What I Wish Walt Mossberg Would Write

The headline gracing Walt Mossberg’s column in the Wednesday, March 13 edition of the Wall Street Journal sent me first to the back of the paper and the Personal Journal section. It reads, “How Apple Gets All the Good Apps,” and you can read it here. I enjoy Mossberg’s columns and believe he does his readers a valuable service by taking complex technology subjects and making them approachable. I aspire to do the same thing with this blog. I disagree, however, with the way he assesses mobile app ecosystems. Mossberg, like others, equates app quantity with ecosystem quality. That sort of world view results in favorable assessments of Apple’s iOS mobile operating system and Google’s Android, because both have more apps than any of their competitors.

I object to that approach for two reasons. First, it takes time to attract app developers. Apple didn’t give developers access to the iPhone right away, and when the App Store finally launched, it had only 500 apps. There’s a reason it evolved this way. After all, many developers are businesses, and those businesses need to be persuaded that they can achieve their objectives before they’ll consider investing development resources in a mobile platform. Some of these developers have a greater appetite for risk, leading them to build their apps earlier in a device’s lifecycle to try to get a bigger piece of a smaller pie. Others like to wait for the platform to mature, knowing the tradeoff: a platform’s success will result in many more apps against which to compete. Either way, it stands to reason that all-new devices and platforms with, by definition, a nascent installed base of users are going to feature fewer apps than a mature platform. What matters more than the quantity of apps is whether that device or platform has the most frequently used or most popular apps, and whether those apps are built well. If so, it suggests that the ecosystem is on the right track and will grow to address its users’ needs. I haven’t seen Mossberg nuance his evaluations in this way, which is something I wish he’d change.

Second, in no other retail environment do people gravitate to one store over another purely because it stocks more merchandise. Have you ever heard someone say, “Let’s go to Wal-Mart, not Macy’s. Wal-Mart has more stuff.”? That sort of thinking doesn’t occur to shoppers or retailers. People shop because it’s fun, they have a specific need, or they’re bored, for example. Retailers offer things they can sell more effectively than their competition and make money in the process. Mossberg could write about the app shopping experience, the way a store presents its merchandise, the selection within each category, the ease of acquisition, but generally speaking, he stops at the headline number of apps. He under-serves his readers as a result.

I had hopes that this column would address both my concerns, but it did not. The headline is a bit misleading, because the story discusses why Apple builds its own apps, such as iTunes and Facetime, just for the iPhone and iPad, while Google, Amazon and others build for their devices and others, including iPhones and iPads. It’s not a story about Angry Birds, Facebook, Twitter, or any other third-party application. Mossberg spends more time giving examples of first-party apps than explaining why these companies behave as they do. Perhaps that’s because the explanation is so straightforward.

Apple preserves its first-party apps for its devices, and Google publishes for many more than just its Android phones, because both these tactics serve each company’s principle business model.

Apple operates its core software offerings, especially iTunes, at low margins in order to enhance the profit margin of its hardware. In other words, Apple has reversed Gillette’s “razor/razor blade” business model, which saw Gillette and others give away the device at little to no profit in order to build up an installed base of users to which it could sell the blades at very high margins. Apple has succeeded spectacularly at this, but if it were to make iTunes available on Android phones and others, it would deprive itself of its most meaningful justification for convincing an operator or end consumer to buy an iPhone. It has to keep iTunes to itself, or else it would face enormous hardware price pressures.

Google, on the other hand, makes its money primarily off of its search engine. It wants to do everything possible to grow the audience for search consumers. Google, therefore, would happily see device prices come down, rewarding the lowest-cost manufacturers, as long as it resulted in more happy customers of Google’s apps, including search and maps. Google has a huge incentive to provide these products to iPhone users.

Mossberg’s column would have been better had it addressed these things, and someday, I hope to see a column from him that does.

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