“I would rather compete with Sony than compete in another product category with Microsoft. That’s because Sony has to rely on other companies to make its software. We’re the only company that owns the whole widget–the hardware, the software and the operating system. We can take full responsibility for the user experience. We can do things that the other guy can’t do.” Steve Jobs, 2002.
Apple’s “whole widget” approach has become legendary since Steve Jobs described it fifteen years ago, but since the company was stabbed in the back by trusted iPhone partners turned copycats, it has intensified this approach.
You got to own it
Traditionally, Apple has achieved success by creating unique user experiences.
This focus that has served it well, enabling it to carve a highly profitable business in a deeply competitive industry, despite two damaging disasters:
- Microsoft's alleged attempt to emulate the Mac with Windows;
- The invasion of the Android UI snatchers.
Both events damaged the AAPL bottom line, and both revealed that software patents aren't protection enough.
You need to control the primary technology.
That’s what the company is trying to do.
Apple under Tim Cook makes no bones about this. Cook has been crafting a business built around proprietary tech for a very long time.
The move to acquire Beats gave it a majority slice of the headphone market and a powerful service offering (Apple Music); PA Semi and Passif Semi gave it the industry’s best mobile processor; the Authentec, PrimeSense, VocalIQ, LinX, and other key purchases mean many of the components used inside its devices are unique to Apple, which is why competitors can’t support the same deep system level integration.
With each investment, Apple becomes harder to emulate. The logic is simple: “if they can copy the software, let's also invent the silicon our software runs on”.
That's the significance of control of the primary tech.
Pushing things forward
Apple isn't shy about this.
"Today we do much more in-house development of fundamental technologies than we used to," Apple Chief Financial Officer Luca Maestri said at a February conference. "Think of the work we do on processors or sensors. We can push the envelope on innovation. We have better control over timing, over cost and over quality."
The thing is, the nature of business is that third party partners who become successful by working with Apple on key technologies are under shareholder pressure to work with other people too.
That's fair enough, but when Apple’s business has become the cash cow for key partners it can easily be argued that Apple’s success helps drive R&D spending that is then used by its competitors.
The tired hacks, fortune tellers and pusillanimous philosophers often criticise Apple's power to innovate. Such cynicism got a boost this week, when Apple admitted it dropped the ball on its professional Mac audience with the Mac Pro.
Reading between the lines I think Apple has changed its plans, because it now realises it needs a Mac Pro with the horsepower to drive the creation of VR, AR, and AI technologies on which it is about to stake its future.
Why else has it taken the company three years to realize it needs 18 months to announce something new? That sounds like a strategic change to me, not an error.
The HTC Vive is the best shipping VR solution in the world right now. The system depends very much on the support of a powerful PC. This seems to be the model behind VR systems from others. Why would Apple be different?
Everything is connected
Everything is connected. The wealth of the mass is tied to the greed of the few. Imbalance in this – and in anything else -- has consequences.
Through this lens recent Apple announcements both seem to lead in the similar directions.
We know an Apple-developed GPU may provide the kind of technological chops to enable Siri to become smarter, as well as delivering the power to drive these “amazing” AR experiences Tim Cook keeps banging on about. We know the Mac Pro may be part of this. And those Mac on ARM rumors just don’t seem to want to disappear.
If Apple is now moving gung-ho forward on AR experiences, then it's reasonable to expect company management to try to focus every element of the company's platform on the new tech.
We're certainly seeing it's platforms become more focused as part of a whole – the macOS rebranding exercise last year wasn't just cosmetic. From Swift through to Metal, we see each of the platforms begin to share key technologies.
Meanwhile development of the A12x chip is no doubt accelerating, only this time helped by the 25 members (so far) of Imagination's developer team Apple has hired in the last few months.
That's why when you compare Imagination's news this week that Apple intends ceasing licensing payments within eighteen months with Apple’s announcement that it won’t have a new Mac Pro for between 12-18 months, it's hard to avoid speculating that there may be a connection between those two time frames. What is the nature of the reality distortion the company plans to reveal?
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