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Why Apple is fighting Flash CS5

I’ve written about this before, and I will probably do so again.  Read this comment thread first: http://news.ycombinator.com/item?id=1250946 .

There are two helpful historical analogues to Apple’s behavior regarding the iPhone OS. First, there is the console market (read my earlier entry here). Second, there is Microsoft Internet Explorer in the 1990’s (i.e., the Netscape antitrust battle). Today’s move to head off Adobe’s Flash CS5 cross-compiler should be viewed in light of both histories. I won’t bother repeating my arguments related to the effectiveness of Apple’s “walled garden” console-style approach to apps and the app store: it works and there are many valid business reasons for doing it. What is more interesting today is the Internet Explorer parallel.

Microsoft dominated desktop computing in the late 1980’s through the early 2000’s. The ease of developing for the platform was a big cause of this dominance. If you built anything big enough or important enough, eventually Microsoft would either buy you or compete with/destroy you.  See MS Office, Powerpoint, Visio, as well as countless (eventual) Windows built-in features. Nevertheless, they were caught completely flat-footed by the Internet. Suddenly, the end was in sight: if the browser, server-side software, and the network were the platform, Windows would no longer be necessary.  In fact, this evolution has largely happened, even though you’re probably still using plenty of Microsoft software, including Windows. Google Docs, Facebook, Wikis, even email — all of these are internet software and pretty much work in any of about 5 or 6 browsers regardless of operating system.

Microsoft (rightly, if belatedly) saw this future and were absolutely terrified. They decided to leverage the competitive advantage of Windows’ dominance to make sure they would also create the dominant browser. For a time (read: 4.0 through 5.5), they did. Their browser was better, faster, and won over 90%+ of Windows users (i.e., 90%+ of the entire browser market). Ultimately, this use of a monopoly position to create a second monopoly position ran afoul of antitrust law in both the US and Europe — in fact, US antitrust law is fairly narrow and pretty much ONLY prohibits the use of monopolies to create second monopolies.

So today, Apple is in a similar position. They have created the absolute dominant mobile app platform. Only, it would be ludicrous to suggest that they have a monopoly in any traditional sense of the word: their devices only work on one US carrier and there are at least two (soon, 3) major, well-funded platform competitors: Google Android, RIM Blackberry, and soon Windows 7 Mobile. So they are legally free to take the Internet Explorer page right out of the Microsoft playbook: to utilize one’s dominant position to block out the commoditization of one’s platform.

The further ahead Apple can stay in the “most/best apps” race, the more iPhones and iPads they can sell. That is, having a collection of apps that remains head-and-shoulders ahead of everyone else is a key competitive advantage in launching and selling products. The highly successful rollout of the iPad probably owes its success to this strategy. Purchasers know that, even if the iPad app landscape is bare at launch, Apple has proven they can put together a development framework and app store that delivers results for developers and end-users.

I’d bet Apple knows they can’t keep the vandals outside the gates forever: eventually, as with the web and browsers, open standards will probably win. Cross-platform tools like Flash will be excellent productivity tools for developers of all stripes. But until the mobile hardware and operating systems scene stabilizes, they are going to continue to rake in the dollars. Judging by the history of the PC era, and then the Internet era, this stabilization and commoditization will take 10-20 years, by which point software developers will probably be fighting an entirely new chimera.