How Apple “lost” the platform war

I don’t know if many people have noticed, but when someone writes about Apple and it’s position or future in the mobile market, concerning the so-called “iOS vs Android” platform war, almost every time a very slippery analogy with the 90′s comes up, when Apple “lost the platform war” to Microsoft and many random PC manufacturers. Furthermore, that situation is being used as an example of “open” platforms beating “closed” ones. But, as it often happens, people don’t really know what they are talking about as this analogy is flawed to begin with.

To understand why this analogy is flawed and what really happened, we need to remember Apple in the 90′s. With Jobs out of the company due to failure in a power struggle, Apple was led by John Sculley. Although Sculley may had some vision of Apple’s future, one couldn’t say that vision was correct. Despite having some successful products and overall achievements, Sculley’s style of management has eventually led to internal fragmentation of the company, which divided Apple into inefficient, feuding fiefs.

During this time many potentially promising projects were canned by the executives of different division, since they saw them as a threat to their division. At the same time Apple spent enormous amount of money, human resources and time on various questionable projects like TV appliances, CD audio players, digital cameras, game consoles and even speakers, non of which obviously took off. There were even crazy projects, such as Apple making it’s own CPU’s (Project Aquarius), which clearly wasn’t a job for Apple of those days — the company even purchased a Cray supercomputer for the project. Despite being super-innovative, Newton, one of the most famous failed (market failure) Apple projects, had cost the company billions of dollars, before being killed by Jobs upon his return to Apple.

Apple was essentially trying to do everything they could imagine, not really knowing what they are doing, while their core business, i.e. hardware and software, was left on their own. The result was quite predictable and eventually Apple faced the consequences. Trying to to expand Macintosh market penetration (or rather generate a new quick revenue stream for Apple during a time of financial crisis), the management launched a mac clone program so that other manufacturers could build and sell computers that ran Apple’s system software. The mac clone program was a disaster and was also killed by Jobs after his return to Apple.

This kind of management eventually almost killed the company, so people like Gil Amelio and Steve Jobs had to come in and slash away all those excess projects, concentrating on resolving the problems that Apple has pilled up for years. After resolving the immediate problems and making a new product roadmap, Apple made an extremely successful expansion into new markets, such as mp3 players, smartphones and tablets, most of the times re-inventing the that market. While at that, Apple has also built up it’s own retail empire and became the largest tech company in the world, surpassing Microsoft and Intel not only in market capitalization, but it profits. Further more, Apple now is one of the largest computer manufacturers in the world (or the largest, depending on how you count) and by far the most profitable. What’s important, that all of this was done not in any way by becoming more open — one can even say that Apple became even more closed. All the

So, if you look at Apple’s history, it would be wiser to say that Apple didn’t lose the platform war — the management never really fought for anything, slowly killing the company. Nor did the Apple’s “closed” platform lose to the “open” platform from Microsoft — how could Apple’s platform even possibly “win”, when the company it self was failing on the market fast? But now it’s is Apple’s “closed” platforms that are putting up a serious fight to the competitors.

Thoughts on tech