Should Apple Fear HTML 5? Not a Chance

Steve Wildstrom / September 12th, 2011

Apple-Think DifferentIDG News Service’s Leok Essers has an article in which a couple of financial analysts predict dire consequences for Apple from the growing adoption of HTML 5, a technology that allows web pages to behave much more like native apps.

Toni Sacconaghi Jr. of Bernstein research thinks HTML 5 could reduce Apple’s operating profit growth through 2015 by 30%. Jeffrey Hammond of Forrester Research argues that adoption of HTML 5 will squeeze Apple by increasing the commoditization of both hardware and software.

This sort of analysis fundamentally misunderstands the nature of Apple’s success. The first question you have to ask yourself is why, if HTML 5 is such a threat to Apple, why is it embracing the technology so aggressively?  When the iPad was introduced in early 2009, Steve Jobs famously rejected Adobe Flash in favor of HTML 5 for providing media content and rich apps and a browser, a stance from which Apple has never wavered.

The fact is that no company is better at resisting commoditization than Apple. It does this through relentless focus on user experience. “It just works” may be a Jobsian cliche, but it is the essence of Apple. It provided a breakthrough user experience with the original iPhone, which relied on Web apps that are not nearly as good as what HTML 5 offers, it did it again with native apps on later iPhones and the iPad, and it will do it with HTML 5.

The one area where Apple may be hurt a bit will be the ability of HTML 5 web apps to go around the iTunes store and the 30% of sales that Apple takes off the top. But that’s not where Apple makes its money. In the June quarter, all iTunes Store revenues, including apps and content, accounted for only $1.6 billion of Apple’s $28.6 billion in revenues.

A bigger threat perhaps is that in a world of HTML 5 web apps, Apple will lose the curatorial control that the App Store has provided. While Apple’s “control-freakery” has been much criticized, this curation has maintained fairly highly minimum standards for iPhone and iPad apps and has avoided the chaos of the Android Market. HTML 5 will loosen control somewhat, but I suspect that Apple will find a way to keep that user experience coming.

 

Steve Wildstrom

Steve Wildstrom is veteran technology reporter, writer, and analyst based in the Washington, D.C. area. He created and wrote BusinessWeek’s Technology & You column for 15 years. Since leaving BusinessWeek in the fall of 2009, he has written his own blog, Wildstrom on Tech and has contributed to corporate blogs, including those of Cisco and AMD and also consults for major technology companies.
  • Cambo

    You mean lack of user experience. Ice Cream Sandwich brings uniformity among the platform and therefore ends fragmentation. This ends the only advantage iOS has. The android market will explode as no developer wants to be left out of the biggest money pot out there. iOS 5 and beyond will only be playing catchup. Notice how Apple has shifted it’s superiority complex gameplan and started adding features/revisions LONG overdue after Android took over the market. They are also making “budget” handsets TO COMPETE with lower end Android phones. I thought everyone was trying to copy Apple? In reality someone took the original idea and decided instead of recycling the same archaic OS over and over again, they would do some actual innovation. “But… But… It just works!!” Yeah I could give you tons of analogies of stuff that works good, but is old and has innovative, new and better siblings. Wake up, Apple isn’t top dog.

    • John Dingler, artist

      I am calling your bluff: You say that you “could give you tons of analogies…,” yet you do not follow up on your wild-eyed assertion. That’s because you don’t have a ton. If you did, you would list them. You are done.

      • Cambo

        Christ man, do you want me to list everything old and then an updated version of it??

        Every new generation of cars
        CRT –> LCD/Plasma
        Every new generation of processor achitechture
        Stereo –>5.1–>7.1
        Refrigerators 10 years ago –> Refrigerators today
        HTML 4 –> HTML 5

        Do you want me to keep going? I didn’t think the concept was that hard to grasp..

        • Vito Solerno

          Six is not tons. Give us tons as you said you could.

          • Cambo

            There’s not just six when you break those categories down to specific models. If you want more examples..

            Film cameras –> Digital cameras
            Digital cameras –> DSLR cameras
            vhs –> DVD
            DVD –> Blu-Ray/HDDVD
            Older printers –> Newer Printers
            Windows 3.1 –> Windows 8 and everything in between
            Ball mouse –> Optical mouse
            Optical mouse –> Laser mouse
            First version of microsoft office to current version (name any software for this category..)
            Lead paint –> Latex paint
            Old guns –> Modern Guns
            Old car engines –> Today’s more efficient engines
            Old medical science –> Today’s medical science
            Floppy Disk –> CD
            8 track –> cassette
            10/100 –> Gigabit ethernet
            3g –> 4g wireless

          • NJ

            I’d like to point out a few errors with your thinking. First off, I may not agree with you, but don’t feed the trolls, seriously. It’s better for your mental well being.

            Anyway, Apple doesn’t release “budget” devices to compete with low end Android phones. They don’t even have a budget product development team. They just keep producing the previous generation iPhone and sell them at a lower cost to get more of a user base out of people who may not feel comfortable paying hundreds of dollars for a phone.

            I haven’t used or seen the latest iteration of Android(has honeycomb even been fully rolled out yet?), so I won’t make myself into an idiot by commenting on that.

            As far as your list goes, you have some flawed ideas about what’s better. I agree with some of them, VHS to DVD for example, or newer software versions. However not all of those things are particularly better. Just newer. Film vs Digital is still a bit of a debate, as some photographers even to this day prefer to use film over digital. For whatever reason, they think it’s better. Also, DSLR = Digital.

            Ball mice vs optical mice is another one I have some points of contention about. Optical mice don’t work very well on all surfaces. Try using one on glass. On the other hand, ball mice tend to not react as well and get gummed up pretty badly. It’s a trade off. Laser mice are superior though.

            Old car engine vs new car engines. How old? Car engines haven’t changed very much in the past ~50 years. In some ways some newer cars are less efficient, though not to the fault of the engines necessarily.

            Floppy disk to CD, I don’t think is a fair comparison. Floppies are (practically) infinitely re-writable and tend to be a little more durable. CDs have much higher storage but they get damaged very easily, and though they are rewritable, I tend to find that it’s tedious to reuse CDs rather than simply using something like a thumb drive or an SD card. It would be more apt to say, for example, floppy disk to flash storage.

            10/100 Ethernet vs 10/100/1000 Ethernet is really pointless for anyone who isn’t running a server. Almost no consumers use ethernet for anything other than attaching to a home network or modem. I don’t foresee consumers using ethernet for clustering, for example, and I dare you to find internet in this country that goes over 100 megabits and can possibly be afforded by anyone who isn’t making high 6 to 7 digits a year. It is “better” but at a higher cost that no regular person could take advantage of.

            Finally, true cellular 4G isn’t out yet. It’s WiMAX, which is an evolution of 802.11, not cellular, and LTE, which IS an evolution of cellular but hasn’t quite met the true requirements of 4G standards.

  • Cory Maloy

    Steve, I agree. Apple is not worried about HTML 5 at all. It is interesting though to watch companies such as the Financial Times develop HTML 5 websites instead of apps to protect their subscription fees through Apple. Even more interesting to watch Apple toss out the FT app for doing it. I suspect there is more to that story than simply tossing them out for developing on HTML 5.

  • Good post, and good explanation. I think Apple’s iOS App Store may actually benefit indirectly from that loss of curatorial control, or at any rate, the damage may be largely contained. As people learn that HTML 5 web apps are of uneven quality, the App Store will remain a go-to source for reliable apps, if not quite the variety that the web at large offers. Other reliable libraries will no doubt develop, and that’s all to the good (for choice and to keep Apple’s App Store on its toes competitively), but I agree that the App Store will keep a place in the market.

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