Saturday, March 30, 2013, 10:28 am PT (01:28 pm ET)
Editorial: Where does Apple take iOS next?
Let somebody else do it
An even easier way for Apple to expand its iOS hardware business would be to take a page from its wildly successful App Store experiment and let third parties try things out, paying Apple a cut for managing their operations with market infrastructure and promotion. That's essentially what Apple has done in the area of speakers since the iPod HiFi was canceled.
Apple doesn't seem to get enough credit for the App Store's success because few observers yet realize what an incredible job Apple did with it. It's not that the App Store is flawless or impossible to criticize; it simply works for its intended purpose. It creates lots of high quality software for iOS, and does so self-sustainingly. Or more accurately, it does so at a significant profit.
Apple did such a great job at implementing and curating the App Store that the industry at large has assumed that it must be really easy to do. Google announced they'd replicate its success even "more openly" and with fewer restrictions and the media ate it up. But five years later, Google Play is still vastly impoverished as a software source, and the rest of the Android markets, including Amazon's, are also still hobbyist outlets that feel like a Ross Dress for Less compared to Apple's Bloomingdales experience.
Palm scoffed at Apple's entrance into smartphones, but then observed its own Palm OS software market collapse into irrelevance. Nokia, Blackberry and Microsoft also operated major mobile software platforms prior to Apple, but their stores couldn't even copy Apple's fast enough to remain open. And new stores they've reopened since, closely following the pattern of the tremendously successful App Store, have also failed to garner much interest.
Apple's App Store is essentially a venture capital fund without the capital. It encourages entrepreneurial experimentation, and rewards the best work with huge exposure to a vast global audience. You get funded only after you deploy your work successfully, making it an intense meritocracy that's really difficult to duplicate from scratch in competition. At this point, copying the App Store is like copying Microsoft's Office suite or Adobe's Photoshop.
The App Store seemingly should have failed due to the catch-22 at its launch of there being both a limited installed base of iPhones and no existing software. That combination of issues has doomed lots of aspiring platforms. But Apple's fledgling store was helped by the fact that Apple itself had created some killer apps (including Safari, Maps and Mail) that were enough to spark interest in the new iPhone even before there was a third party platform for it.
Of course, it also helped that Apple had a half decade of experience with iTunes, curating audio and video content and experimenting with iPod game sales. The conditions were perfectly set up the moment the iPhone was primed to ignite an App Store.
Once having been established, the App Store's success has driven exponential growth. Apple expanded it to the iPad and even replicated it on the Mac. But it also managed to leverage the iOS platform in another way, via its Made for iPhone licensing program.
App Store for hardware
In addition to creating a software ecosystem for iOS, Apple has also launched a hardware accessory ecosystem. From chargers to adapters to speakers and wirelessly connected accessories, Apple's Made for iPhone program essentially duplicates the concept of the App Store for hardware. And as with the App Store, the road toward "Made for iPhone" had been paved by previous efforts to license accessories for iPods.
Given its current licensing programs, Apple doesn't even need to launch a watch of its own. In fact, its retail stores already stock a variety of watches and sensor bands, even "wearables" for your pets. A variety of other health and sports activity devices for everything from running to biking already exist, along with AirPlay speakers and AirPrint printers.
Apple decided years ago that it doesn't need to build printers and cameras. But today, it can not only sell other makers' products, but can in many cases even earn licensing fees in addition to retail profits. While AirPrint is apparently free, AirPlay involves licensing fees to use Apple's protocols. The company also has licensing programs for Lightning (and the previous Dock Connector) and wirelessly connected peripherals.
Apple can even wait in stealth mode, observing what the market finds interesting before buying up the most successful accessory makers and taking their products into high volume production. Or it can continue to host a wide variety of accessory alternatives, each of which offers Apple licensing fees to leverage the value of its platform. That gives Apple a variety of options for entering the wearables business without actually launching an "iWatch."
Future software features for iOS 7
What about the future software direction for iOS? Apple has a series of major initiatives it's developing for iOS, many of which are the offspring of acquisitions, including Siri, Maps and iTunes Match.
There are a number of other smart ideas that Apple has cultured in its App Store petri dish of third party developers that it likely should implement as unique, differentiating features of iOS. Again, there's the question of how to best do this.
Apple needs to be careful to not simply stomp on its developers (or give the appearance of doing so). In some cases, it might make sense for Apple to acquire apps that could be integrated into iOS. Consider Snapchat, based on the simple premise of sharing short photos or videos that expire after a few seconds. Or the walkie talkie style messaging of Voxer.
It's hard to see how either free app will effectively monetize its continued existence on iOS, but both could be rolled into iMessages by Apple to expand iOS 7's messaging capabilities and "stickiness" while at the same time making the platform more differentiated (both apps already offer Android ports).
In other cases, iOS might be better served feeding traffic to partner apps, the way iOS 6 integrates with social networks like Twitter and Facebook, or helper apps for directions in Maps.
There's a lot Apple can do on its own, too. Text services continue to evolve; Apple should continue to develop Data Detectors to highlight and activate relevant data, identifying and highlighting dates, locations, contacts, phone numbers, email and addresses in selected text and providing useful actions for them, depending on the context.
It'd be great to see an AirDrop client in iOS 7 for easy desktop file sharing, as well as iCloud support for email certificates for encrypting and signing emails the same what it automatically encrypts iMessages.
Apple's three iPhone models account for three of the top five cameras in Flickr, so why not capitalize on that with more sophisticated Camera app features and image editing? Add support for creating, say, time lapse captures and converting short videos to GIFs for sharing.
What features are you wishing for in iOS 7?
Tending the platform
People like to argue about whether Apple is a hardware company or a software company, but in reality, Apple is a platform company. It builds devices that run a differentiated software platform for third parties to create apps for. The challenge for Apple is to maintain that platform without simply being ripped off by a competitor making cheaper hardware or subsidizing its hardware with ads.
Or, alternatively, to avoid letting the platform grow stagnant and being passed up by competitors who can attract their own, stronger ecosystems to support their own platform instead.
In some cases, Apple needs to develop its own apps, as it has for iLife and iWorks apps. There's no equivalent to these apps for Android, BlackBerry or Tizen, making them key differentiators to Apple's mobile platform, the same way they were for the Mac a decade ago.
At the same time, Apple can leverage its iOS development platform and iTunes App Store to attract billions of dollars in third party hardware and software development, accomplishing far more than it otherwise could if it were trying to build every app and accessory on its own. What, exactly, Apple plans to do with iOS 7 will likely be detailed in a couple months at its Worldwide Developer Conference.
On Topic: App Store
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