Could the Sprint purchase of $20 billion worth of iPhones be the apogee of the mobile handset market? After pressing their nose to the iStore glass the folks in Kansas City finally gained admittance. It just might be the last hurrah for hardware.
Back in 2007 (was it really only four years ago?) Steve Jobs changed the wireless paradigm. For a quarter century the mobile network had been king. Handsets were simply carrier-controlled on-ramps to the network. The iPhone flipped that formula because it did so many cool things so easily. Suddenly it was a handset that stipulated which carrier to use.
For the first iPhone Apple offered “any app so long as we’re in control.” Walter Isaacson’s biography of Steve Jobs tells how Jobs quashed the idea of third party apps. The iPhone’s design functionality was his obsession. One of Apple’s board members, however, kept pushing to allow third parties to develop for the iPhone platform. Jobs finally relented.
When the iPhone 3G debuted in mid-2008 it was more than a functionally beautiful device – it was the portal to a world of possibilities created by people outside of Apple. It also kept Apple out front as the leader. As everyone rushed to emulate the iPhone’s design the touch screen and app-friendly browser became commoditized.
Jobs had already had his epiphany, however. The perfect piece of hardware was simply a gateway. The day before the iPhone 3G launch Apple opened the App Store. The new device then came to market with an economic model that allowed Apple to make money off the third-party apps it was facilitating. Apple reduced it’s net on each iPhone by 20 percent (over $160) but replaced it with a 30 percent off-the-top fee on the revenue generated by apps developers. Thus far 18 billion downloads to the iPhone have generated almost $1 billion in fees to Apple. And the beauty is those fees just keep coming long after the device has been purchased.
We’ve been to this rodeo before. No one should be surprised that as mobile handsets become mobile computers they will become as commoditized as PCs. Just ask Michael Dell. At the same time the apps store’s walled garden days are also numbered. Just ask wireless operators how easy it is to maintain a wall between consumers and the Internet.
Perversely, it is the proliferation of smart devices that will bring about the demise of the app store. CTIA now reports there are more wireless subscriptions than people in the U.S. If consumers own more than one smart device their information needs to follow them seamlessly across all devices, not be locked up in an app.
Information rules, not the device and not the network. Faster networks and more powerful mobile devices only expedite the revolution away from the lock-up of apps and app stores to the free flow of an individual’s information across all his/her devices.
Jeff Bezos gets it. “We don’t think of the Kindle Fire as a tablet,” he explained. “We think of it as a service.” That service is information access. Amazon.com delivers information formerly known as a “book” to multiple devices that are anywhere because they are wireless.
The information in a book used to have a pesky requirement for paper and binding. Johann Gutenberg mechanized the production and distribution of this information in 1450. It drove revolutions as diverse as the Reformation, the Renaissance, and scientific inquiry. It wasn’t the physical book that was important, however, it was the information in its printed container. The “app” of knowledge drove the printed medium and changed the world.
Jeff Bezos has broken the 560 year-old Gutenberg tradition that a book is a container of ink on paper – and he’s delivering it to whatever digital container the user finds convenient. The device doesn’t dictate. The information is in control.
The fabric that connects information across multiple devices has been dubbed “the cloud.” It is the logical extension of the revolution that wireless connectivity began. Wireless untethered individuals from their connections. Now wireless access from smart devices is untethering users from hardware-defines uses.
“There’s an app for that” is being replaced by, “I don’t need an app, my data follows me everywhere.”