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Why Apple needs to retake the core of the iPhone in 2013

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As problems go, Apple’s (s aapl) are the kind most companies would kill for. One of them is particularly fascinating: Having established the most vibrant computing platform of the 21st century, Apple’s own iOS app developers are finding themselves in serious competition with strategic opponents who are duplicating some of the most essential parts of the iPhone. It’s something Apple once tried to prohibit before the federal government forced it to back down.

Last week Facebook(s FB) and Amazon(s AMZN) each revealed new apps and features for iOS: free voice calls from Facebook Messenger (U.S. only), and Amazon’s MP3 store for songs and videos.

On one hand, these apps are a ringing validation for Apple: these companies need iOS and the reach of the iPhone or iPad to reach millions of their own customers. But Messenger isn’t Angry Birds or Snapchat or Evernote; these aren’t just one-off apps from small teams of developers. These apps, along with Google’s trove of well-received productivity, navigation, search and browser apps for iOS show that Apple’s competitors are getting really good at finding ways to systematically insert themselves between Apple and its customers.

Facebook audio messenger appFacebook is not making its own phone (for now). And why should it, when Apple’s phone, already in millions of hands, will do just fine? With the Facebook app for iOS and its cousin apps like Instagram and Messenger, Mark Zuckerberg and Co. clearly want to be the communication and social layer on the iPhone. And Facebook has a decent chance of doing this because they offer iPhone users more than Apple’s stock Messages, Phone and Camera apps.

Google, on the other hand, has its own devices. Yet the company looks to be aiming to own productivity and search on the iPhone with Mail, Drive, Chrome, Search and more. Google has had iOS versions of these apps for a while, but only recently has it buckled down and drastically improved its design and user interfaces.

Meanwhile, Amazon is coming after Apple on hardware with its own tablets and potentially a phone, but it also wants to bring its digital content empire directly to Apple’s iTunes customers via the iPhone, iPod and iPad.

It is good business sense for Apple to encourage and cultivate an App Store with these kinds of offerings — it’s been Apple’s style since the days of the early Macintosh. Plus, the App Store model allows Apple to act as gatekeeper, and it lets it take 30 percent from any sales of or within paid apps.

But in at least one case, we know Apple is uncomfortable with this: it was reported late last year that Apple executives were “seething” over iOS users’ delirious response to the revamped and re-released Google Maps for iOS while Apple’s Maps app was widely mocked. So it’s easy to imagine that what Facebook, Google and Amazon are up to makes Apple CEO Tim Cook squirm a bit too: Apple may still make the best product, but strategic competitors are starting to form deep relationships with iPhone users on the iPhone itself.

The problem

Unfortunately, there’s probably little Apple can do about it. One of the most formative periods in the App Store’s history was the summer of 2009. Apple had been enforcing a policy in which third-party apps that mimicked the “core functionality” of its massively successful iPhone wouldn’t make it past the App Store gatekeepers. That was working for them until a really big fish got caught in this net: Google Voice.

The aftermath of that situation — an FCC inquiry led to Apple (and its partner AT&T(s T)) backing down, letting Google Voice(s GOOG) onto iOS and being way more clear about App Store rules — is a good way to understand why Apple pretty much has to allow its biggest and most avid competitors onto its platform: if they don’t, they risk inviting more federal scrutiny.

What has to happen next

Facebook calling, Amazon music sales and Google Maps wouldn’t be much of a concern for Apple if its own core iPhone apps for talking, texting, calling, taking photos, mapping, addresses, calendaring, purchasing music and more were better than what its competitors are offering. But as the iOS platform matures, it’s becoming more evident that Apple is beginning to slip behind.
Google Maps iOS 6
That wasn’t always the case: In the early days of the iPhone, Apple set the tone for the best design and best user interfaces and pushed the envelope for what the iPhone could do: Safari, Photos, Siri, iTunes, and more were examples of what the best mobile developers should hope to accomplish. Did Apple simply take its eye off the ball — did the iOS team get distracted and let the competition catch up? Will Scott Forstall’s absence make way for better core iOS apps to emerge, or reemerge?

Apple is a mobile hardware and software company, and this dual strategy is what helps it reap the most profits in the mobile industry. But without keeping others from making gains into core parts of that hardware-and-software mix, it faces a near-term future in which the most important apps on the iPhone are not made by Apple.

It’s pretty difficult to imagine that’s what Apple had in mind during the creation of the iPhone and App Store strategy: that the iPhone would eventually become a host piece of hardware for Google’s apps or Facebook’s social tools.

One of the things to watch for this year as Jony Ive takes over the Human Interface department and future versions of iOS is whether he is able to compete head-on with world-class mobile development teams — especially at its biggest rivals — and bring Apple’s ability to make the best core iPhone apps back into balance.

Thumbnail image credit: billaday via Compfight cc

26 Responses to “Why Apple needs to retake the core of the iPhone in 2013”

  1. Marcos Herasme

    I don’t see things that way. First it’s shows were the money is. The consistency of the iOS platform it’s what makes this very lucrative business, everybody wants to be in. Second, Apple should focus in making the best basic applications and leave to thirds the development of more sophisticated ones. And third, stability, a solid user base and a diverse eco system makes the iOS a boring but solid business.

    I feel that journalist don’t have news to report. With more than 120 billions in cash on the bank it’s difficult to doom Apple. They can buy anyone or everyone as they see fit, no one it’s immune to Apple. They have the scary luxury of been too much relevant in a variety of industries and no one have a say to theirs decisions, no journalist or the street.

    my two cents.

  2. Hey Jet the putting a graphic designer in charge of software design is like putting a MBA in charge of a tech company (i.e. HP). It does not work in the long run.

  3. Bob Forsberg

    If Ives concentrates less on a “thinness” design for products and more on their human operation he might compete. However making 27″ iMacs thinner by sacrificing functionality shows there is very little oversight on the over engineering Ives. Striving to make a hand held device easier to slip from your hands has no merit. Ives was great and kept in check under Jobs, but is out of control under Cook.

  4. coffeetime

    Apple should get into personal robotics (if it’s not already in their “Skunk Works” labs). Nearly everything required in the field of robotics – software and hardware, voice recognition and generation, optics, battery power, miniaturization – Apple is a master at. Why should Honda – maker of cars, motorcycles and yard equipment – be leading the pack with their ASIMO (Advanced Step in Innovative Mobility) project?

  5. H. Murchison

    It’s not Jony Ive that you should be watching. UI isn’t Apple’s foible here. It’s marrying their services to iOS is a superior fashion. If you doubt this… answer this “what has Apple invested more in lately, designer or Datacenters?”

    Eddie Cue is the guy, at this moment, who’s success is critical for Apple. The next big thing is frictionless security. Online you read geeks raging on about Skeumorphism yet you’ll never the average consumer speaking the same because they want simplicity, security and easy communication with family and friend. If you nail this you have success.

  6. SockRolid

    Re: “… it was reported late last year that Apple executives were “seething” over iOS users’ delirious response to the revamped and re-released Google Maps for iOS while Apple’s Maps app was widely mocked.”

    But not entirely because of how Maps affects iPhone and iPad profitability and/or third-party app profitability. It’s also because (despite all the crazy Apple television set rumors) one of the industries Apple is looking to disrupt soon is the automotive software industry, such as it is.

    Something like 90% of all cars sold in the U.S. have iPod connectivity as a standard feature. The next logical step will be to add a Siri interface for hands-free control of all automotive entertainment and information software. Honda, Toyota, GM, Chrysler, Mercedes-Benz, Audi, BMW, and Jaguar/Land Rover have all started implementing “Eyes Free” based on Siri. Ford recently showed a fully-embedded Siri interface at CES.

    And the negative publicity that Maps generated won’t help Apple one bit in the automotive space. Because mapping and real-time driving directions are a key automotive software feature. Oh well. Blame it on Scott.

    • Apple can and will out design Microsoft and Google in that area, the car makers won’t care about Geek Rage in their decision only actual money that can be made, and Google and Microsoft just don’t compare to Apple at this point not even close.

      • Shawn Smith

        @Danox its clear you don’t get. Majority of the market are geeks. Do you think more people use Apple Maps over Google Maps? Did you not see the 10’s of millions of iOS users that ran to download Google maps when it launched?

        Do you think the masses are so dumbed down that they appreciate pretty UI over something that works correctly?

        Why would car manufacturer’s use a product majority of the population isn’t using? How is that profitable?

  7. I think the changes Jony Ive’s team is going to bring to the software (and services) areas of the Apple ecosystem are going to be much more than skin deep. People tend not to fully understand the comprehensiveness of the process that goes into creating the hardware that Apple produces. What the typical user experiences is just the tip of the iceberg in terms of the creativity and effort that went into producing something as seemingly simple as an iPhone or iPad. Extensive analysis and experimentation with use case scenarios and designs starts in a total re-thinking of what is possible.

    The iOS software environment seems to have fallen behind the competition in part because it hasn’t done this level of deep conceptual re-design for some time. I don’t think Jony or his team would be able to live with themselves unless they tackle this issue is a really robust way. I’m hopeful at least.

    • Jon Ivie isn’t a programer, a great designer but not a programer, I’m sure his team can whip up a nice set of drawings showing a nice graphic of a UI for any Apple program, but that doesn’t include the actual butt work, the programing needed underneath to support that pretty picture, takes a hell of lot more time to put into effect.

      • @Danox – Apple put Ive IN CHARGE of the software development team. He does not have to understand all of the intricacies of programming. He just needs to set a much higher standard and sense of aesthetics for the groups under him.

  8. After tomorrow, you’ll be talking about Google’s imminent death. And a whole lot less worried about a company that’s going to report $60 Billion in revenues.

  9. Tony Barry Hercules Johnson

    You might be missing the point . I’m a android user and when using my phone I don’t see anything associated with apple. But if I where a iOS user I might find that some or all of my favorite are made by Google or Amazon which could get me to switch.

    • You had missed the point – the iPhone with all the great apps from its competitors will make the users stay instead of switch and may prompt the users of competing products to switch to the iPhone.

  10. Andy Brady

    I understand where the concern would be, I have managed a cell phone store for 6 years now, I’ve seen it all. Customers are coming in and mentioning they like the Google maps more than the apple maps and that has opened them up to ask “what about the Google phones”. I think apple will do fine, but they’ve never really been number one in sales so it’s not like this is something new. For the first time in years though I actually have customers coming in with an Iphone in hand asking “what else is there”

  11. Hari Seldon

    I don’t really buy the idea that Apple were seething over the Google maps app, by all accounts the iOS version is better that the equivalent Android app. A nice problem to have.

    • Spinedoc

      Apples maps app is better than googles app I all ways except the one that truly matters, actual mapping and navigation. Otherwise I think the ui and the way it integrates into the OS and lockscreen are much superior to googles, but I wasn’t impressed when one day apple maps told me to get out of my car and proceed on foot thru a field to get to my destination, ignoring the highway near me, just to name one out of several stories.

      • Apple maps turn by turn works very well, and it even works on a iPad, most Apple software works very well and over time gets better. The design departments of Google and Microsoft have always been subpar UI wise.

  12. tovarish

    I don’t get it. Apple’s core is making good hardware and a matching software platform on which the Googles and Facebooks can ride on.
    Apple will make money with the hardware and leave other companies that are better at making maps or social networks to make money on apples platform.

    • Agree to a large degree. Indeed Apple has been focusing (outwardly) on design and user-experience, and so little on social. Inwards (as some say), Apple has been building accessories to iTunes. But iTunes is merely a store, not a club/park/pub. It is a place to buy your stuff and get the hell out – rather than a place to hangout or meet people and find what you have in common. Nothing wrong about making cool gadgets and a great store, but there can be more to life, and Apple will learn, albeit with some difficulty. Meanwhile, others will learn from Apple – and make cuter gadgets and cooler stores. So Apple will not just need to learn social, but struggle to retain the turf advantage they now posses. Not easy at all, and doubly so without Steve.