OK, my title is maybe a little misleading. Perhaps it should say "Continuing the open vs. closed system argument…" or "Continuing the Apple vs. everybody else argument…". No matter. If you're among the people who give a rat's ass about all this, you'll get the point. But after all the stimulating, ahem, discussion triggered by Kos' ruminations on his new iPad yesterday, I thought "Why not continue the dialog?"
To kick things off, I'm going to recap some ideas of Clay Christensen, one of my favorite business authors. Then I'm going to say why I think his ideas don't totally apply to devices like the iPad.
In his superb book, The Innovator's Dilemma, Christensen (a Harvard business professor) laid down the following principle:
In the early stages of the development of any new technology (say, computers), the winners are likely to be the companies that create closed, end-to-end solutions. The reason is that it's really difficult to get all the various components to work together smoothly as an integrated whole. Companies that solve this puzzle to assemble closed systems that work well are rewarded with high profit margins. Classic examples: IBM mainframes of the 1960's and 70's, and, I would argue, Apple's iPod/iTunes "walled garden."
But as the market matures, eventually standard interfaces between components are developed that make it much easier to assemble a modular system from off-the-shelf parts. Note, for example, that you can replace your computer's Seagate hard drive with a Western Digital and it will work fine, because they're both exactly the same size and use the same standard SATA interface (though it may be hard to imagine today, once upon a time every disk manufacturer had their own proprietary interface). Under these "open system" conditions, being a simple assembler will be much less profitable, because your value added is much smaller. Profits (such as they are) will tend to devolve to the makers of the components of the assembly (and the assembler won't have a lot of profits available to invest in advancing the technology).
So closed system = high profit and more resources to innovate, and this is the approach that Apple has (mostly) pursued throughout its history. This may offend your egalitarian sensibilities, but it has an upside: you pay more, but you're more productive because you spend less time dealing with the bugs that inevitably arise when trying to support thousands of different possible hardware configurations. This is the main point Kos was trying to make, and it's not a matter of ideology.
Christensen's ideas would lead to a prediction that as the iPad's market matures, we should see competitive lower-priced devices from other companies, assembled out of off-the-shelf modular components. But I don't think this is quite right, for one reason: packaging. It's easy to stuff generic CPUs, hard drives, RAM etc. into a big PC "tower" case, but not so easy in a device as incredibly slim and integrated as an iPad. The whole thing pretty much has to be designed, engineered, and manufactured as a unit. This makes truly modular design difficult or impossible (note that Apple actually designed their own processor chip for the iPad, which reportedly is what makes it operate so smoothly and with such amazing battery life).
On a somewhat related note, let me discuss for a minute Apple's ongoing feud with Adobe over Flash. At first I thought this must have been due to some personal animus of Jobs', but here are a couple of articles that explain the situation well:
Daring Fireball
Macworld
And with that, let the flames begin!