No technology product can exist in a vacuum. Even the most valuable tech company on the planet must trust its partners, particularly when it comes to parts supply, manufacturing, Internet services, and end-user service providers. But what to do when your partners become your competitors?
It’s happened with Apple and Google, Apple and Samsung, and it seems inevitable that it will happen again, for instance between Apple and Facebook, as well as any number of smaller partners. This forces companies to search out new alliances, often stepping on the toes of third-party developers.
As these alliances dissolve and reform, we'll use this story to track the potential partner changes that are need-to-know for Mac and iOS developers, or for web devs aiming at users who own Macs, iPhones, and iPads and using Safari.
Apple is a company that has exacting expectations, and they enforce those expectations on their partners. But that's given rise to a nickname some of its parts suppliers now have for the company: "Poison Apple." As Brad Reed reports for BGR:
Apple suppliers have started referring to the company as the “Poison Apple” due to its “hard-to-meet high standards and low price expectations.” Unnamed suppliers have also told Reuters that they’ve grown weary of Apple’s “ever-moving deadlines” and said they are now trying to “reduce their reliance on the company.” Given reports that several key Apple products are facing delays because they’re difficult to produce, it’s not surprising that there’s tension between the company and its suppliers, especially amid reports that several suppliers have taken hits to their earnings over the past quarter due to subpar iPhone demand.
Even though partners like Facebook, Google, and Samsung are, many of Apple's other partners — especially manufacturers in the Far East — are not. Still, just because you're a company writing big checks it doesn't mean you can push your partners around. As others' mobile phones and tablets grow in prominence and market share, companies besides Apple will have increasing power to write bigger checks and give as much business to Apple's partners as the iPhone maker can. This means it's possible in the future (all other things being equal) that a manufacturing partner with critical supplies could choose to forgo a partnership with Apple in favor of one with Samsung — all because they could be seen as being easier to deal with.
To see how important the right partners are in Silicon Valley, look no further than what happened with Apple, Amazon, and Goodreads. The bibliophile social networking site Googdreads recently sold to Amazon for a deal worth up to $200 million by some reports. The thing is, Apple was already in talks with Goodreads to use their data to power the iBookstore's ratings and reviews when Amazon (whether getting inside wind of the talks or completely unbeknownst to them) swept in and made Goodreads a deal — provided they cease all talks with possible partners.
Over the past year, Apple and Goodreads had begun discussing integrating Goodreads’ service, which allows users to share and rate what they are reading, into Apple’s iBookstore, which sells digital books, according to people familiar with the matter.
Goodreads had proposed its reviews and ratings appear within iTunes when users searched for a title, one of the people said. iTunes has already integrated Rotten Tomatoes movie ratings in such a way. Apple was entertaining the idea, but talks didn’t progress much, two of the people said.
Around March, Apple pinged Goodreads to move forward with the talks, these people said. iTunes officials were perplexed when Goodreads executives went quiet, two of the people said.
During that period, Goodreads had cozied up to Amazon, which expressed interest in buying the company. Amazon insisted Goodreads cease talking to others while a deal was done, the people said.
From a developer's prospecting the thwarting of an Apple/Goodreads partnership doesn't mean much (that is, unless you also happen to have a books review social media app — in which case you might want to give Apple a call) but it does underscore the the urgency at which partnerships are made or broken in today's tech world.
As for any developers who use the Goodreads APIs, you shouldn't be affected. That is, of course, unless the battle for ebook supremacy reaches insane lows and Amazon insists no Goodreads APIs are used on iOS devices — but that seems very unlikely…for now.
"Apple really needs to learn to partner." That's what Noam Bardin, CEO of social mapping company Waze said at D:Dive Into Mobile in New York City on Monday. He said the challenge of ecosystems like iOS and Android in the future would be to meet the high expectations of users — something giants like Apple, Google, and Facebook seem intent on doing so by their lonesome:
"We struggle with this every single day — will third-party apps have room in the future of ecosystems? There's a bigger question of what happens with mobile in general. Overall, there isn't much difference between a high-end Android and iOS phone, despite the fact that Android is a knockoff of iOS. Samsung and Apple seem to think that they're going to provide everything. Apple believes services will drive hardware, while Google wants to own each user regardless of hardware, so you have differing philosophies. Apple really needs to learn to partner. You can see that tight integration, as Facebook and Twitter now have with iOS, makes the overall user experience better for both the partner and for Apple."
But the importance of choosing the right partner never became so clear as it did after Apple broke up with Google and its mapping technology. Matter of fact, before the release of Apple's Maps in iOS 6, Bardin assumed that Apple Maps would be bad — but not for the iPhone maker. As Lance Ulanoff at Mashable reports:
Bardin said they knew Apple Maps was coming, and saw it as a "nightmare" for the Waze business. “We assumed Apple’s product wouldn’t be that good, but we thought it would be good enough for consumers,” he recalled.
But it wasn’t.
“What surprised us was that it came out and consumers were upset,” Bardin said.
This proved a turning point for the company.
That turning point lead Bardin to come to a realization, reports Darren Murph at Engadget:
He also made a point that we've been noticing ourselves. When riffing about the fallout from the iOS 6 Maps debacle (and the ensuing boost in users once Tim Cook name-checked Waze as a suitable alternative in his famed public apology), he stated: "Consumers now have a quality bar, and that bar is going up rapidly. Two years ago, Apple's Maps app on iOS 6 would've been a fine product."
But it's the high expectations of smartphone savvy users in 2013 that make Apple's partnerships so important. As Bardin noted, Apple's current mapping partners are a hindrance:
"Apple Maps are definitely getting better, but the challenge Apple has is that it's hostage to its vendors — and those vendors are weak these days. TomTom is challenged, whereas Google has an unlimited war chest to better its apps."
Bardin framed his thoughts in the context of a large company that provides similar services (maps) as Apple and Google. However, as any iOS developer who users maps in their apps knows, Apple's partner choices have far-reaching implications for developers big and small.
Want to read about developer reactions to iOS's new MapKit? Check out our side-by-side comparison between MapKit and Google Maps SDK for iOS.
Just because Google is no longer Apple's favorite partner, it doesn't mean the search giant is slowing down its design and engineering efforts on iOS. The Google Search app for iOS is one of the best-designed apps on the platform. It mixes an intuitive UI with strong underlying technologies (i.e, an incredibly reliable voice search system that puts Siri to shame) to create an amazing UX on iOS.
In one of the latest "Life at Google" videos, Interaction Designer Noah Levin and SVP of Knowledge at Google Alan Eustace talk about designing and coding for the best UX possible:
Alan Eustace: We think about the user first. And when you think about the user, you have to look at all the little intricate details about how they interact with your product. And user experience and user research is a fantastic way to understand how our users use our products. And their skills are how to build what is a complex system into a simple user experience.
Noah Levin: So we spent a lot of time iterating on different designs, because we really needed to start building it and changing it over time and testing it to know that it was good. When you hit a link, a lot of times, you want to go back very quickly, back and forth to explore these results. So I came up with this tabbed UI where once you click a result, a tab slides out, and you can scan through it and say, maybe that's not what I want and instantly swipe it away or tap it away and look at other results.
Perhaps no other Apple partner has become a bigger competitor than Samsung, but even as they rely on the company for parts Apple could be actively building up a future power player in TSMC. Samsung has provided parts for Apple’s Macs and iOS devices for years. These parts include displays and the all-important A-series Apple chips used in iOS devices. But over the last four years Samsung has gone from another “me-to” smartphone maker to Apple’s dominant rival. Lawsuits proliferate between the two companies and it's not surprising that Apple wants to become less reliant for supplies from a company that is trying to take away its consumer business.
The Korea Times is reporting that Samsung has now been locked out of Apple’s next-generation A7 chips, which will likely show up in iOS devices in 2014. Instead Apple is reportedly moving production of the A7 to Taiwan Semiconductor Manufacturing Company. TSMC has fewer resources than Samsung, but with Apple's massive stockpile of cash to throw at any logistical problems the semiconductor manufacturer might face, it's likely any scaling barriers can be quickly overcome.
"Apple is sharing confidential data for its next A7 system-on-chip (SoC) with the Taiwan Semiconductor Manufacturing Company (TSMC). TSMC has begun ordering its contractors to supply equipment to produce Apple's next processors using a finer 20-nanometer level processing technology," said an executive at one of Samsung's local partners in Korea by telephone, Wednesday.
"Apple is cutting the use of Samsung displays for its products. Now the deterioration of ties has expanded to chips. You should remember that the application business is one of Samsung’s new growth engines in which the firm is heavily investing,’’ said an official of another top-tier parts supplier to the Korean company.
Any SoC foundry changes shouldn't necessarily affect developers—if Apple stays with ARM. But as discussed below, if TSMC can't produce the output Apple needs, the iPhone maker might need to hop to Intel for its ARM chips—and go with an Intel x86 SoC for the iPad.
Apple & Yahoo—Unlikely Bedfellows? Yahoo is in desperate need of a turnaround, and Marissa Mayer knows it. Could Apple be the partner of choice to revive its fortunes? It may feel as if Yahoo is playing second fiddle to Google, Microsoft, and Facebook, but they remain a giant of the web. Yahoo Finance is still the most popular financial site on the web, its sports sites are immensely popular, and a significant percentage of all search traffic runs through Yahoo’s servers.
But what’s in it for Apple? The Wall Street Journal reports that negotiations are in the early stages, but Apple is interested in having Yahoo provide more services to iOS. Currently Yahoo provides weather, stock, news, and sports data. Could a search deal be in the works?
Data from Yahoo Finance and its weather site already come preloaded onto iPhones and Yahoo data like sports stats help power Apple's voice-activated "assistant" Siri. But the companies continue to discuss new arrangements, including possible deals to get more content from Yahoo Sports and Yahoo News, among other Yahoo Web properties, preloaded onto Apple devices or available through an expanded partnership with Siri, one of these people said.
Yahoo also has contemplated ways it could provide Web-search results to Apple, so that Apple could rely less on Google Inc. But the idea is still a long shot because of Yahoo's partnership with Microsoft Corp., which powers Yahoo's search service, and Apple's deal to use Google's Web-search service as the default in the iPhone and iPad web browser.
Apple, meanwhile, has been looking to partner with companies to help reduce its reliance on Google's mobile services. Apple's desire to extract itself from Google runs deep. Apple, which last year ended partnerships with Google over maps and video, has explored breaking up on search for many years and its representatives recently met with companies that have search expertise, people familiar with the matter said.
Even if it won’t admit it publicly, Samsung is being handed its hat at the door as Apple welcomes new suppliers. Though Samsung is a giant in Apple’s supply chain, the Cupertino company actually has many, many more. Matter of fact, they have 748 separate suppliers as of February 2013, reports ChinaFile:
The Cupertino-based firm has been publishing annual supplier responsibility reports annually for the past seven years. But this is only the second time that Apple has released detailed addresses of their suppliers. Apple first revealed a list of its top suppliers in 2012, when it also joined the Fair Labor Association, allowing independent audits of the company’s suppliers.
Neither China watchers nor Apple watchers will be particularly surprised to note that the vast majority of Apple suppliers happen to be in Asia. In fact, out of the 748 listed, more than 600 are in Asia. Of these, 331 suppliers are in mainland China.
From a software developer’s perspective, changes in Apple’s suppliers shouldn’t affect coding in any way. That is, of course, unless Apple decides to jump ship to Intel as its new SoC foundry. As Sebastian Anthony writes for ExtremeTech:
If an industry analyst is to be believed, Apple may soon move the production of its ARM processors from Samsung to Intel. This dovetails neatly with the news earlier in the year that Intel was moving into the foundry business — but it isn’t quite that simple: The same analyst says that, as part of the deal, Apple will have to transition its iPads away from ARM to an Intel x86 SoC.
If Apple did do this—and that’s a big IF—it would mean that iOS developers would need to develop for two different architectures. Something Anthony thinks Apple would only do if it had no other choice:
It certainly makes sense from Intel’s perspective, which is desperately trying to break into the mobile market — now with Clover Trail, which is fairly exciting, and next year with Bay Trail, which will probably blow the doors off everything else on the market. I’m not sure if I can picture Apple splitting its iOS platform into two different architectures, though, just to get into bed with Intel. Maybe that’s the only option, though, if Apple really wants to drop Samsung and TSMC doesn’t have the capacity.
"Co-opetition" is a term used in the tech world that describes companies' inter-dependance on each other even when they are fighting for the same customers in the marketplace. Writing about the Facebook Home announcement, Brandon Bailey and Troy Wolverton of the Mercury News suggest that despite Facebook’s praise of Google’s Android as an open layer to build its OS on, the two companies are headed the same direction of Apple’s relationship with Google:
Still, the two companies' relationship increasingly resembles Apple's competition with Google. Those two tech giants were once close partners, and Apple's decision to feature Google programs for navigation, watching videos and searching the Internet helped make the early iPhones and iPads a success.
But after Google's Android emerged as a major force in the mobile gadget world, Apple replaced Google Maps with its own navigation app. Apple also built the voice-activated Siri, which competes with Google's search engine. Google began selling music and other digital entertainment, in competition with Apple's iTunes store.
While one might think that an increase in competition between Facebook and Google would be a good thing for Apple—after all, “the enemy of my enemy is my friend”—what happens when all three giants have their fingers dipped in the smartphone pond? When they all have a smartphone OS, smartphone handsets, and their own app ecosystems, it’s not hard to come to the conclusion that it’s the users and app developers that will suffer.
If Facebook, Google, and Apple one day build their walled gardens high enough, it’s conceivable that access to the competition’s services might be cut off entirely. Could the day come when a developer who wants to use Facebook’s data or API have no choice to do so on Android or iOS and thus be forced to divert its resources to a third platform?
[Apples And Oranges: Anelina via Shuttertstock]