Platforms – Tech.pinions

Multi-Device, Multi-Platform, Companion Apps

The heart and soul of any good piece of application software—regardless of the device on which it runs—is its ability to allow you to achieve a task, find a piece of information or essentially get something done. Well-written software is built from a solid awareness of the steps that go into achieving a particular outcome and provides the features and functions that an end user needs and/or wants to follow those steps and attain their desired goal—whether that’s creating a digital work of art, chasing dragons, or finding directions to your favorite restaurant.

Most applications are, understandably, designed to achieve all of those tasks on their own—that is, all the functions necessary to complete the desired goal lives within the software itself—although it may access external data sources—and runs on the device for which the application was written. One notable exception to this rule is software plug-ins, which can provide additional functionality to a “host” application environment: for example, image filtering tools for Adobe Photoshop or audio processing add-ons for digital audio workstation software like Cakewalk’s Sonar or Apple’s Logic. Plug-ins, however, run within the same environment and on the same device as the home program.

A more important trend that is starting to emerge is the arrival of multi-device, multi-platform companion applications. These are apps that run on devices other than the host, yet work hand-in-hand with the host application, allowing the separate devices to more easily or more fully achieve a task than either device could do on its own. These types of apps represent a potentially huge new opportunity for app developers on all types of platforms that, I believe, could transform the world of mobile—and PC—software. For one thing, they allow applications—and individuals—to easily cross the gap between different platforms and devices. Want an Android or iOS app that truly works with your Windows PC? No problem—at least conceptually.

In fact, because companion apps acknowledge and embrace the multi-device, multi-platform reality that we virtually all now live with every day, they represent an exciting path for the future. Plus, they avoid the all too common problem of trying to adapt a popular application on one device to another by just building a cut-down—or beefed up—version of the app for the new device. A well-conceived, well-written companion application takes advantage of the unique capabilities, input characteristics and other functions of each platform, and yet lets you more fully achieve or enjoy the task at hand with your set of devices. (Plus, it doesn’t worry about the tedious process of porting or trying to duplicate functionality on another device that isn’t ideally suited for it.) In a word, it makes these often disjointed set of devices and experiences work as a system.

For example, as a musician who writes and arranges songs for my band, I’ve been using MakeMusic’s Finale application on a Windows PC for literally decades. But about a year-and-a-half ago, the company introduced Finale SongBook for the iPad, which takes the music notation files created on a PC and lets you view them digitally on an iPad—turning that iOS-based device into an easily searchable, highly readable digital music library and music stand. It’s a great example of achieving a higher level of capability by extending the functionality of a core application across devices and platforms. A completely different example is DreamWorks’ new Dragons Adventure game for Nokia’s new Windows RT-based Lumia tablets. The game features a clever integration of Nokia’s navigation data into the environment, but even more importantly, DreamWorks also created a Windows Phone-based application that parents can use to build environments or tweak other settings that can be sent over to the game running on the tablet. It’s a simple, yet highly effective way to get the devices—and the people using those devices—working together.

Now, you could argue that companion applications aren’t a completely new idea—but I will counter that mobile-focused, cross-platform, functionality-optimized apps are a relatively recent phenomena and one that I believe will have some exciting and important new entrants in 2014.

Android v. iOS Part 6: The Future

RECAP

Last week, we took a deep dive into the Android and iOS operating systems, looking at market share, profits, developers and platforms. Today we wrap up the series and attempt to peer into the probable futures of these two great mobile operating systems.

The truth is, seeing the futures of Android and iOS isn’t so much about following the signs – there’s plenty of them and they’re almost all pointing in the same direction – it’s much more about unlearning some of the lessons that we’d thought we’d learned. When it comes to Android and iOS, it’s not what we don’t know that hurts us so, it’s what we “know” that just ain’t so. Once we free our minds from past preconceptions, the scales will fall will from our eyes and the broad outlines of what is and what is about to happen will become clearer.

1) It is a mistake to assume that the “best” operating system will “win”

“Best” is a subjective opinion, one of the weakest forms of evidence.

“Best” is contextual. What’s right for one may not be what’s right for another. A school bus is a poor form of transporatation- unless one is a school bus driver. What’s “best” needs to be what’s best for the user, not what’s best for you or me.

“Best” is often irrelevant. Betamax may have been the best video recording device on the market, but it didn’t win out over the VCR. Things such as distribution, production, costs, marketing, first to market, and a slew of other factors often trumps “best”.

Let’s take our focus off of our subjective opinions as to what is “best” and rest our gaze, instead, on objective, measurable, factual information.

2) It is a mistake to assume that any operating system will “win”

Android v. iOS is undoubtably a platform war, however, not every platform war ends with a single standard.

— Musical records split into two standards with the 33 1/3 being used for albums and 45’s being used for singles.
— Gaming consoles are currently split into three different standards.
— Petroleum is split into two standards, with gasoline (the American term) being used for most cars and diesel being used for most trucks and other heavy commercial vehicles.

All of these standards exist side-by-side and serve different markets. And that is what is happening with Android and iOS too. We need to stop focusing on the idea that one mobile operating system is going to serve every market and, instead, start focusing on which markets are being best served by each operating system.

3) It is a mistake to let the exception swallow the rule

An exception to a rule does not invalidate the rule. So long as something is true most of time, it’s worth noting. Too often we focus on the exceptions and let those exceptions blind us to the overall patterns.

It’s important to recognize the exceptions to a rule. But it’s even more important to recognize which is the rule and which is the exception.

4) It is a mistake to assume that market share equals profits for Google

Whenever it’s pointed out that iOS is making a lot more money for Apple than Android is making for Google, or when it is pointed out that that iOS is making a lot more money for iOS developers than Android is making for Android developers, we’re told that Google has a different business model than Apple – that Google is selling eyeballs (advertisements) and that market share matters because every Android device is another pair of eyeballs consuming Google services and Android advertisements.

That’s a fine theory and all except for one thing: It’s simply not happening.

Google’s business model is no where near as profitable as Apple’s. Google gives away Android in order to make money from Google services and Google ads on a per device basis. It is estimated that Google makes $6.50 per device. Apple, on the other hand, makes an estimated $300 per iPhone and Apple sells apps and ads on top of that. For Google’s Android to come close to matching Apple’s, Android devices would have to outsell the Apple’s iOS devices by a factor of 30 to 1. (Source)

Further, Google’s mobile ad model is not working all that well. There is little correlation between Android’s market share and Android’s ad revenue. According to e-Marketer, Google earned $125 million in mobile display ad revenues in the US last year, compared to $92 million by Apple. While that’s 30% more ad revenue than Apple, Google has acknowledged that two-thirds of their mobile revenues come from iOS, not Android, devices.

All in all, Mobile ads are simply not shaping up to be the same kind of money maker for Google that desktop ads are. According to research by Internet Retailer, Invodo, and Comscore, mobile video appears to be a more effective than display ads in converting potential customers into paying customers. And 70% of the retail videos accessed by mobile devices are accessed by an iOS devices, not Android devices. (Source)

An even more disturbing trend for Google is the migration from search to apps. Users are increasingly using apps rather than search, and Apple leads in the app market by the number of apps, the amount of money made in apps, the number of developers developing apps and the “buzz factor” surrounding new apps too. (Source)

Flurry Analytics reports that on mobile devices, 94 minutes per day are spent on apps compared to 72 minutes on the web. Mobile users are spending more and more of their time going directly to an app that gives them exactly the information they want and they are spending less and less of their time searching the mobile web. (Source) That’s good for apps. That’s bad for Google search revenue model.

Android may have market share, but that market share is not translating into dollars – not for Google and not for Android’s developers either. With mobile users trending toward the use of apps and away from the use of search, despite Android’s greater market share, it’s going to become more and more difficult for Google to keep up with Apple’s revenues and for Android’s developers to keep up with the revenues being made by iOS developers.

One final point on profits. I can anticipate the argument that it is unfair to compare Google to Apple – that Google’s business model and Apple’s business models are nothing alike – that Google gives away the Android operating system; that Apple sells both the operating system and the hardware; that, of course Apple makes more money than Google. This argument complete rubbish.

There’s nothing fairer than comparing profits to profits. Profits are the great equalizer. The top lines of companies can often be quite different, but the bottom line is how every company is ultimately measured. It’s not unfair to compare profits – it’s exactly what we SHOULD be comparing.

It is true that Google and Apple have very different business models. So what? Business models are a strategic decision made by the companies themselves. Google chose it’s business model. Now that have to live with the results.

5) It is a mistake to assume that market share equals retention

One argument for the value of Android’s greater market share is the contention that Android gets to new smartphone owners first, builds unshakable loyalty in the Android brand and locks iOS mobile devices out of the market thus insuring iOS’s demise and Android’s future market domination. Only thing is, all of the existing evidence points in to the exact opposite conclusion.

— iOS has a 75% satisfaction rating with Android coming in a distant second at 47%. (Source)

— iPhone has topped J.D. Power’s semi-annual satisfaction list 7 straight times. (Source)

— iPad has an astonishing 98% satisfaction rating. (Source)

— iPhone owners are the least likely to switch from their carriers – even when that carrier’s service is deemed to be just awful. (Source)

Goldman Sachs recently conducted an extensive consumer survey of over 1,000 Apple iOS users and reported that:

— 71% of respondents are “highly likely” to choose an Apple device for their next tablet or smartphone purchase, while 23% are “likely” to stick with the platform. In other words, 94% of respondents are “highly likely” or “likely” to purchase their next tablet or smartphone from Apple. Only 1% of respondents said that their next device purchase was “unlikely” or “highly unlikely” to be from Apple. Further, a surprising 21% of respondents to the survey said: “there isn’t a discount that would make it worthwhile” to leave the Apple platform. Now that’s brand loyalty.

— A study by Gene Munster at Piper Jaffray indicates that only 47% of Android users expect to buy another Android device and 42% expect to buy an iPhone. (Source)

— Another study by Gfk in the UK indicated that 84% of iPhone users will repurchase an iPhone compared to just 60% who would repurchase an Android phone. (Source)

— A survey of more than 2,000 smartphone users by Robert W. Baird analyst William Power shows that 48% of Android smartphone users plan on buying another Android device for their next smartphone while 17% say they plan to buy an iPhone and 34% say they’re undecided. The story is much different for fans of Apple’s smartphone, however, as 77% say they plan to buy an iPhone for their next smartphone, with just 5% planning to switch to Android device and 18% still undecided. (Source)

Android may be winning the race to the new smartphone consumer, but Android is not retaining those users. Switching is primarily a one way street, with Android users going from Android to iOS, but iOS user seldom leaving the iOS platform.

6) It is a mistake to assume that market share domination equals app ecosystem domination

When it comes to platform, developer share – not end user market share – is what matters. And iOS dominates Android in developer share.

iOS developers are paid better, develop for iOS first and iOS customers buy more apps and pay more for them.

It has been argued that Android’s platform is every bit as good as the iOS platform. That is demonstrably untrue.

— iOS overall developer revenue is six times greater than Android developer revenue. You don’t generate that much more revenue without having first generated much more value to your customers.

— There are over 43 thousand Apple iOS developers and 10 thousand Android developers. 33 thousand additional developers add a lot of value to the iOS platform.

— There are seven iOS apps for every three Android apps. Arguing that more apps has no more value than less apps is not an argument, it’s an assertion that reality doesn’t exist.

Argue as loudly as you like that the Android platform is as good as the iOS platform. The iOS developers, the iOS apps and the iOS buyers will shout you down.

For additional details and sources, see: Android v. iOS Part 4: Developers

Some day, all this may change, but if it does change, it will be because of a change in developer share, not a change in market share.

ANDROID IS THE SUPERIOR SMARTPHONE DEVICE. IOS IS THE SUPERIOR PLATFORM

Android and iOS have different inherent strengths and weaknesses and instead of fruitlessly trying to decide which operating system is going to win everywhere, we should be focusing our efforts on determining which markets each OS is destined to dominate. Neither Android nor iOS is going away. Instead, each OS is going to go their separate ways.

Android’s value is in the device. iOS’s value is in the platform. Android will take the low end of the market. iOS will take the high end.

Android will appeal to third-world nations, emerging markets, tech aficionado’s who admire the virtues of “open”, those who require more freedom, those who require more options, those who require more diversity, those who use a single device, the cost conscious, and those who admire the value of free.

iOS will appeal to more established nations, maturing markets, non-technical users who admire the virtues of easy and intuitive, those who require more security, those who require more consistency, those who require more integration, those who need multi-device management across multiple device form factors, the quality conscious, and those who fear Google’s ad-supported business model.

iOS will appeal to Enterprise, businesses, governments, institutions, organizations, and other entities that require more structure and control. (As one who lived through the Windows v. Mac wars, the irony of this statement is not lost on me.)

THE ONCE AND FUTURE PRESENT

“It’s tough to make predictions, especially about the future” – attributed to Yogi Berra

The truth is, we’re already living in the future of the Android and iOS operating systems. Both are well along on their respective paths. The future is going to be much the same as the present – only more so.

Android will continue to grow like a weed. iOS will continue to grow like a well tended farm.

Android will continue to rapidly iterate their hardware and their operating system. iOS will continue to relentlessly integrate their hardware with their software and their platform ecosystem – methodically moving both their iOS and their OS X software platforms forward together in lock-step.

Android will continue selling a mind-numbing array of diverse products. iOS will continue selling products like the three year old iPhone 3GS because iOS’ value is found primarily in the platform, not in the the device itself.

These two great operating systems actually complement one another. The Yin to the others Yang. And one unintended consequence of that symbiosis is that they will continue to hold the dogs of anti-trust at bay. No one is going to sue Apple for anti-trust so long as Android has most of the market share. And it’s going to be awfully hard to say that Android has a monopoly on mobile phones when Apple’s iOS has most of the profits.

Android and iOS is less about which one is superior and more about their relative strengths and weaknesses. It’s less about how they compete with one another and more about how they complement one another. It’s less about their radically different futures and more about how the future is going to be an extension of the present.

The future is uncertain and there are sure to be lots of twists and turns along the way. But don’t expect this war to come to a head any time too soon. The two sides are too evenly matched and yet too divergent in form. Like Britain and France during the Napoleonic wars, Britain ruled the sea and France ruled the land and seldom did the twain meet. But unlike the Napoleonic wars, don’t expect there to be a decisive battle of Waterloo. A lingering, uneasy state of detente is far more likely.

Android v. iOS Part 5: Android Is A Two-Legged Stool

RECAP

This week we’ve been looking at the Android and iOS mobile operating systems. In part 1, we looked at how Android was dominating market share. In part 2, we looked at how iOS was dominating profit share. In part 3, we tried to reconcile that seeming paradox. Turns out that, with regard to platform, developer share – not market share – is what gives the platform its value and developer share is what makes a platform strong. In part 4, we showed that iOS was, by far, the stronger of the two platforms. Today we look at why iOS has an inherent advantage in platform, why Android has an inherent disadvantage in platform, and what that means for the futures of these two great mobile operating systems.

A PLATFORM IS MUCH MORE THAN JUST HARDWARE AND AN OPERATING SYSTEM

A computing platform is made up of (at least) three parts: hardware, operating system and an application ecosystem. An application ecosystem is also make up of three parts: well-paid developers, a high volume of quality applications (apps) and lots of happy customers buying those apps.

Android boasts some of the finest hardware in the world. And their operating system is arguably second to none. The Google team is world class. Their operating system is chock full of features and it iterates at an incredible pace.

But when it comes to application ecosystem, iOS rules and it isn’t even close. While Apple’s iOS leads the world in profits, apps, well-paid developers, paying customers, customer satisfaction and retention, Android leads the world in:

— Malware (Source)
— Piracy (Source)
— Cloning (Source)
— Confusing buying options (Source)
— Belated operating system updates (Source)
— Hardware fragmentation (Source)
— Underpaid developers (Source) and dwindling developer interest; (Source) and
— Customers who won’t pay for Apps (Source)

WHEN IT COMES TO PLATFORM, iOS HAS AN INHERENT ADVANTAGE

As Tim Bajarin previously wrote for Tech.pinion in “How Apple is Cornering the Market in Mobile Devices“:

“While all of (Apple’s competitors) think that they can compete with Apple when it comes to hardware, and maybe even software, what they all pretty much know is that the secret to Apple success is that they have built their hardware and software around an integrated ecosystem based on a very powerful platform. And it is here where their confidence level lags and the “iPodding” fears raise its head. And to be honest, this should really concern them.”

“Apple is in a most unique position in which they own the hardware, software and services and have built all of these around their eco-system platform. That means that when Apple engineers start designing a product, the center of its design is the platform . For most of Apple competitors, it is the reverse; the center of their design is the device itself, and then they look for apps and services that work with their device in hopes that this combination will attract new customers. In the end, this is Apple major advantage over their competitors and they can ride this platform in all kinds of directions.”

WHEN IT COMES TO PLATFORM, ANDROID HAS AN INHERENT DISADVANTAGE

Android is based on an “open” philosophy. In software and web-based architectures, an open platform:

“describes a software system which is based on open standards, such as published and fully documented external programming interfaces that allow using the software to function in other ways than the original programmer intended…” – Wikipedia

Open has many advantages – but it has many inherent disadvantages too. The very same open policies that make Android’s sales stronger are the very same open policies that make Android’s platform weaker.

An open policy towards carriers encourages rapid dissemination of devices but it also permits the carriers to take unwanted liberties with Android’s core services and allows them to shirk their responsibilities with regard to operating system updates. An open policy towards manufacturers allows for rapid hardware iteration but it also creates rapid hardware fragmentation. An open policy towards the sales of applications leads to a wide variety of apps but it also leads to a wide variety of piracy, cloning and malware too. An open policy towards the operating system allows for rapid feature iteration but it also allows competitors to split off a confusing variety of competing operating systems and App Stores too.

Open is not bad or good, it’s a tradeoff. But what open giveth Android in sales, it taketh away in application ecosystem. The very same things that makes Android sales strong are the very same things that makes Android’s platform weak. It’s inherent and intractable. The only way to make Android’s platform stronger is to make it less open. And the less open Android becomes, the fewer advantages in sales it has.

THE ANDROID PLATFORM RESTS UPON A TWO-LEGGED STOOL

A stool needs at least three legs to support it. A platform needs at least three legs to support it too. The first leg is hardware. The second leg is operating system. The third leg is application ecosystem. For the sake of argument, let’s assume that the Android hardware and the Android operating system are equivalent or superior to iOS.

Android’s third leg – its application ecosystem – is weak. Terribly weak. And just as two legs are insufficient to support a stool, the two legs of hardware and operating system – no matter how strong – are insufficient to support a computing platform.

The Android and iOS wars are not what they’ve been made out to be. The combination of great hardware, great operating system and an open architecture has made Android THE premiere smartphone of our times. The sales numbers prove it.

But the story doesn’t end there. The combination of great hardware, great operating system and a great application ecosystem makes iOS THE premier smartphone platform of our times. The profit numbers prove it.

Android aspires to be a great device. iOS aspires to be a great platform. Both have achieved their objectives – which will lead them down radically different paths with radically different futures.

Coming Next Week: Android v. iOS Part 6: The Future

Android v. iOS Part 1: Market Share
Android v. iOS Part 2: Profits
Android v. iOS Part 3: Network Effect
Android v. iOS Part 4: Developers