Subba’s Serendipitous moments

April 14, 2010

Is Apple rewriting history?

Filed under: Business,Competition,Model,Perspective,Strategy — Subbaraman Iyer @ 12:27 pm
Tags: ,

 

Recent moves by Apple clearly indicate that Apple seems intent on rewriting history. Time will tell whether this is a brilliant move or a move that is just more than a misstep!

First, the attempted lock in of developers into its walled garden. The garden may be beautiful, but it is walled; not open. So far Apple has defied the odds of making its  walled gardens innovative and “developer friendly”. Now it is offering a mixed bag.

The iPhone and iPad is becoming a closed system which Apple only can control. Its current rift with Adobe is well known. The fight with Adobe is not about Flash but Apple’s fundamental approach to developers . Apple is insisting that all apps be developed using Apple’s proprietary tools with its SDK and discouraging porting of apps developed on other platforms based on its most recent license agreement. It clearly is an affront to all developers alike. It is clearly a move to limit developers from building apps for other platforms (read: Android)

Second, as a sop to developers, than as a new line of business, Apple offered the iAds an advertising platform for developers and offered to share advertising revenues. Advertisers can place ads in apps and when clicked direct users to a web site without leaving the app. Apple would serve up the ads and offered to give developers 60% of the advertising revenue to developers.

Just another way to keep the developers of more than 180,000 apps happy and help them make some money in the process!

As much as the media portrays this as yet another battle between Apple and Google, I do not see this way! The entire market for mobile advertising is less than U.S. $ 500 million accounting for just 2% of the total U.S. online advertising market. The revenue stream for Apple is insignificant. It is clearly a battle for keeping the developers firmly in the Apple fold and trying to deprive Google to build the developer community for the Android platform.

So make no mistake: It is not Apple taking on Google for advertising dollars, it is about developers!

Will the walled garden work or will open systems succeed or will both co-exist? Time will tell!

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1 Comment »

  1. it’s brilliant that apple came out with the idea to share the profit with apps developers. some find it fun to develop apps but it’s talking bout dollar and cents when it comes to making money out of it!

    Comment by android — November 3, 2010 @ 4:07 pm | Reply


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