“Platform wars” - Charles Arthur at Online Information
At Online Information this year Charles Arthur was talking about the platform wars that he has recently written a book about, inspired by a call from a publisher’s agent who observed that Apple, Microsoft and Google “always seem to be fighting each other.”
Much of the narrative was about Microsoft losing their dominance in the market because they had under-estimated their opposition. It had taken a while to see Google and search as a threat, and even then the company spent less than Google to try and claw back the situation. Their entry into the music hardware market had been a disaster — Charles showed a graph which illustrated how Zune hit the stores just as the explosive growth in mp3 player sales was ending. He observed that “it was rather sad really. A company that used to drive entire markets” getting it completely wrong.
I do sometimes think Microsoft don’t get enough credit for the XBox however. Many scoffed when they said they were going to enter the gaming hardware market, but another chart Charles showed illustrated that the install base of that console was equal to the install base of RIM’s BlackBerry devices.
Charles pointed out that one of Apple’s under-valued strengths was their supply chain, which allowed them to ship huge volumes of products to multiple markets.
(Although not, it must be said, to the telco who has so far had over twenty days of not delivering my upgraded Apple phone…)
A killer stat from his slide deck was that with global penetration of over 80%, mobile phones had actually been adopted by more of the planet than electricity.
Looking at the tablet market, Charles said it was too early to declare a winner. I must say over the last few days I’ve had an eye-opening experience in the differences between the tablet and more traditional forms of computing. My daughter, aged three, has just started trying to play the games on the Cbeebies website, and was at the Museum of London at the weekend trying to use their interactive Flash-based games. It was incredible watching her struggle to control laptop trackpads or a mouse on a desktop PC, compared to her effortless use of iPhones and iPads where she is capable of playing really quite sophisticated games. A real reminder that touch manipulation of objects is so much more natural to humans than point-and-click.
In the Q&A afterwards Charles did a little bit of star-gazing about the future, and said that often a problem is that people think “the future is going to be just like today — but a little bit more so.” He saw a very different future with flexible displays, zero data costs, and machines which were no longer the “black mirror” in your hand, but which had an incredible wealth of cached information on them and which could interact everywhere on your behalf. “15 years ago you could barely read an SMS on your phone, let alone choose to read your newspaper on it” he said, predicting that Moore’s law will keep chugging away, and the real challenge will be making money out of publishing.
One of the key points Charles made during his talk was that we need to see where each of these platforms is positioned. He posited that you could plot them on a chart where one axis ran from “Few users” to “Many users”, and the corresponding axis was “More money per user” and “Less money per user”. This led to some interesting quadrants. He called “the quadrant of niche-ness” where you had fewer users, but could get a high return per user out of them. He placed Windows Phone and (just about) RIM in this area. “The quadrant of commodity” was where there were many users, but you couldn’t get a high yield from them. This was where he placed Android. In the opposite corners were the “quadrant of doom” — low users, low value — and the “quadrant of dominance”, which was where he placed Apple’s iOS, with a large audience and lots of ways to monetise them.
But I’ll finish with Charles Arthur’s best quote, when being asked if Linux and Open Source would have more of a role to play in these platform wars in the future:
“If you are expecting to see Linux on the desktop, then don’t hold your breath. Because you will die.”
Charles’ book “Digital Wars: Apple, Google, Microsoft and the Battle for the Internet” is available now.
Also appearing in this session was Lucia Adams of The Times, talking about the British newspaper’s journey into digital. I’ll have my notes from that session next.