Apple’s Reasons Behind No Flash: 75% Smartphone Marketshare

The recent hoopla over the iPhone is one of the more interesting developments in Apple's history. With Apple there has always been a tension between open and closed. Invariably, whether it is the tentative and then stopped experiment with clones, or Apple's approach to iTunes, Apple has erred on the side of closed.

As everyone now famously knows, this has cost Apple big in the past. The best example is Windows, which could have been Apple's game had Steve Jobs been more open, and allowed the cloning market to happen earlier on. Instead the personal and professional computer market is dominated by Microsoft Windows, which is essentially a clone of the Mac OS; we all use Windows, but Apple doesn't get the benefit.

In hindsight this could be viewed as an incredibly stupid move by Apple. Or, it could be viewed as the thing that makes Apple Apple; no compromise around product design. I owned a Power Computing machine and at the time, as a student, it was awesome to get a similarly speced Mac for a few hundred bucks less. But the thing was ugly in a PC-hardware kind of way, but this didn't really matter. However, it does now.

The Competitive Advantage Writ Large:

The difference today is that the integration of software and hardware is Apple's sole competitive advantage. It allows the company to create incredible products, like the iPhone that no one else can, except to look back at the iPhone and copy it. Android? A clone much like Windows was to the Mac. Windows Phone 7 (not sure what it is called, they keep changing it), with it's "pinch and zoom browser" and "marketplace"? A clone.

In order to keep pace with the market, and keep the 2-3 year advantage that Apple currently has with the iPhone, Apple has to keep innovating. This is made easier by Apple's in-house ability to design and implement on the hardware and software layer (Google does not make its phones, neither will Microsoft). However another very key differentiator has emerged—the incredibly explosive iPhone application ecosystem.

Like with the mp3 player market prior to the iPod, elements on the app market idea existed whether it was Microsoft's failed Window's mobile strategy or the various carrier's attempts to create lock-down stores. But the iPhone App ecosystem is on a whole new scale, with well over 100,000 applications. The innovation, iFart apps notwithstanding, is staggering. And the reason for this innovation? An open store architecture (albeit, ironically, within the closed confines of Apple) where anyone, from an individual developer to a large company can write and deploy an application.

This app store is, as much as the creativity Apple brings to the OS and hardware design of the iPhone and now iPad, intrinsic to Apple's success and it must do what it needs to protect it.

The threat, in this case, is developers who view the iPhone as just another device for which to deploy an application. They want one development environment, whether it is Adobe CS 5, or Unity, where they can use one code base, hit print, and have a bunch of Apps. This is great (in theory) for the developer, but not great for Apple, and ultimately not for the end users either.

Why? Because it creates vanilla applications. Vanilla apps run everywhere but do not take advantage of what is specific to the iPhone platform. The UI won't be iPhone specific. The code will not take advantage of new innovations in the iPhone OS, like the specific way it will handle multi-tasking with 4.0. If anyone can create cross-platform apps easily the reason to have and use an iPhone is diminished.

Ultimately, this isn't about Apple selling more Macs, it is about Apple dominating mobile. The mobile market will be a lot harder to dominate than the mp3 player market, but look at Apple's position in that market; the iPod makes up about 75% of portable digital music players.

I truly believe 75% marketshare is Apple's long-term goal with the iPhone. They want it to be the dominant mobile phone platform. And the only way to do this is to differentiate. This means no me-too crappy Flash applications in the app store. This means no vanilla apps that are copies that run on multiple platforms. If you are a developer and you want to have an application on the iPhone App store it has to be an iPhone App.

End of story.