Monday, March 23, 2009

Apple's iPhone Moat

This article argues that Apple is working to broaden the moat around iPhone and to ensure continuation of the rich profits deriving from that platform (the platform including all the iPhones, and also the iPod Touch, which runs the same applications and games but which doesn't make calls). The article has it right: Having taken the lead in (the unsurprisingly connected) mobile development environment and mobile application sales, Apple is working to advance its gains.

Acquisitions that enhance Apple's ability to deliver mobile tech should be paying dividends in the form of improved hardware (and perhaps software compilers), which Apple's developing platform will leverage better than rivals. Rivals aren't apparently prepared to re-allocate on the fly computation instructions from a general computing processor to a graphics-specialized processor or some other onboard coprocessor (DSP?) that might allow Apple's product to achieve user-friendly performance in the face of developing demand (either on lower-powered hardware than competitors, or under greater demand loads than competitors. The ability of Cocoa to offer this to developers, without developers needing to know low-level information about the presence or capabilities of any of the processors that will be present in a particular user's configuration, makes Apple's platform particularly attractive to developers -- they will be safe from future platform hardware development even as Apple is free to migrate hardware in the direction dictated by performance and price.

Apple's developing freedom in hardware will offer a lasting advantage over rivals whose software is tweaked for specific hardware and whose applications cannot run without the specific computation instructions supported by the particular hardware for which the application was written. Rivals will have terrible migration pains as platforms attain obsolescence (or will suffer in bake-offs as rival hardware becomes distinctly superior), whereas Apple will be largely able to sail smoothly -- with its developers' applications intact -- into whatever hardware makes the best business case for release.

Although this is hypothetically a performance advantage, it opens choices that ensure a profit advantage. If Apple doesn't get a handle on security, it'll need it!

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