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I usually agree with Chris Dixon, but here I believe he is working from an incorrect premise. First of all it is not at all certain that the integrated approac
by hristov 14y ago
I usually agree with Chris Dixon, but here I believe he is working from an incorrect premise.
First of all it is not at all certain that the integrated approach is winning for smart phones. In fact depending on what definition of winning one uses, it can be easily said that the integrated approach is losing. There are more android devices being sold than iOS devices and the gulf is widening.
Here Dixon uses a bit of sleigh of hand by stating that Android is integrated now because Google bought Motorola. This is not true. Google bought Motorola for the patents, there is no indication that they will change their Android strategy. They still offer the Android software to all other makers at the same terms as they do to Motorola. And furthermore, Motorola is not even the largest Android phone maker. That honor belongs to Samsung and they are very much distinct from Google.
It is also not exactly true that the non-integrated approach always compromises performance. Remember the days of the old pre OSX macs? Those were truly integrated devices with a closed and proprietary architecture from top to bottom. Were they better performing than the PCs? Not even close.
There is an advantage in performance for the non-integrated approach that business people tend to discount. A non-integrated system is much more open and thus it can easily benefit from improvements from unexpected directions. Thus, for PCs we had the improvements like better sound cards, consumer grade video accelerators, and a shitload of improvements of motherboards, memory peripherals, etc. before apple got them. The open PC was ready to take advantage of any brilliant idea anybody in the world ever thought of. For the mac one usually had to get permission from the Apple headquarters first and Apple management were not always perfect or fast.
This is the great advantage of open systems. Their disadvantage is that there are usually problems with interfaces, etc. This was not much of an issue for the relatively large and well powered PC, but may be an issue for cell phones where power, heat dissipation and space are all at a premium.
In general, it seems that the integrated approach wins out in the beginning, when there is no broad marketplace open systems can take advantage of. But after a while, the non-integrated approach wins out. It seems that relatively less-integrated smart phones are slowly but surely beating their more integrated peers. For tablets, however, integration still rules.
- kunle 14y ago>First of all it is not at all certain that the integrated approach is winning for smart phones. In fact depending on what definition of winning one uses, it can be easily said that the integrated approach is losing. There are more android devices being sold than iOS devices and the gulf is widening. If you define winning as profits generated (which is an important definition because sustained profits earn you the right to keep playing, while market share does not), then the integrated approach is definitely winning, as Apple consumes the lion's share of mobile profits (there are several sources but for reference see here: http://www.asymco.com/2012/05/03/the-phone-market-in-2012-a-tale-of-two-disruptions/ http://www.asymco.com/2012/05/03/the-phone-market-in-2012-a-...). How things play out in 10 years is anyone's guess, but for now the profits, momentum and sentiment remain firmly on the side of the integrated approach.
- cageface 14y agoWe're really only five years into this game. Everything is still up for grabs.
- fpgeek 14y agoThe profit story isn't nearly as black-and-white as you're portraying. First, Apple may be #1 in this particular way of slicing the market, but #2 is Samsung and they're a poster-child for the modular approach - to the point where Apple (and other competitors) use many of their components. Second, when the modular approach was winning the last time around, PC makers weren't the big winners (that was generally a tough business). Instead, Microsoft and Intel were. This time around, that's not Samsung (Galaxy), HTC, LG, Motorola, Sony, etc (profits Asymco looks at) that's Google, Qualcomm, nVidia, TI, Samsung (Exynos), etc (profits Asymco doesn't look at, unsurprisingly, as it isn't obvious how to get them). IIRC, everyone on that second list is generally profitable and very bullish on Android (though none of them breaks out Android specifically, AFAIK). Moreover, Apple's iPhone profits include some amount of return from their SoC and iOS development, so ignoring the second list subtly tilts the scales.
- nl 14y agoYeah, that "Apple consumes the lion's share of mobile profits" is rapidly becoming a myth. Eg: [Samsung] posted a record net profit for all its divisions of 5.05 trillion won ($A4.43 billion) in the first quarter, thanks largely to strong smartphone sales.[1] [1] http://www.smh.com.au/digital-life/mobiles/samsung-galaxy-s3-to-hit-10-million-sales-20120625-20xvx.html#ixzz1yskenc7t http://www.smh.com.au/digital-life/mobiles/samsung-galaxy-s3...
- sien 14y agoAh, sleigh of hand, one of Santa's tricks for getting all those presents out on time on Xmas night.