The bogeyphone: A threat to Apple that isn't

Macalope

How has Apple not gone out of business yet from all the competition from magical devices other companies haven’t shipped yet?

Chunka Mui is the latest voice in the perennially tone-deaf choir known as the Forbes contributor network.

“How Google’s Modular Phone Threatens Apple and Samsung” (tip o’ the antlers to @JonyIveParody)

If you’re wondering what he’s talking about, here’s The Verge’s coverage of it.

Much of the analysis of Google’s new modular phone wrongly focuses on the cool factor of its Lego-like interchangeable parts and whether consumers will buy into it.

It is wrong to focus on whether or not consumers will buy into it because technology for technology’s sake always wins. Certainly if there’s anything we’ve learned over the last 30 years it’s that. [Written on my Palm Foleo.]

The focus on consumer acceptance is important, of course, but misses the real threat that Google’s Project Ara poses to smartphone manufacturing giants—and especially to Apple and Samsung Electronics.

How did we miss that?! Could it be that there are so many dire threats to Apple that we have threat overload?

Today’s smartphones are tightly controlled, closed systems.

For no good reason whatsoever!

As a result, manufacturers enjoy a chokehold on innovation and immense power over both suppliers and customers.

What good are designers and these so-called “engineers,” very few of whom even run trains? Why, you could do just as good a job as they can Homer Simpson car!

If successful, Google could disrupt the industry’s current dynamic and threaten, in particular, the immense market power and profits that Apple and Samsung enjoy.

You know what else is really cool? Lasers. I predict people will stop buying iPhones and start buying lasers.

Take cameras, for example.

Yes, let’s! The iPhone is the most popular camera on Flickr. Is that because it has the best camera hardware? No, it’s because it has the best camera experience.

In all the years of Android’s existence, in spite of huge investments of time and money, there’s never been a standout Android cameraphone. Some have cameras that are better in low light than the iPhone’s, many have higher resolution, and a number claim to be faster at focusing—but none pull it all together into the same comprehensive package that the iPhone can offer.

So good luck making a snap-in camera experience that’s better.

Buyers only get to choose from a few options and must buy an entire new phone in order to get new cameras.

Like it or not, the consistent trend in technology over the last 15 years has been fully integrated systems. This is why Apple’s done so well over that period, as it can take advantage of that integration like no one else. This crazy phone might appeal to certain technology fanatics, but it’s not going to appeal to most people because most people don’t want to have to pay that much attention to every aspect of their phone. They just want it to work.

Consumers could choose to upgrade only their cameras rather than entire phones, or they could choose to upgrade more frequently than typical upgrade cycles.

The same holds true for displays, keyboards, memory, speakers, batteries, sensors, and endless other capabilities that most of us have yet to imagine.

This sounds like a nightmare. A horrible, fiddly nightmare.

“You know what I really want to do? Upgrade my phone’s floating point unit.” – no one ever.

History shows that modular architectures can ignite tremendous innovation while unleashing devastating consequences for market leaders.

In “Design Rules: Volume 1, The Power of Modularity,” Carliss Baldwin and Kim Clark lay out the theoretical underpinnings and cite numerous examples of this competitive dynamic.

Not at all surprisingly, that book was published in 2000.

How might the smartphone industry be disrupted if a similar pattern unfolds? Here’s one scenario:

First, aliens invade the Earth. Then comes the robot uprising. Now, stay with me, because it’s about to get weird...

For a dramatic illustration of how modularity might threaten Apple and Samsung, consider what happened to IBM.

IBM used to be the most important technology company. Now it isn’t. That’s why this stupid Lego phone will topple Apple and Samsung.

Many dominos must fall into place for a similar dispersal of value to occur in smartphones. With Google’s deep pockets and strategic interests orchestrating the threat, however, it is a scenario that has to be taken seriously.

Google has “deep pockets.” Apple, meanwhile, is presumed to be living in its parents’ basement and surviving on Top Ramen.

Apple and Samsung, which enjoy more than 100% of current smartphone industry profits, certainly have a lot to lose.

They do. And some day they may lose it. But it ain’t gonna be to this thing.

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