August 30, 2011
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Innovative Days Ahead of Us: On the departure of Steven Jobs and the need to open up iOS
The news of Steven Jobs' resignation as Apple CEO has caused misty-eyed reactions throughout the industry. Many comments appear more like obituaries, complete with summaries of Jobs' career since the 70's. In contrast, Jobs´ own message to the Apple community is characteristically optimistic and forwarding-looking, expressing his intention to continue his contribution to Apple´s success and claiming that the company´s "brightest and most innovative days are ahead of it". For that to be the case, Apple needs to focus on the spirit of innovation that brought it where it is today.
Innovation is key not only to the iPhone's outstanding market share, but also to Apple's rather extreme profitability. It is the combination of innovative hardware and software that motivates the premium price on the IPhone compared to competing, mainly Android-based, devices. Ironically, Android overshadows iPhone/iOS on market share, but the bulk of profit remains with Apple. This may not remain the case; over time, Google/Android's ability of to harness the innovative capacity of a larger ecosystem will put pressure on Apple's margins.
Innovators in the Apple/iOS echo-system are limited by the narrow scope of the iOS SDK and the rules stipulated in the Apple Developers Agreement. These limitations have not stopped a large number of developers from successfully launching games and other apps through the App Store, but Apple has reserved for itself the right to launch game-changing applications that require deeper embedding.
Apple is feeling the pressure from Android and is opening up, at least a little bit. Traditionally, iOS has not allowed "background" applications from third parties, thus effectively prohibiting VoIP and chat applications from being usable. Now it is possible for companies like Skype and Spotify to provide iOS Apps that can run in the background, increasing their usability and success. However, this is not an option for all third party developers. In a resentful blog post earlier this summer, Devicescape (developer of the "EasyWifi" login client) announced the withdrawal of their app from the App Store in light of increasing difficulties with iOS (see: http://blog.devicescape.com/2011/06/10/ios/).
In the name of innovation, Apple will hopefully continue to open up iOS, allowing applications from companies like Devicescape and Birdstep to reach their full potential. If they do so, bright and innovative days indeed seem ahead for the Cupertino giant, as well as the larger Apple community.