The People's Republic of Apple
Apple, Google, and Microsoft are the three most important technology companies in the world and they now mirror the world's three most important economies. Apple is China, booming but autocratic. Microsoft is Europe, wealthy, stagnant, and declining. Google is the USA, an immature but powerful force for freedom prone to arrogance and to fighting too many wars at once.
The People's Republic of Apple
Communist China is arguably the most economically successful government in history, but their success came at the cost of severe limits on the lives of everyday citizens. Chairman Steve understands this formula completely. Anyone who studies the 20th century 200 years from now will learn about two things: the rise of China and Steve Jobs, the defining business leader of the modern era.
Like the Chinese Communist Party, Jobs is all about control. He is considered autocratic even by those who respect his genius for reshaping markets with brilliant gadgets. He has always insisted on controlling every aspect of his customer's experience and on determining how customers will and won't use his technology.
Shareholders and directors put up with it because they have little choice and because, like China, Apple delivers. Apple has a very small board that is selected and dominated by Jobs in a manner that would make a Chinese apparatchik proud. Apple gets away with it because they have gone from the least successful of the three companies to the most successful. In 2000, Microsoft was the most valuable company in the US, with a market cap of about $600 billion. Apple ranked #332 with a $16 billion market cap. Today, Apple is worth $210 billion and Microsoft $260 billion. Google is worth $178 billion. That kind of performance buys a lot of forgiveness from shareholders and appears to buy forgiveness from regulators as well. In no other American public company could the CEO step down for a liver transplant due a very serious medical condition and simply announce a "temporary medical leave" with no details.
The forthcoming iPad will continue the tradition set by Macs, iPods, and iPhones.
- It starts with developers. The Apple software development kit requires that developers agree to not disclose its terms. It requires that any software built using the SDK be sold only through iTunes -- even if Apple rejects the product!
- The iPad will run only on hardware provided by Apple hardware. Apple has foolishly passed up a chance to kill Android by licensing the iPad OS to other hardware makers. It is built on a chip made by Apple (which they also won't license) and sold in stores run by Apple (also in Best Buy, a plus).
- The iPad runs only apps approved by Apple (imagine Microsoft announcing that no Windows application could run without its approval). When Google built a breakthrough iPhone application (Google Talk), Apple simply disallowed it. Google has built a strong Gmail site for the iPad, but is unlikely to ever get a native app approved. Opera is about to submit a faster iPhone browser (the Mini) shortly and most people expect Apple to refuse to allow it to compete with Safari. Moreover, if Apple approves an application and later changes its mind, they simply remove it (as they did with dozens of adolescent T&A apps recently).
- The iPad will not run Flash because The Great Helmsman has deemed it unworthy and prefers HTML5. 99% of sites that support motion use Flash? Tough -- on the iPad, you get a broken screen. Why? Well, there are issues with Flash (but none so big that Android hasn't figured out how to work with them). There are even bigger issues with Jobs.
The message of the "I'm a Mac" TV ads says it all: Apple and Steve are too-cool-for-school and Microsoft (soon Google) are a bunch of portly losers in frumpy clothes who can't get a date.
How ridiculous is this? Today Business Week disclosed that developers who wanted a sample iPad to work with were forced to sign gag orders and to keep their iPads chained and locked in darkened rooms with the windows blacked out until the April 3 launch. There is secrecy, there is paranoia, and somewhere out past the far end of weird, there is Apple. At its height, had Microsoft even dreamed of such power, the world would have screamed.
Why do we put up with this crap? Because Apple technology is hella cool, of course. I can't wait for my iPad. Sure Apple's autocratic, vertically integrated approach to business should have gotten it kicked out of Silicon Valley a long time ago -- but nothing succeeds around here like cool gadgets that sell like crazy and transform entire industries.
Microsoft = Belgium
Unlike China, Europe is about security and stability, not control and growth. Taxes are high and technology innovation is low. Microsoft has gone European and looks more micro and more soft with each passing week. Hard to believe that only a year ago, Microsoft was still so feared that Apple and Google maintained an alliance to defeat it. Now, Microsoft looks like a large, quiescent beast that lives politely off of its legacy. Nobody is afraid of Microsoft -- they are the Belgium of software.
Microsoft, like the EU, is no weakling. It is a strong company with excellent technology that most people on most computers rely on every day. But the company is living on an installed base that is beginning to crumble as both system and desktop application software matter less and less. Like Europe, Microsoft leaves the new stuff to others. First they missed paid search. In sprinting to catch up, they missed smart phones. In sprinting to catch up, they look to miss tablets. They have defended their OS and desktop software so steadfastly that they missed apps and cloud-based software. Like Europe, Microsoft will be around for a long time -- but it is a place where deaths exceed births, so decline is inevitable.
Google: Which Witch?
America is the much younger than either Europe or China and glorifies competition and innovation not for what it achieves, but as ends in themselves. At its best, the US is stunningly innovative and courageous, a beacon of freedom for others. At worst, the US takes on too many fights at once and is insensitive to how the world sees it. America is the planet's wild card -- both Lincoln's "last, best hope of earth" and the Wizard of Oz, hoping desperately that Toto won't pull back the curtain.
That's Google -- idealistic, naive, brilliant, clumsy, and above all, astonished that major parts of the world fear and loathe it.
Google enables millions of websites to monetize traffic and they enable millions of businesses to enjoy free, high quality web applications. ChromeOS is a breathtaking reconception of personal computing that Google plans to release into the wild, thus creating thousands of competitors for Microsoft and Apple. They have already done this with Android, which has created hundreds of competitors for the iPhone and iPad. Some of these are quite serious (check this i-Pad rival, a German Android tablet available now). Further, Google has taken a smart, highly principled position on Chinese censorship, unmatched by its rivals or by any other western corporation.
But, like America, Google is prone to serious overreach. What other company cannot even count the number of products it offers? Google is fighting simultaneous, serious wars with the FTC over a major acquisition (AdMob), with the government of China over censorship, and with Apple over smart phones, patents, tablets, and a whole lot more. Google has made more enemies more quickly than either Apple or Microsoft -- and that is not a record to envy.
Google makes enemies easily. It pissed off handset makers when it brought out Nexus One, which is looking increasingly like a huge flop. Google competes in dozens of vertical markets in dozens of countries. If you are a media business, an advertising business, or any kind of information-based business, Google terrifies you, despite their white dresses and high pitched voices insisting that they are not evil.
The company is voracious -- they hire hundreds of smart people every day and acquire a new technology businesses every few weeks. In the last six months, they bought video compression company On2, reCAPTCHA, the clever security guys, AdMob, a mobile advertising leader, Gizmo5, a VOIP company and potential Skype competitor, Teracent a display ad business, AppJet, a real-time online collaborative editor, Aardvark, which does social search, reMail, a killer email app for the iPhone (now removed. Look for it in Gmail for Android)), Picnik, the best online photo editor (founded by a guy who already sold Google his first company), and DocVerse, which enables MS Office file sharing. That's their shopping list in the middle of a recession -- and I probably missed a couple. There is a fine line between competitive and predatory, as the video below makes clear.
Over the long term, Google may turn out to be a force for good -- but it is more likely to remain so if it has strong competitors. Fortunately, competition is something that all three companies have in abundance. Let's keep it that way.
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