Apple Wants to Move Past Hardware But Isn’t Ready to Commit
Apple built its success on devices. Devices are what it does, and what it’s done forever. Everything the company makes is expensive, immaculately designed, and completely finished inside and out. That is by design. You don’t buy an Apple product to tinker with it, you use it until Apple releases something better. This strategy has made Apple the most valuable company in the world.
But even Apple must change, a point CEO Tim Cook made during the Worldwide Developers Conference this week. Apple increasingly realizes that it can’t limit itself to selling gadgets. Even the all-conquering iPhone is expected to see decreasing sales. Yet the company has fallen behind Amazon, Google, and Facebook in creating digital services people want.
Apple products provide a platform for everything those rivals make, but Apple does not control or directly profit them. That places the company in a conundrum: It must move beyond devices while keeping people within its ecosystem. And so it announced at WWDC that it is opening that ecosystem just a bit and inviting developers in to build upon it. It isn’t making iOS open like Android is open. But then, it can’t. Apple’s just not built that way.
Apple’s Balancing Act
One of the biggest announcements from WWDC was word that Apple will let developers build services for Maps, Messages, and other apps. The idea is to create cool things that let you, say, make an OpenTable reservation in Maps or add stickers and GIFs to iMessages. These are hardly radical ideas, but they’re what passes for revolutionary if you’re Apple.
But the bigger news may be that Apple is opening Siri, its maligned voice-activated assistant. Apple’s developer manual for the Siri API suggests all kinds of third-party apps powered by voice, from making calls and sending messages to making payments, searching photos, and hailing rides.
Apple had to do this. Voice, text, and maps are the most basic interactions on mobile devices. Barring developers from them placed Apple at risk of falling behind Android, says Andy Hargreaves, an analyst at KeyBanc Capital Markets, and seeing third-party tools like Facebook Messenger and Google Maps overtake its own apps. But Apple isn’t making iOS a truly open platform, and it won’t go open source or device agnostic in the way Android is.
“It’s still a walled garden,” Hargreaves says. “Apple is just letting developers use more of the tools inside the walls.”
It’s the same theme with Siri. Although it will work on Macs and Apple TV and with other apps, Apple is keeping Siri to itself in areas like music, a market it hopes to own with Apple Music. Opening the door to Siri just a bit lets Apple compete with voice-driven digital assistants like Amazon’s Alexa. But Apple has more work to do if it is to convince anyone that it’s more than a glorified app launcher.
Keeping Devs Happy
Apple has made other moves that suggest it’s looking at a future beyond devices. The iPhone didn’t go stratospheric until the App Store opened, creating a universe of apps that made a smartphone indispensable. To keep those apps coming, Apple is incentivizing developers in new ways.
It opened the subscription model behind a service like Spotify to every category in the App Store. And if a user maintains a subscription for years, Apple will reduce from 30 to 15 percent the cut it takes. These changes give developers more ways of making money beyond simply selling an app—which is becoming less and less lucrative.
Here too, Apple had to do this. If it doesn’t keep developers happy, they can simply move on to the less restrictive Google Play Store or find ways of making their services compatible with Amazon’s Alexa. And so Apple is making the App Store a bit more open. It’s reportedly streamlining the review process to get new apps into the store in as little as two days. It reportedly also is allowing developers to buy ads in the App Store via auction.
Ultimately, though, Apple remains very much in control. The company may be looking toward a post-hardware future. But for now, it will still love for you to buy another iPhone.
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