Services like Spotify and Instagram obliterate the need for the eco-system that Apple has used to sell its hardware.
The iPhone’s dominance could be under considerable threat in 2013. Yet Apple’s control of the market has certainly not diminished the insatiable determination of Samsung, and the iPad maker may find itself in a situation where the market has moved on technologically.
Since the launch of the iPhone, to set it apart from the pack, Apple has leveraged the concept of the ‘eco-system’ — where a user needs to sync their iPhone regularly to keep the images, music and content current and up-to-date between their mobile device and their desktop. The rug has been pulled out from under Apple’s feet however, by the cloud. People’s digital behavior has rapidly changed and so has their attitude towards digital content. Think about it iPhone users: when was the last time you ‘synced’ your phone to your computer — not just charged it?
The adoption of streaming music services like Spotify indicate that people are rapidly losing interest in the idea of music ownership. The opportunity to listen to any song at any time means that we’ve become unconstrained by content — the idea that we should own music has fast become a quaint notion.
When I spoke to an NYC financial analyst a few weeks back, he agreed, “When I look at the music I ‘own,’ I realize what a bad record collection I have–everyone has. Cloud services allow us to enjoy music again.” On a party bus a few days later organized by the Downtown Project to visit the Las Vegas First Friday event, the woman who was organizing the music asked if someone had a phone with YouTube on it — and then when she was handed one. She searched the video site to play audio tunes on the ride. She didn’t care if the phone had MP3s — it just needed to be able to access the mobile web.
In addition, Apple’s eco-system is no longer necessary for the uploading and logging of digital images. The iPhone has surely driven a democratic revolution in photography — but we don’t store images like we used to (3 or 4 years ago). Instead, we save our photography and videos by sending them to Facebook or to Instagram. Those places are our new folders, and they offer far better records of our life. There’s also a feeling of access — that at least you can download the images at a later stage — rather than have them get lost on the hard drive of an old computer, or your previous iPhone.
The idea that Apple’s strength is the eco-system has been around for a while — only two months ago, PC Magazine was explaining to its readers that buying an iPhone wasn’t just buying a piece of hardware, it was buying into an ecosystem. And that this “is where the other major mobile players fall behind Apple.” PC Magazine is wrong. Apple has lost its competitive advantage as it clings on to the idea that people want ownership of their content. Sure, Apple has the iCloud system, but I’d argue that people see this as more of a back-up device — not a cloud service. To add to this, Steve Job’s other great invention–the iTunes store, has probably had its day also.
Using its relentless roll out of new mobile products, Samsung is no longer nipping at Apple’s heels but is firmly on the Cupertino company’s back. In 2013, Samsung should get an upper hand in the marker: people don’t need an iPhone 5 that syncs content — they just need a phone that takes great photos for Instagram or streams great Spotify tunes — and has a map app that works!
The last piece of significant innovation Apple has produced was the iPad. The management in Cupertino have lied to us — and maybe themselves, that later developments (the smaller iPad or the longer iPhone) represent real innovation. They do not. Apple seems to be pursuing a Sony Electronics strategy of making the same product thinner, faster and shinier. I don’t think that’s what consumers are really asking for anymore. Sony used to be considered an unstoppable powerhouse in the electronics industry, and now it’s an also-ran. What happened to Sony? In the TV market and others, Samsung came to tea and ate all their sandwiches. Will the Korean electronics firm drink all of Apple’s beer too?