[p2p-research] Greed kills: Why smartphone lock-in will fail and open source win

Fri Mar 12 08:18:04 CET 2010

Kevin, Sepp: could one of you cover this for our blog?

Michel

On Thu, Mar 11, 2010 at 3:12 PM, Kevin Carson <
free.market.anticapitalist at gmail.com> wrote:

>
>
>  Sent to you by Kevin Carson via Google Reader:
>
>
>  Greed kills: Why smartphone lock-in will fail and open source win<http://esr.ibiblio.org/?p=1781>
> via Armed and Dangerous <http://esr.ibiblio.org/> by esr on 3/4/10
>
> In a previous post, How smartphones will disrupt PCs<http://esr.ibiblio.org/?p=1759>,
> I explained how and why I think small, ultra-portable, general-purpose
> computers that we’ll think of and use as “smartphones” are going to displace
> the PC. I promised then to explain why the software of these devices will be
> open source.
>
> Go read Androids Will Challenge the iPad<http://www.technologyreview.com/computing/24672/?a=f>.
> It isn’t about smartphones, but the logic that will break the iPhone
> business model is clearly set out in it for anyone who’s paying attention.
> What we’re about to see in the smartphone and tablet markets is a repeat of
> the way the IBM PC shouldered aside the Apple II after 1980. Google’s
> deliberately slow-balled launch of Android via the G1 was just prelude; it’s
> with the Motorola Droid, the unlocked Nexus One and the generic Android
> tablets that the game begins in earnest.
>
> After 1981, IBM seized the lead in the personal computer market by
> exploiting two advantages over Apple. The first was marketing and sheer
> size: IBM’s brand had a lot of power, and IBM’s run rate allowed it to fund
> product development and reap economies of manufacturing scale on a scale
> Apple couldn’t match. Twenty-nine years later Google has at least as cool a
> brand as Apple, more financial mass, and more engineers. And that’s all I
> need or want to say about the biz-journalism end of things.
>
> IBM’s second advantage was openness. The PC was designed to be kit-bashed;
> it became the hardware platform that launched a thousand hardware startups
> and, effectively, the entire PC industry as we know it. The manuals included
> a BIOS listing, the bus specification was public; anyone could plug in, and
> did. IBM’s own attempt to close the platform a few years later, the PS/2,
> was a failure that sank almost without trace.
>
> Fast forward three decades. The commoditization of hardware that the PC
> pioneered has succeeded so completely that all smartphones are built by
> anonymous OEMs on the Pacific Rim and the real competition has shifted from
> hardware to software. Forget details like smartphone vs. tablet form factors
> and which handset manufacturer is the belle du jour: the real competition is
> the OS X ecology vs. the Linux/Android ecology.
>
> And isn’t it entertaining, boys and girls, how thoroughly Unix won? Both OS
> X and Android are Unix underneath. Windows Mobile is hemhorraging market
> share<http://arstechnica.com/microsoft/news/2009/08/windows-mobile-loses-27-of-smartphone-market-in-q2.ars>and even the most notoriously Microsoft-gullible elements in the technology
> press can see it’s a no-hoper.
>
> On its way down, Windows Mobile gives us an object lesson that allows us to
> predict how the OS X/Android war will end. It’s the same lesson that the
> Apple II vs. PC war taught, and it’s heightened by the way that Microsoft
> has (just barely) managed to hang onto a dominant position in desktops — by
> allowing lots of third-party developers to make money from that dominance.
> (Update: I wrote “just barely” because Microsoft has had to give away most
> of its profit margin to maintain share.)
>
> IBM won its battle for ubiquity over the Apple II because it was willing to
> give up control, to let third parties (including Microsoft and the
> peripheral-card industry) make most of the money and content itself with a
> tiny sliver of a rapidly expanding pie. Microsoft kept Windows viable on the
> PC desktop by yelling “developers, developers, developers!” and conceding
> third parties a huge share of *that* pie.
>
> And now? Google is willing to let handset makers, telecoms providers, and
> third-party developers capture most of the overt value of the Android
> market. Google can give all that prompt revenue away because everything it’s
> doing in this space is actually funded the same way its search-engine
> business is; by the volume of consumer attention Android devices will bring
> to its advertising. Apple, on the other hand, acts as a very controlling
> gatekeeper of its products — requiring (and *insisting*) that it’s going
> to capture most of the profit margin for itself.
>
> Apple’s problem now is the same as the Apple II’s problem in 1981: in
> markets reliant on a vigorous ecology of allies to add value to a product,
> *greed kills*. Gatekeepers lock out potential allies; walls limit the
> garden’s growth. Ask any strategic planner at a telecoms provider or handset
> maker why Windows Mobile failed and you’ll hear the same thing: they saw
> what happened to IBM and swore they’d never let Microsoft talk them into
> being its butt monkeys. Windows lost out to Linux in the medium and
> high-server market, because third-party developers are much less important
> there; customers tend to be writing their own bespoke software, so server
> Windows isn’t pinned in place by a huge collection of allies. There’s a
> harsh tradeoff between control and ubiquity; the original IBM PC and desktop
> Windows got on the right side of it, but Windows mobile got on the wrong
> one.
>
> The competitive dynamic between Linux/Android and OS X can be understood in
> the same way. OS X is playing a control game and Android a ubiquity one. We
> can expect the outcome to be the same: when the bazaar meets the walled
> garden, the walls will eventually come down, crushing the life out of the
> garden.
>
> This is why Symbian is now open-source in spite of having no inheritance
> from Unix-land; its backers have figured out that a control strategy
> collects short-term gains over a ubiquity strategy but simply cannot compete
> in the longer term against open-source Android and open-source Maemo. Apple
> will learn this, to its cost, too. Because Steve Ballmer may be an evil
> maniac, but when he yelled “developers, developers, developers!”, he was *
> right*. In the war for market-share, allies are better for your long-term
> prospects than walls, and ubiquity will always eventually triumph over
> control.
>
> UPDATE: I wish I had read Where Android beats the iPhone<http://www.infoworld.com/d/developer-world/where-android-beats-iphone-397>before I wrote this. It bolsters the argument pretty effectively.
>
> UPDATE: And here’s Gylnn Moody dispelling some anti-Android FUD<http://www.h-online.com/open/features/Of-Android-and-the-Fear-of-Fragmentation-945390.html>
> .
>
>
>
>  Things you can do from here:
>
>    - Subscribe to Armed and Dangerous<http://www.google.com/reader/view/feed%2Fhttp%3A%2F%2Fesr.ibiblio.org%2F%3Ffeed%3Drss2?source=email>using
>    *Google Reader*
>    - Get started using Google Reader<http://www.google.com/reader/?source=email>to easily keep up with
>    *all your favorite sites*
>
>
>
>
> _______________________________________________
> p2presearch mailing list
> p2presearch at listcultures.org
> http://listcultures.org/mailman/listinfo/p2presearch_listcultures.org
>
>

-- 
Work: http://en.wikipedia.org/wiki/Dhurakij_Pundit_University - Think thank:
http://www.asianforesightinstitute.org/index.php/eng/The-AFI

P2P Foundation: http://p2pfoundation.net  - http://blog.p2pfoundation.net

Connect: http://p2pfoundation.ning.com; Discuss:
http://listcultures.org/mailman/listinfo/p2presearch_listcultures.org

Updates: http://del.icio.us/mbauwens; http://friendfeed.com/mbauwens;
http://twitter.com/mbauwens; http://www.facebook.com/mbauwens
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://listcultures.org/pipermail/p2presearch_listcultures.org/attachments/20100312/ded5437a/attachment.html>