Friday, June 10, 2011

Rallying the Base

This week was WWDC 2011. Last year I was lucky enough to attend what appears to be the final stevenote. This year I followed along online, like much of Silicon Valley. There are a lot of reasons why so many of us who work in the tech world pay such close attention to the WWDC keynote. This is the place where Apple typically unveils innovative hardware and software. However, this year's event reminded me of another  watershed moment in recent US history: John McCain choosing Sarah Palin as his VP candidate back in 2008.

Rallying the Base

These two events were similar because they were both examples of rallying the base. In 2008, McCain decided against trying to appeal to moderate Republican/Democrats/independents who were either inclined to vote for Obama or undecided. Instead he went with Palin, a candidate who did not appeal to those people. The idea was to appeal to the most conservative elements of the Republican party and get those people to vote instead of staying home for whatever reason. Obviously this did not work.

So how was WWDC 2011 a rallying of the base tactic? Apple did not try to introduce near software or hardware that would get non-iPhone owners to go out and buy an iPhone or more strongly consider buying an iPhone the next time they were in the market for a new phone. Instead they did their best to make sure that current iPhone owners continued to buy iPhones. The strategy was two-fold.

First, they needed the places where they were weak and other were strong. Now let's be honest here, by others we are talking about Android/Google. There were a couple of glaring problems with iOS 4. First was notifications, so Apple essentially adopted Android's model here. Second was the dependency on iTunes the desktop software application. They introduced wireless sync and their iCloud initiatives to address this weakness. Apple did not break any new ground in any of these areas, they simply removed some obvious reasons for people to buy an Android device over an iPhone.

Phase two of rallying the base was to increase lock-in. If you are an iPhone user, you already experience lock-in. Buying an Android phone means losing all of your apps and games. Depending on what you use for email, calendar, etc. you might also lose that data too. Of course this is true to some degree about any smartphone platform. However, with the expansion of the Android Market (I've seen many projections that it will be bigger than the App Store soon), pretty much every app or game you have on your iPhone can be found on Android. Further, there's a good chance that it will be free on Android, even if you had to pay for it on the iPhone. Further, with the popularity of web based email, especially GMail, you probably would not lose any emails, calendar events, etc. So the lock-in was not as high as Apple needed it to be. Enter iCloud and iMessaging.

As many have noted, iCloud/iMessaging does not offer anything that you could not get from 3rd party software. Syncing your docs, photos, email, calendar, etc. is something that many of us already do, and that includes iPhone users. Further many folks already have IM clients that do everything that iMessaging does. The big difference is that all of those existing solutions are not tied to iOS or OSX. Thus they are cross-platform (no lock-in) but that also means that you have to add this software to your devices. It's very nice for users to not have to worry about installing Dropbox, Evernote, or eBuddy. But the obvious win for Apple is here is the lock-in. If you start relying on Pages for writing docs and sync'ing them across devices, you are going to be very reluctant to buy anything other than an iPhone (and a Mac for that matter.) If you get used to using iMessaging to chat with your other iPhone toting friends, same thing.

Apple is keeping the cost of using all of their new offerings very low. It's a classic loss leader strategy. It's ok if iCloud and iMessaging both lose a lot of money for Apple. If they can just lock-in existing iPhone users, they can continue to make huge profits. In that scenario, it's ok for Google/Android to have N times the number of users as Apple. The Apple users won't be going anywhere, and they spend a lot of money. Seems like a smart strategy by Apple. It should work out much better than it did for the Republican party in 2008.


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