One of the most impressive aspects of Apple product launches is that even though the announcements themselves are usually fairly accurately predicted, there is always some element of surprise that remains.
The iPhone OS announcement which followed quickly on from the iPad launch was no exception. Multitasking was a heavily demanded feature and the main competitive weakness of Apple mobile devices versus Android. However the way Apple implemented it was unique and has lots of ramifications on the ecosystem partners.
By mandating that applications write to a multitasking API which is part of the OS, the only background processes which are running are under Apple’s control. While this will require some extra steps from the developers, it seems like a good compromise which will allow Apple to be confident of delivering a good user experience but also retaining a broad ecosystem of developers.
Here’s some of my thoughts on various aspects of the announcement and who the winners and losers will be.
1. Multitasking – Music
Winners: Pandora, Spotify, Rhapsody, Napster, etc.
Loser: iTunes
Until now only Apple native music applications could run in the background. Other music applications although downloaded in great numbers were at a big disadvantage by only running in the foreground. At the event, Apple presented Pandora as complementary to the iTunes. I don’t think it is or perhaps there is more to this relationship between Pandora and Apple than meets the eye. I’m convinced that people will listen to more streamed music at the expense of downloaded music and by making these services run more smoothly Apple is accelerating the industry towards a future where music is predominantly network based (e.g. Spotify) rather than locally stored. I suspect Apple can see this and will need to own a music streaming service of their own. I think they will build not buy here. Apple always likes to launch a consumer service with a proprietary slant/innovation and you can’t do that if you are just buying a service people are already familiar with.
2. Multitasking – Voice / Calling
Winners: Rebtel, Skype
Losers: Carriers
Wow, this really can’t have been a popular move with AT&T and the carriers with big iPhone subscriber base. Lack of multitasking for third-party voice services obviously made inbound calling essentially impossible. For IP-based mobile services like Skype and Rebtel (Index investment), enabling multi-tasking is a real godsend. Particularly for international calls and video calling applications I can see people abandon the overpriced tariffs of the mobile operators for third party applications which leverage the phone’s contacts and native calling UI.
3. Gamecenter
Winners: Small independent App Developers
Losers: Openfeint, Scoreloop, ngmoco’s Plus+ network
The biggest problem however in the iPhone gaming ecosystem is lack of social discovery which was obviously vital to the growth of gaming on Facebook. The other key difference between Facebook and iPhone as gaming platforms is that Facebook is server-based and assumes a permanent connection whereas iPhone games are downloads which are generally designed for offline play or for a play mode where they are only sporadically connected. This makes it much harder to build the “mini-virtual-world” type of game which monetizes so heavily online (e.g. Pet Society, Farmville, Acquarium, Moshi Monsters). While the Apple ecosystem offers lots of games that offer quickfire entertainment, few titles build real emotional connection and engagement with users and hence the monetization per paying user is much lower e.g. $3 bucks versus $30+ LTV for paying users on the leading Facebook games.
The Gamecenter is Apple’s answer to some of these challenges. Apple was pretty fuzzy about what would be released and when but the key elements were a network-based high score table, a “quickmatch” engine for multiplayer gaming and basic social discovery. What they didn’t state was which social graph would power this social discovery. These features are directly competitive with the Openfeint, Scoreloop, Plus+ despite their claims otherwise. Directionally therefore the Gamecenter initiative is a big positive for developers. Will it give rise to a major new player as big as Zynga or Playfish or will these social gaming companies themselves attack the iPhone with more firepower? Watch this space…
That’s already a long post… I’ll call it quits there and well done for getting to the end.
All the best.
