will, or close enough, just like Windows did -- what will be the compelling reason to buy an iPhone? The Apple logo on the back? I don't think so.

Apple has turned the mobile phone industry on its head and dramatically raised the bar. But that doesn't assure success, and unlike digital music seven years ago, the mobile phone industry has little market growth opportunity. The only path to significant growth in this industry is winning customers from your competitors. Today, iPhone is winning customers away from RIM, Motorola, Nokia, Sony-Ericsson, etc. In the future, they will try to take those customers back with interesting, compelling products -- and part of that is availability of third party apps, from games to productivity.

It is very much in Apple's long term interest to encourage a healthy, profitable developer community for iPhone.

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