A Tale of Two Fruits
- Thursday, January 29th, 2015
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It’s been another good week for Apple. Not that it particularly needs another one, given the way it’s come to dominate the mobile landscape over the past eight years. Nevertheless, a couple of days ago, the company did what everyone expected and posted another stonking set of results for Q1 2015, including revenues of $74.6bn (£49bn) and net profits of $18bn, the largest quarterly net profit figure ever posted by a public company.
The figures came off the back of astonishing sales figures for the iPhone range. Boosted by the arrival of the 6 and 6 Plus, Apple sold 74m iPhones during the quarter, which as CEO Tim Cook pointed out, equated to 34,000 iPhones every hour, 24 hours a day, every day of the quarter. Even he was forced to concede candidly, humbly, look at it how you will: “This volume is hard to comprehend.”
Even so, it wasn’t all good news for Apple. Faced with increased competition in the tablet market, iPad sales fell by 18 per cent, to 21.4m units. Even the release of the Air 2 and Mini 3 models last October could not halt the decline. Yet while I don’t recall Cook dwelling on Apple’s problems in the tablet market, I don’t remember him whingeing about them or blaming anyone else for them either.
And then we have BlackBerry. BlackBerry, which once strode like a colossus over the enterprise mobile market and which also, for a time, somehow, managed to become the handset of choice for the world’s youth. Actually, there’s no mystery about it. Blackberry had the BBM Instant Messaging service going for it, and not much else. Without it, as business users abandoned the OS in their droves, the company’s decline would have been much more rapid. And with the arrival of WhatsApp, Snapchat, Line et al, it was only a matter of time before BBM’s USP lost its ‘U’.
The story behind BlackBerry’s demise has been well documented, but for anyone who needs a recap, the short version is that it refused to believe that consumers might want a phone without a physical keyboard, leaving Apple and the Android handset makers – Samsung in particular – to clean up. When it did finally, grudgingly, acknowledge the appeal of the touchscreen and begin releasing its own touchscreen-only and touchscreen/physical keyboard hybrid devices, they were dogs, and very few people really cared.
In the meantime, business users realised that BlackBerry was not the only fruit and began switching to iPhones and Android devices. All of which led to a situation where, according to the analysts, IDC and Gartner, BlackBerry’s share of the smartphone market slipped from 20.1 per cent in Q1 2009 to just 0.5 per cent in Q3 2014. By that point, Android was on 84.4 per cent, iOS on 11.7 per cent, and Windows Phone on 2.9 per cent.
All of which seems to have left the company feeling a little sorry for itself and, it would appear, somewhat desperate. For just a few days before Apple reported those results, BlackBerry CEO John Chen was busy writing to the US Chairman of the Senate Committee on Commerce, Science and Transportation calling for “content/app neutrality” across mobile platforms. In other words, when someone develops an app, can you please pass legislation that mandates the developer to make the app available across all mobile operating systems, even those with a less than one per cent market share.
Chen is right to be concerned. As of September 2014, Pure Oxygen Labs estimated there were just 150,000 apps in BlackBerry World app store compared to 300,000 apps for Windows phone, 1.3m for iOS, and 1.4m for Android devices. Even so, his app neutrality appeal smacks of desperation.
Chen compared app availability with net neutrality – the idea that all types of content over the web should be equally available to all web users without any differential charging based on the user, type of content, infrastructure or platform provider, or anything else. He used his letter as the basis of a blog post, one paragraph of which sums up his beef:
“BlackBerry believes policymakers should focus on more than just the carriers, who play only one role in the overall broadband internet ecosystem. The carriers are like the railways of the last century, building the tracks to carry traffic to all points throughout the country. But the railway cars travelling on those tracks are, in today’s internet world, controlled not by the carriers but by content and applications providers. Therefore, if we are truly to have an open internet, policymakers should demand openness not just at the traffic/transport layer, but also at the content/applications layer of the ecosystem. Banning carriers from discriminating but allowing content and applications providers to continue doing so will solve nothing.”
What Chen is saying is that the same principle should apply to apps. So if someone releases a killer app game for iOS and Android, but not for BlackBerry (which, let’s face it, is what tends to happen), people who use BlackBerry phones are being unfairly discriminated against by being unable to access the game on their phone.
If you ignore the obvious flaw in Chen’s argument, that most people you see with a BlackBerry – that I see, anyway – tend to have a second phone, usually a smartphone, for personal use, things like playing the latest blockbuster game that’s not available for BlackBerry, it’s still fatally flawed. If the Xbox suddenly starts knocking the PlayStation into a cocked hat and game developers stop developing for the PlayStation, will Chen be arguing that PlayStation owners are being unfairly discriminated against?
When an app developer builds an app for one platform, it costs them. When he or she decides to make the app available for another platform, it costs them some more. Only yesterday, I interviewed somebody at Mothercare who told me that after the iPhone version of the Mothercare app was well received, it took nine months to develop the Android version, due to Mothercare’s wish to develop to Android principles, and the fragmentation of the Android ecosystem, which meant that bug-finding and fixing took much longer.
Brands are prepared to do this if the second or third OS they are developing for will give them significant increased reach. Just as the developers of any app or game are prepared to do it if they think the additional platform will put their product in front of enough users who will either buy the app or click on ads within the app to justify the investment. In simple terms, they’ll do it if they think they will make more money from doing it than the cost of doing it. They won’t do it if they think the cost of doing it will amount to more than the amount of money they will make from doing it. It’s hardly rocket science.
But when you’re talking about an OS with a market share of 0.5 per cent, you’re not going to find many app developers willing to develop for it. And whose fault is it that BlackBerry’s market share has slipped to this level from that 20.1 per cent figure six years ago? Not the app developer community, surely, but the senior executives who mis-managed BlackBerry (RIM as was) from its position of strength, to where it finds itself today.
App developers go where the eyeballs are, which is why down the years, the companies behind the different mobile Operating Systems have been so keen on running app developer competitions with large cash prizes to encourage developers to develop for their platform.
Another section of Chen’s blog post lays it bare:
“Apple does not allow BlackBerry or Android users to download Apple’s iMessage messaging service. Netflix, which has forcefully advocated for carrier neutrality, has discriminated against BlackBerry customers by refusing to make its streaming movie service available to them. Many other applications providers similarly offer service only to iPhone and Android users.”
You can almost hear the plaintive cry in that last sentence: “It’s not fair – what have iPhone and Android got that BlackBerry hasn’t?”
Answer: users, lots of them. If BlackBerry really wants to see more apps developed and released for its OS, it should start by making the OS, and the hardware, more appealing to consumers. The more people that own a BlackBerry, the more compelling the argument becomes to develop for it. I fear, however, it may be too late for that, which might explain why the company is clutching at the app neutrality straw to try get out of the hole in which it currently finds itself.