Umair Haque is confused about the iPad

It’s been a tough month for Umair Haque. First, he conducted the world’s most boring and pointless interview at SXSWi, and now he blogs his extraordinarily muddled thoughts on theiPad.

It’s tough to sum up what he’s saying because it’s so confused. He seems to want the iPad to be more open both physically and in terms of installing apps and content. This is understandable in some ways, but he’s an economist, and his argument seems to be saying that Apple will not succeed with the approach they’ve chosen for fundamental market-based reasons. It’s just that he fails to provide any evidence at all that this is so.

Let’s take it one paragraph at a time.

The iPad’s like an amazing hairdresser — who wants to monitor your bathroom for authorized shampoo, conditioner, and water. By building a device that liberates services, but locks down “product,” Apple’s shooting itself in the iFace. It’s as if Apple wants to step into the hyperconnected network age — but also keep one foot firmly planted in the industrial era.

Hahahahaha! iParadox? iFace?! Those are great gags! Oh, hold on, I think I just pissed in my iPants.

Puerile jokes aside, the analogy is nonsense. Critics of the openness of the iPad (and the iPhone) often conveniently ignore the fact that it has unmoderated access to the entire internet (minus anything written in Flash) through its browser, Mobile Safari. The entire pitch for the iPad emphasises this: “it’s like holding the Internet in your hands”.

I’m also puzzled by this false dichotomy between the “hyperconnected network age” and the “industrial era”. Apple’s entire business model is centred on the idea of manufacturing physical objects while also selling software that is tailored for that hardware, to which they have added the idea of services such as iTunes. Surely now the argument over whether that can work is over?

The iParadox is this: Apple should be striving to commoditize products if it wants to benefit from services (or vice versa). But it’s trying to benefit from both at once — which is, simply put, strategically self-destructive. One is the mirror image of the other.

Here, Haque comes closest to making some sense, and here’s Tim O’Reilly saying something quite similar, only in a much more cogently argued way. Obviously Apple are never going to enter the commodity hardware business, and it’s idiotic to suggest that they should. The nugget of sense is in arguing that they should offer services – the prime candidate is MobileMe of course – for free, services that further bind you to Apple’s world. As it is, MobileMe is overpriced and under-specified. I would love Apple to make MobileMe available to all Mac, iPhone, iPod Touch and iPad customers for free. That said, they do offer a large-scale service that is free to users, and in it there are thousands and thousands of free products. It’s called the App Store.

Service economics are superior: services are less risky, less capital intensive, higher skill, higher loyalty, and dramatically less imitable. The result is that service-centric businesses tend to have higher margins and create significantly more value than product-centric businesses. That’s why every economy (and sector) that transitions past the industrial era is built on them.

Yes, Apple are really suffering from low margins on their products, aren’t they? Meanwhile, how much money have Google made out of Buzz? Android is Google’s attempt, so far a failed one, to imitate the success of the iPhone. No company anywhere has managed to imitate the quality of the unibody MacBook Pro, the widescreen iMac, the iPhone or even the much simpler iPod. Seriously, what the fuck?

The iPad’s App Store isn’t technologically open. It is, more significantly, economically open: it’s an open market for services. Many platforms are “open,” technologically. But the costs of development raise steep entry barriers.

Consider Linux, which still doesn’t have a user-friendly GUI. “Openness” means nothing if the price of a can-opener begins in the millions. Real openness means that the costs of creating iPad Apps are relatively miniscule: Anyone can develop stuff, and quickly, literally bring it to (the) market. More to the point, you can access tons of services from beyond the App Store on the iPad: it’s connected to the entire Internet, remember?

Here, Haque suddenly seems to be arguing in favour of Apple’s approach. He makes an argument that shows that the App Store’s closedness is in fact not a problem; more than that, he argues that technological openness is not capable, on its own, of providing the platform that developers need in order to get their products in the hands of paying users.

The clunky can-opener analogy thing confuses me, too. The real costs of developing an iPad app are, like the real costs of developing a Linux app, related to the complexity of the app, not to the openness of the platform. It’s just that, if you’re interested in actually selling your app to users, the iPhone OS offers you a whole bunch of things that you don’t get on Linux, by far the most important of these being a very large installed base. In other words, the iPhone and App Store offers developers the chance to make a return on their investment of time spent writing code. What Apple have done is made it orders of magnitude easier for people to make money out of writing software than it has ever been before. It’s really that simple.

(Note that he then reminds us that the iPad can access the entire Internet, something that he previously ignored with his tortured hair salon analogy.)

Let’s continue.

But while it liberates people to enjoy services, the iPad chains people to “product.” Its Grand Canyon-sized flaw is lock-in: Apple’s trying to lock people into media “product” in a variety of not-so-clever ways. First, through limiting physical connectivity (a lack of USB ports). Second, through file-handling: Attachments are a pain on the iPad, perhaps by design. Third, through obscure, muddled “rights management.” File browsing happens through iTunes, whose DRM is so backwards, it can’t even remove files from iPods (talk about lock-in).

Want to move your books, music, and video around? Have fun trying. It’s possible, but Apple’s made sure it’s as painful as possible.

First of all, this is factually wrong. Sure there are no USB ports, but there is a 30-pin port, for which there are a host of compatible devices and, since iPhone OS 3.0, developers can directly program things that are connected to the iPhone or iPad through it. So, if someone wanted to, there’s nothing whatever stopping someone creating a 30-pin to USB adaptor and then doing whatever they want with whatever devices get attached. The iPhone OS devices also support Bluetooth and wifi, providing yet more ways to connect the device to external things that Apple has no control whatsoever over.

“Attachments are a pain on the iPad, perhaps by design”. (I’m not sure what he means by “attachments” here. Is this a specific point about some features he’d like to see in the mail client, or just a clumsy way of saying “files”?) The iPad OS (which is actually iPhone OS 3.2, not yet available for the iPhone, but surely coming) features a shared file system area for documents that gets mounted as a drive when attached to a computer running iTunes. Apps on the iPad can read from and write to this shared area at will, even when not connected, so it’s not at all hard to see how “attachments” can start to get a whole lot more useful, across a range of apps on the device.

“File browsing” for media can, and normally does, happen through iTunes if you’re an Apple device owner, but you’ll also find that this is simply a view on the real files on the real file system. iTunes stopped selling DRM-crippled music a while ago now, and there’s nothing whatever stopping you from copying a track bought from iTunes off your computer onto another one or doing whatever else you would like with it. This is more “painful” than it perhaps might be, but it’s ridiculous to suggest that Apple have made it deliberately so. There are ways that they could make it so much more painful if they so wished! Enabling this behaviour just isn’t a design goal for iTunes, any more than it is for iPhoto or Aperture, but there is a scripting interface to iTunes that would allow you to write an application to make it a whole lot easier if you wanted to. My suspicion is that these tools don’t exist or don’t have loads of exposure because only a very few users actually want them.

Videos are sold with DRM, but this is at the requirement of the content owners. Apple have shown that they’d prefer to sell digital assets without DRM by their actions over DRM-free music, so there’s no reason to think that they hold a different view on movies. The fact is that Apple’s choice is to sell DRM-crippled movies, or not to sell movies at all. They’re no more able to demand DRM free movies are available on iTunes than a high-street DVD shop is to demand that the DVDs be stripped of their copy protection.

That said, it’s worth noting that, unlike with music, Steve Jobs does have a vested interest in the movie business as a major shareholder in Disney. Maybe he’s soft-pedalling Apple’s attempts – if they exist – to get the movie studios to relax their requirements, but the fact remains that you can’t get the movies that iTunes sells without DRM through any legal channel.

It’s the same set of issues with books. Again, there’s an enormous fight to be had with the content owners here, and Apple is again faced with the choice between selling books through a crippled store, or not selling books at all. There’s exactly the same problem on Amazon’s Kindle and Barnes & Noble’s Nook.

The problem for our aforementioned hairdresser would be, simply, that by locking customers into expensive “product” he would limit the quantity and quality of services he could provide. So it is for Apple: I’m less likely to consume services because the iPad locks me into expensive, immobile “product.”

iTunes sold an enormous number of songs before DRM was removed, and they have sold literally billions of apps, all of them DRM protected. The truth is that a great many users simply don’t know or care about DRM when the experience is as good as it is on Apple’s services and devices. And it’s not as though shifting units, whether physical or digital, is something that Apple are struggling to do.

You can’t live in the industrial era and the network age at once. The strategic confusion at the heart of the iPad makes it a grandee in revolutionary’s clothing. Yes, the software’s awesome. And its promise is vast. But keeping that promise demands less compromise with yesterday and more revolution for tomorrow.

Again we’re back to this false dichotomy between the “industrial” and “networked” ages. Two counterexamples. Fiat’s EcoDrive lives in both the industrial era (it’s built into cars that are made in factories that house machines and workers) and the network age (it analyses your usage of your car and works out how fuel efficient your driving style is). Nike+iPod lives in both the industrial era (you buy trainers that are made in factories that house machines and workers) and the network age (it analyses your training sessions and hooks you up with fellow runners).

Haque wants to pretend that literally everything has changed, just as the prophets of the mid-1990s wanted to pretend that the high street would disappear, and the prophets of the mid-1960s wanted to pretend that cities would disappear. The truth, of course, is that the future will be a mix of things that are familiar and things that are new. Such a nuanced view makes for less hyperpolic blog posts though, so it’s easy to see why Haque takes the extreme view that he does.

The truth is that Apple does both of the things that Haque wants it to do, only in a much better way than he suggests. It makes beautiful, desirable physical objects, and it supplies a range of services – networked services – around those objects that make them yet more desirable. They have opened it to the exact degree required to prompt tens of thousands of developers to write apps and millions of users to download billions of copies of them, something that has eluded every single other smart phone vendor. Let’s not forget that the iPhone only really took off when they brought out the 3G model and added the App Store; it’s easy to forget that the iPhone was, Mobile Safari apart, entirely closed prior to June 2008.

What Apple has done is to find what a great many users see as the sweet spot between openness and usability, between control and utility. There are, undoubtedly, things they could do better, features they could add to their devices and to their software, and users who would buy their devices if such features were added.

But this is exactly how it’s always been with Apple, and it is unarguably working brilliantly both financially and critically. They have always been happy to accept that some users won’t want to use their products, and this has enabled them to focus on a specific set of users for each device, creating users who are overwhelmingly happy with their purchases, rather than providing an average experience to as many users as possible.

What is entirely missing from Haque’s post is an example of a company that is even remotely close to being as successful as Apple is with the piebald approach that he proposes. Until he can provide such an example, his thoughts are at best unproven, at worst simply nonsensical.