Every once in a while Atlas shrugs. IBM’s consumer division sale to Lenovo, Apple’s culling of the clone industry and now HP’s withdrawal from the high-volume/low margin market all signify far greater trends than a mere assessment of their respective companies’ bottom lines. Recent news that HTC’s interest is piqued by the availability of WebOS and MeeGo shows that the fallout will continue for some time as the various components of HP’s consumer-behemoth are sold off, placed on hiatus or dutifully buried. It is the future of Palm’s offspring, currently on its second ride of the resurrection rollercoaster, that is central to the story. It is a story over which Apple looms large and innovation plays a greater role than units shipped or profit margins.
The world of technology is the perfect storm of management-speak, gobbledegook and marketing slogans. The latest, and most high profile for some time, is Apple’s push of the term ‘post-PC’. There has been some debate, and mockery, of what this term means. Specifically, it is a focus on the end-user experience in an attempt to render the traditional dialogue of the tech world – RAM and Ghz – obsolete. In part this is because of the expansion of the market to people for whom ‘dual core’ is meaningless, thus the experience of a device becomes the best sales tool. Another aspect, however, is that by these traditional measures, Apple’s ‘post-PC’ devices, the iPhone and iPad, cannot compete. In many instances they come with less RAM and slower processors than their rivals. Gone are the days when Apple could boast of the Power PC’s superiority over Intel, and yet, despite this seeming technological handicap, the iDevices not only outperform their rivals at the till, but also in terms of end-user experience.
How has Apple got more out of less and what does this have to do with WebOS? The answer lies in ‘vertical integration’, a terrible piece of management speak that refers to the housing of all the disparate elements of a product under central control. Everything Apple needs for its post-PC devices are directed and controlled by Apple itself: iOS is, of course, developed internally and the ‘A’ series processors, based on ARM architecture, include features designed by Intrinsity and P.A. Semi, both of whom were acquired by Apple. Even Apple’s industrial design team, headed by Jonnie Ive, works in-house and collaboratively with their hardware, the iPhone 4′s antenna being a prime, if flawed, example.
The result is a focused product where the hard- and software can work efficiently together to deliver a highly tailored end-user experience. With such streamlined design the iDevices simply do not need so much RAM for example, hence why their seeming ‘lack’ does not affect the product and why Apple is right, though self serving, to move away from specifications as a path to sales. In selling, a key factor is price, and the component efficiency that sees less RAM needed means lower costs, higher margins and more available units compared to the competitors. Android tablets have struggled to gain feature/price parity with the iPad, a pattern that seems to be repeatedwith the MacBook Air derived ‘Ultrabook’ standard currently being promoted by Intel.
WebOS’s role in this? The purchase of Palm gave HP access to WebOS and the building blocks of vertical integration. While Google’s Android has resulted in a disjointed experience that has caused the search giant to exert tighter quality control over its operating system – though not to iOS’s extent – WebOS would have been a focussed product fully integrated with HP’s hardware. The Apple parallel, though HP would have still lacked true hardware design integration, was even referenced by HP exec Jon Rubenstein at the launch, and lacklustre reception, of their iPad competitor, the now defunct Touchpad. Citing WebOS as where Apple were at the transition to OSX – itself an acquired technology from the purchase of NeXT in 1996 – was probably not wide of the mark. Furthermore, WebOS’s unique, ground-up, internet-centric approach and the rising prominence of the Cloud could have placed HP at the forefront of future innovation. Whilst HP CEO Léo Apotheker’s decision to focus on corporate services is perhaps unsurprising given his background in enterprise software with SAP, the timing poses questions of what now for WebOS and its undoubted potential, and how to compete with Apple.
Seemingly, it is not just HP that sees, or rather saw, vertical integration as a path to competitiveness. Google’s recent purchase of Motorola’s Mobility division is most often linked to the ‘patent wars‘ currently taking place between Redmond, Cupertino and Mountain View. However, this purchase provides the hardware accompaniment to Google’s software. Similarly, Microsoft’s come-hither eyes at Nokia, with the dowry of Windows Phone 7, provide a closer hard- and software relationship in the touch-device market, albeit at MeeGo’s expense. As noted, such integration and relationships help drive costs down so that price-point and user experience create a product in demand. This demand is perhaps the most troublesome aspect for Apple’s competitors, as even those tablets which are modelled heavily on the iPad’s features and user-experience have failed to sell. The Samsung Galaxy Tab, which Apple argues is too closely related to (Kubrick’s?) iPad, may have sold as few as 20,000 units. There appears to be a demand, not for tablets, but for iPads.
This invokes the key point of vertical integration: without it, ‘me too’ products are created as the result of using off-the-shelf components to follow, rather than lead, the industry’s trends. Apotheker even recognized the importance of innovation and ‘coolness’ in an interview with the BBC, saying: “I hope one day people will say ‘this is as cool as HP’, not ‘as cool as Apple’.” Innovation translates to cultural cache and demand, Apple coined ‘post-PC’ because it had a new, innovative and highly marketable product. Dovetailing a derivative device with outmoded marketing will not, and has not, captured the public’s imagination.
The availability of a well regarded operating system like WebOS provides an opportunity for greater competition in the market. With rumours of Apple delaying development of the third generation iPad due to a competitive vacuum, the importance of a genuine challenge cannot be stressed. Whilst Google and Microsoft have already set their wheels within wheels in motion it is not just who buys WebOS that will finalize the battle lines. The missing fragment from much of this discussion has been another area of Apple’s dominance: content. iTunes provides a content eco-system millions of people have bought into. Microsoft have a similar level of traction in the business realm and Google’s services are used by almost everyone with a computer. Yet the tablet sector, as defined by the iPad, is unsurprisingly suited to content consumption rather than content creation. It is perhaps from the giants of sales, Amazon and Barnes & Noble, that further competitors may yet emerge.
Mr Needlemouse runs the Japan-based games blog The Needlemouse. Check it out for informed debate, opinions and reviews about games past, present and future.