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The writing is clearly on the wall. The iPhone will grow into a significant enterprise end-point role, and OS X Macs will quickly advance beyond the now 20 percent share (estimated) of the total non-enterprise fat client compute device market.
Problem
is that Apple (AAPL) is winning in the old war -- the PC vs the Mac, and the
smartphone vs. the mobile Internet device [MID] battles. The larger,
more long-term opportunity has moved upward and outward into the realm
of the services cloud.
Becoming the funnel through which to acquire, access and pay for the
cloud-spewing services is the new war. Client hardware isn't going to
matter that much very soon, and will likely become free.
Just as Google (GOOG) Docs gains an offline capability,
more of what will make people and workers productive will be what they
get as pure services from cloud-based hosts. The next war is the cloud
war, and the battles will be fought around software as a service, desktop as a service, integration as a service, infrastructure as a service, platform as a service, development as a service, content management as a service, and so on.
The
new money will be made through a combination of access subscriptions,
direct payments for digital and media objects downloads, advertising,
revenue sharing from online retail transactions, and B2B lead
generation motifs.
Apple is in a good position to grab a portion of these revenues, but only a portion. Google is in a better position. And the Microsoft (MSFT)-Yahoo (YHOO) conglomeration may be in the very best position, but nothing is set in stone.
That
means we should expect quite a bit of news out of Apple soon that has
nothing to do with client-side hardware, and much more to do with the iTunes funnel and the .mac services cloud.
Microsoft
seems to gets this. Because it does not have a client hardware business
(mice and keyboards not withstanding) it can race to the next big thing
on software, better than, say, Dell (DELL). Microsoft has all but given up on
the the fat PC business for its future growth. Fat PC clients are a
maintenance business now for Redmond.
As long as the packets
make it down to the end point and get rendered, Microsoft can find new
ways to grow, which are all about the cloud, integrated services,
single sign on, virtualized CALs, and advertising. They call it
software plus services, but it's all about the services and the dollars.
Microsoft
may lose the installed Office business cash cow, but it can gain far
more variety of services ... with ultimately a larger addressable
market. Microsoft has figured out, thanks to Google, that the Internet
business is bigger than the PC business. And these services may well
represent a 50-year business trend line, instead of the fat client
20-year business that is now topping out.
Apple surely gets this
too, and it's already engaged accordingly. So let me make some
predictions. Apple will only have a handful more of meaningful product
generations on client-side hardware. Yep, that's right, the iPhone and the Air
are the beginning of the end, just because there's not too much more
innovation needed down there in the hardware space. Please just add
more flash memory capacity and build in the multi-protocol broadband
network connectivity to the chip, and we can wrap it all up.
There's
only about two to three more years left in the client hardware
innovation business before the end-points go pure commodity, even with
Apple's intellectual property. The hardware becomes a basic catcher's
mitt for the packets, a single chipset that grabs the several important
signals and processes them into a basic Web UI and supports the
runtime, virtualized most likely. I, for one, don't want to see native
iPhone apps; just use the browser and great UI.
But the software
layer on top of the hardware, now that's a different story. And it's
not a Windows domination segue guarantee, no sir. Too much baggage to
support. Microsoft needs a standalone lightweight client story, and neither Vista nor CE is it. Microsoft needs to practically start from scratch on the client software of the future.
And
so Apple needs to exploit this "window" of opportunity, and to take
iTunes to a much larger role: The new lightweight operating system for
the modern cloud services and commerce end-point. This new layer can
very quickly emerge from iTunes-as-cash register for music version --
and grow into the everything else under the sun as a service (and cash
register) layer.
And that's why Safari on Windows
is a massively important campaign for Apple. For Apple to be a player
in the cloud-based future, it must parley its iTunes hegemony into a
Safari critical mass -- and that has to come at the expense of Internet
Explorer and (sorry to say) Firefox.
Next, Apple will then need
to munge together Safari and iTunes into a uber client layer for cloud
computing-generated services reception and payments -- on mobile, PC,
MID, anything that can catch the packets and support an iTunes browser.
This is the funnel play, and Apple probably can do it better than
anyone.
And so then comes the big question. Will Apple use this
new software client model to make the services tie-in closed, open, or
how open? Will Apple try and do on the Safari/iTunes client model what
Microsoft has so far failed to with Windows? Will Google keep Apple
open enough on all of this?
Microsoft, with the massive Yahoo
audience it may soon own, will try and hold on to the client software
chokepoint -- even as Apple makes a mad dash for it. This is the new
war, and it has little to do with the difference between a Mac and a
PC. It's about both and how they access the clouds.
I suspect an
Apple-Google partnership could outfox the Microsoft-Yahoo hairball, and
that the Safari-iTunes-Android trifecta looks pretty interesting as the
new client platform. What do you think?
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