Steve Cheney started guest posting on TechCrunch. In one of his posts, he states that Apple’s strategy of vertical integration is ingenious:
Perhaps the best example of this so far is FaceTime, Apple’s take on video-calling. FaceTime makes video-calling on the Android-based Sprint HTC EVO look silly, because the EVO awkwardly requires users to sign up and download a third-party app, then launch it every time they want to talk. Normal people simply won’t do this.
Apple eliminated this friction by innovating at the confluence of hardware and software-hit one button mid-call and the feature just works. It really is amazing (yes, I am channeling Steve Jobs).
I think that Steve here is a bit wrong. The reason that FaceTime is so good (that is yet to be seen IMHO) is simply because they are the first to offer such a unique service from a handset vendor which doesn’t rely on the service provider himself. The issue of a single button, friction or hardware/software integration is irrelevant – it can be done by others as it has been done in the past for most 3G phones out there.
Moving the solution to IP? Possible.
Increasing resolutions and frame rates? Easy with today’s mobile CPUs.
Having a button for it? Trivial.
The whole premise of vertical integration is nice. People say that this is what gives Apple an edge over all of its competitors – the fact that it controls both the hardware and the software.
But there’s one thing that is being overlooked – and that is the fact that a rich and competitive ecosystem allows for fast improvements and optimizations that cannot be reached by a single company – just read Steve’s other post on TechCrunch on mobile innovation:
System integration is the term for how hardware and software combine to create a finished platform. In PCs, Intel dictates the pace of hardware releases- OEMs essentially wait for CPU updates, then differentiate through inventory control, channel / distribution and branding. Intel and Microsoft win no matter which PC makers excel – they literally don’t care if it’s Asus, Dell or HP.
In the smartphone world, it’s the opposite. Dozens of component vendors fight each other to the death to win designs at smartphone OEMs. This competitive dynamic forms an entirely different basis for how component vendors approach system integration and support.
Competition brings innovation, and the more companies out there competing on the chip level, the harder it will be for Apple to stay ahead of the game with their own chip.
Need any proof?
Last month I attended Android Developers IL meetup, where Qualcomm’s team came and explain their stance and efforts on Android. What was said is that a lot of work was done to optimize the performance of Android for Qualcomm’s Snapdragon chipset – optimization which can mostly benefit other chipset vendors as well.
The end result was apparent just last week, when ars technical started benchmarking Android 2.2 against iOS 4:
When multiple vendors are collaborating to bring an innovative solution – everybody wins. You have hundreds of companies working on Android, tinkering with its innards, running it on multiple chipsets. Apple won’t be able to keep up unless it continues to innovate like crazy and on multiple fronts – mobile handsets, tables, TVs and other areas. It will lose focus which the Android ecosystem doesn’t really need.
Vertical integration is great, but when an elephant like Google is sweeping the industry with an Android OS backed by a huge and growing ecosystem, it isn’t going to be enough.