Why Google will win: entrapment in the iPhone is a failing long-term strategy

The iPhone is a pretty walled garden

The iPhone is a pretty walled garden

Entrapment can be an effective strategy when you are building up a business. Marketers tend to call that customer lock-in. From the perspective of the business this sounds like a great thing to do. Hook the customer to your business and dont let go. From the perspective of the customer it sounds exactly what it is, an entrapment.

There are many examples where entrapment has proven itself as a successful strategy. Think AOL, Facebook, any advertisement driven business, newspapers, banks, cable, insurance or telephone companies. Entrapment works because joining is easy and leaving is nearly impossible. But in most cases these companies haven’t read their history books. Entrapment is a short term winning strategy, but it’s bound to fail in the long term.

It’s human nature they are up against. Sure, we are all lazy, naive, and let things happen for a while. But in the end we don’t like to be trapped. We don’t like it when our freedom (choice!) is limited by the thing that entraps us. And this desire to be free is what drives competition in. Someone creates a monopoly? It’s bound to attract newcomers that blow up that business by doing things differently (remember the innovator’s dilemma?).

The most recent success story wrt entrapment is the iPhone. It revolutionized the mobile space. It showed that a market that was dominated by hardware manufacturers and operators couldn’t really innovate anymore. Apple proved that there were HUGE improvements possible in the user experience of a mobile device. And it has become a huge success.

With the iPhone came entrapment, a strategy Apple has mastered like no one else. Apple dictates every aspect of the iPhone. It has the sole power to decide what app makes it to its store and becomes successful. There are countless stories (here’s one) available by now of developers getting stuck in the horror and randomness of the Apple approval process for their app store.

It doesn’t end there. From the initial launch Apple has even dictates what carrier the end user has to call with. I’ve been using the same mobile operator for years and I am very satisfied with it. And Apple has the audacity to decide that I must change to another operator in order to be able to use their product? For me that was a bridge too far. I do not want to be restricted or entrapped. I want choice.

I’m writing this because I feel it is time to remind Apple of history. Entrapment may be a short term winning tactic, but it’s a long term failing strategy. You can already see the moles digging through this carefully constructed walled garden. Palm has changed it’s app store policy entirely, giving freedom to developers to publish apps. And now there is Android. Where Apple has focussed on building the perfect mobile device, luring people into their trap like sirens, Google has worked with the industry on a new open standard. Where the tech industry initially laughed at their first attempt, I think everyone will now fall silent with the ecology that Google and partners are now creating.

TechCrunch counts an avalanche of 24(!) new android phones in the market. The tech purist will now argue that none of these phone can match the awesomeness of the iPhone. I say BS. The awesomeness of the iPhone will be copied, changed, improved, matched/not matched. It doesn’t matter. Let me repeat that. It doesn’t matter!

The one thing that Apple can’t do and Google just did is offer choice. The empire Apple just started to build up using their dictatorial and proprietary strategy just got blown to pieces by choice. Who do you think will win this battle? Android will flood the mobile market with hundreds of new phones, thousands of apps to go along with it, and presence with every hardware manufacturer and mobile carrier.

Entrapment is great at start. It probably give a lot of adrenaline to dictate what the world looks like. But what Apple and so many others fail to realize is that it’s all short term tactics. In the long term the only winning strategy is a customer that wants to be with you, not one that is trapped into your service. And for that reason the iPhone will be marginalized by its competitors. History already taught us that.


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16 Responses to Why Google will win: entrapment in the iPhone is a failing long-term strategy

  1. Wendy says:

    Up here in Canada, two of our mobile carriers, Telus and Bell, will be offering the iPhone starting next month. That sounds like choice to me. Part of the issue before was that neither of these carriers had a 3G network that would support the iPhone. Rogers did. And with all the talk of the discontent between the AT&T and Apple deal, I won’t be surprised to see them offer up the iPhone to other carriers as soon as they can in the US either. It does appear to be a short term strategy. Just short term, in this case, meant a few years rather than just a few months. I’m not sure that the iPhone would’ve picked up so much had they not gone with exclusive carriers. And would other companies have come out with the phones they did had Apple offered their phone to everyone the first go around?

  2. Hi Wendy,

    there are many Mobile carriers worldwide that have 3G networks and would love to sell the iPhone to their customers. The reason they don’t is simple. Apple won’t let them. They choose exclusivity as a strategy. Great for Apple, bad for the user.
    Apple doesn’t have a good history when it comes to open platforms and providing the user choice. Do I need to say iTunes? 😉

  3. Jennifer says:

    I have to say my contract w/ AT&T (who were incredible when they were Suncom-go figure) is up and I want an iPhone bad enough to taste it. Unfortunately, AT&T service is horrible now where I live and I am probably going to end my 15 year relationship with them in search of better service. What Apple did not seem to consider, is that cell phone service varies in every place, and given the choice to use the iPhone on a carrier that works, it’s a much better option than having a cool phone that you cannot use because you don’t have service. I have many friends with the supercool iPhone who cannot make a call because they don’t have service. Aside from wanting choice, Apple should have considered the millions of potential customers who cannot purchase, or will leave, because of coverage issues. Or perhaps they just partnered with the wrong company. I think Wendy is wrong in that they would not have picked up so many users offering multiple carriers–the only company who picked up more users as a result of this exclusive contract is AT&T. Wouldn’t be easier just to stay with the carrier you have (and are satisfied with) and be able to use the iPhone instead of having to move to a carrier with poor service to use this device? It makes no sense. Have an android suggestion for me?

    To boot, independently/locally owned AT&T stores are not allowed to sell the iPhone, only corporately run stores. So sticking it to my local merchant isn’t winning AT&T any points with me either.

  4. wbw_Jeff says:

    From everything I hear the Verizon-Droid is a great phone, superior to the iPhone in many ways. But my thoughts on this are in no way technical; I want to comment on fashion and style aspect. How long will the iPhone be a desired accessory if everyone has one? Don’t you think that after awhile people will want to pull out a different phone just to show that they are not part of the same old crowd? Just like everybody else?

  5. Doug says:

    As always, a thought provoking post.

    I think that sometimes with Apple we tend to confuse success with market share. I doubt that Apple intends to dominate the smart phone space in general. If the Mac and Mac OS are any guide, Apple does not see market share and profit as directly correlated. And they seem to be on the right track: they just reported their best quarter ever.

    So while I have yet to see a phone that is quite as smooth as the iPhone, it’s not the best selling phone out there. Apple’s market share in terms of smart phone OS is also small. Listen to Ballmer for 5 minutes in any interview and he gloats about how Microsoft software powers several times more phones than Apple.

    Assuming that Android comes to dominate the smart phone space market share wise, does that mean Apple “loses” and Google “wins”? I don’t believe so. Apple won’t have “lost” anymore than they have “lost” with the Mac.

    My two cents.

    • Doug.

      Good point. Scarcity can be very effective as a strategy. Apple does that very well. But I’m sure they would want a big piece of the pie. And while the iPhone will have it’s own place in the market, I think they won’t reach full potential with this entrapment strategy.

  6. sachendra says:

    Its pc vs MAC all over again, only this time Apple will be routed by Google instead of Microsoft

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  8. Marcus Zuckerburger says:

    Remember Sun Microsystems? Yeah, that company that used to put ‘Open’ in front of any product it couldn’t sell?

    And Windows Mobile? That un-walled garden that even softies don’t use anymore?

    There is a big difference between wanting Google to win and Google actually winning.

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  10. Jon Winstanley says:

    There are a lot of technical difficulties related to mobile development that are helped by apple’s walled garden. Screen resolution and a certainty about the hardware functionality being 2 important ones. Plus the tough approval system means all apps meet a good standard and therefore increase trust in the customers.

    In other markets, being open has been beneficial but in the mobile domain there are certainly advantages to the closed system. As long as Apple slowly improves their SDK and gradually improves objective C I can’t see Google or anyone else overtaking them for a very long time.

    • Jon,

      I’m not sure I agree. I think Apple certainly raised the bar when they introduced the iPhone.

      Their hardware is ok, but not impressive. It’s the way they redefined smart phone interfaces what set a new standard. However, controlling what operator can be used doesn’t make the iPhone a better experience for the end user. It restricts freedom and choice. Their app store approval system can be tough, but more importantly its biased. It seems to prevent real competition to take place (which will be good for the user).
      I think that history shows over and over that in the end there is no way to control a market or user like that.

      It will be extremely hard for Apple to compete with an open platform such as Android. For now Apple has the lead, but my bet is that in a year from now Android will have gained significant market share.

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  12. Mike Sadowski says:

    Well, if you leave it up to carriers like Rogers on how to sell Android phones.. Google will FAIL. The whole fiasco of their HTC Dream/Magic with the 911-GPS bug and their custom ROMs and capping the Dream at 1.5, having to shell out Magics to pissed off consumers, etc…

    At least Apple didn’t allow Rogers to F with their hardware. If Google wants to keep its good name, it better start enforcing all carriers sell and support only “Google Experience” phones.

    I’m one of the poor shmoes who bought the “Dream” and ended up with a user nightmare, knowing my phone will become obsolete. Im just glad i bought it used and didn’t get locked into a 3yr contract with that substandard piece of garbage. Rogers seems very capable of destroying Androids chances of flourishing here in Canada.

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