iTunes and Steve Jobs’s walled garden: a major strategic blunder for Apple

 5th October, 2010

Apple’s choice of iTunes as the repository for its social network was a major strategic mistake

Back in 2007, when I unboxed and activated my first iPhone, I remember my surprise at being required to manage it in iTunes. Until then, for me, iTunes was an application for playing music and sending it to my iPod. Using it to manage settings on a telephone spontaneously seemed rather counterintuitive.

Of course, the iPhone was, from the outset, designed as the iPod’s bigger, voice-enabled cousin. It plays music, among other things. But it still seemed strange to me at the time that Apple forced me to manage it via iTunes rather than online, especially since activation necessarily involved a check with Apple’s servers.

Then, in 2008, came the App Store, and then in 2010 the iPad: and each time, iTunes acquired an extra load of bloat. It now frequently crashes on launch, forcing me to reboot my Mac before I can even start it. In fact, I don’t even use iTunes to play my music anymore: it’s easier to use Spotify, which can import all my iTunes library (apart from the stuff I actually bought from Apple, of course).

The App Store is a nightmare to use: because I live in two different countries, I find myself juggling between two different Apple Store accounts. Some applications are only available in one country and not the other. And, of course, you can’t transfer your purchases from one account to the other.

The problem was made worse by forcing users to pilot the iPhone from within iTunes, a move reminiscent of Microsoft’s ill-fated 1990s MSN Network

When the iPhone launched, incomprehensibly, it wasn’t possible to sync its data over the air. Apple eventually revamped its MobileMe cloud system to address that glaring inconvenience, but MobileMe’s inadequacies eventually prompted me to switch away from it altogether earlier this year. It was increasingly looking as if Apple was deluded into believing it should and could force iTunes on its users as the obligatory nodal point for all their devices to sync through. In fact, it was as if for Apple, the web — which is the obvious, open, efficient space where data can be obtained, updated and synced — was a medium to be avoided at all costs and used only via Apple’s proprietary protocols, and using its house client, iTunes.

This reminded me furiously of a major IT player that had already made the same mistake. Back in 1995, when the Internet was just beginning to emerge, Microsoft launched the Microsoft Network, its own closed and proprietary alternative to the web, through which it expected to channel its users, using a battery of closed media operating Microsoft-only protocols: Hotmail, MSN Messenger, etc. This was arguably Microsoft’s most costly strategic mistake, one which left it durably behind the pack when the tech sector’s focus massively and irreversibly shifted to the web over the period 1995-2000.

Apple’s intention of making its new Ping network operate entirely within the iTunes walled garden shows it has still not leant this lesson

Then, in the fall of 2010, came Ping. Although Apple negotiated with Facebook, now become the world’s de facto universal social network, it ended up having to launch Ping on its own… and chose to do so as yet another component of its bloated iTunes-centered walled garden.

Apple’s growth in recent times has been almost exclusively fuelled by the sale of hardware devices (the iPhone and the iPad) destined to share information online. Why Mr Jobs has chosen to imprison this growth within the confines of a bloated, crash-prone application sitting on users’ computers is pretty inexplicable. Even setting up iTunes to play music files located on a different drive to the computer on which it is installed is something Apple deliberately make difficult. There was speculation this summer that Apple was going to announce a cloud-based, Spotify-style music server on which users could keep all their music; but nothing happened. Before Ping had even launched, comments universally predicted it would fail to pick up, arguably for much the same reason that Google’s Buzz failed to take off because Google insisted on users accessing it only via their Gmail accounts. Unless Apple reaches some sort of agreement Facebook over Ping, something which may yet materialize because it is actually in both companies’ interest, Ping will fail.

Unless Apple moves towards a clearly structured server-client ecosystem, it runs a serious risk of significant stunting its future growth

In both cases, it would have been childishly simple to sign these networks around a clear server-client structure, with a web interface, an API that could be used by third-party developers to build an ecosystem of applications around the network, and an initial set of desktop and mobile clients provided free of charge by Apple; this would have been compatible with charging for certain premium services like storage. In fact, it is inexplicable that Apple, which sells 70 per cent of upmarket laptops, doesn’t take advantage of this to offer new buyers of its hardware the option of creating a free, open cloud-based account which could host their music and applications, and that could easily connect with other social networks. Because of the huge number of people who buy Apple’s products’ this would immediately give it the credibility it has so far miserably failed to establish in the cloud. By making Apple’s online network free and open (the latter including, crucially, its being open for third-party developers) would remedy at a stroke the two defects of its MobileMe solution: its absurdly-high annual $99 annual price tag; and its pretension that Apple’s walled garden can provide users with everything they crave through one bloated application installed on their computer.

It’s revealing that all the success stories in tech in recent years, whether large or small, have been based on a fully-fledged application of the server-client paradigm described above. Gmail, Google Reader, Facebook, Twitter, Dropbox, Spotify all have one thing in common: they store account data, free of charge, in the cloud, offer web or dedicated client interfaces to access, and (generally) have encouraged the development of third-party software to complete their ecosystem. Apple, for some reason, doesn’t understand this basic paradigm and was only dragged into it, reluctantly, for its overpriced MobileMe application suite. Even in the latter case, the resulting product, made available a year later than it should have, is noticeably less polished than Google’s.

In the longer term, if Apple persists in its strategy of pretending the cloud doesn’t exist, it could end on the path as Microsoft when it turned its back on the Internet in the 1990s. Times have moved on, but the undying delusion is the same: hubris, arising out of the curious idea that in a fast-changing world in which value is created by new ways of exchanging information, you can somehow lock your customers into a walled garden providing you make it sufficiently beguiling to keep them there.