What is the War Between Apple and Android Really About?
With its new iOS updates and strident public announcements, Apple is waving the personal privacy flag. Cupertino is waging war against Facebook, Android, and what Tim Cook calls “the Data Industrial Complex.”?
“As I've said before," Cook says, "if we accept as normal and unavoidable that everything in our lives can be aggregated and sold, then we lose so much more than data...We lose the freedom to be human."
I think he has a valid point, but I don’t think this fight is just about personal privacy. Apple is motivated by its own self-interest, just like any other company. I actually think this debate is about competing business models. I think it’s about subscriptions versus advertising.
When you study the history of Apple, its path was decided long ago, when it decided to orient its business around squarely around customers, as opposed to its shiny new technology. When Steve Jobs introduced the first Macintosh, it bore a simple greeting: Hello.
The message was clear. This was a personal computer, intended to make your life easier and to help you achieve your goals. Here’s what Jobs said in 1980: “When we invented the personal computer, we created a new kind of bicycle...a new man-machine partnership...a new generation of entrepreneurs.”?
The Macintosh was at your service.??
Today, Apple continues to thrive as a service company. Their service revenue trails only their iPhone revenue, but when you really think about it, all of their products support a particular kind of seamless customer experience. Hence their embrace of simple, intuitive subscription services that are intended to make our lives easier and more enjoyable: music, news, applications.?
Google, of course, chose another path. They chose to orient the company around advertising. Heck, for the first decade of its existence, its customers had no identity at all!?If it wasn’t for Gmail, the company may have never introduced the concept of a Google ID. And Google’s subscription offerings? Nest? Paid Gmail? All died on the vine.?
As Scott Galloway noted in a recent New York article called Why Subscriptions May Be the Wave of the Future, “Look, the whole world is digressing to two business constructs. And it’s either iOS, where you pay a premium and you get more privacy, a more elegant solution, kind of the premium — or it’s going to Android, where you get essentially the product for free, and they figure out a way to monetize you as a user. And by the way, the majority of the world picks Android.”?
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He’s right, of course. Right now the advertising model has the numbers. But as the public becomes more aware of the real consequences of a business model that runs on hype and slot-machine psychology, and as companies wake up to the fact that customers are more important than products, I think subscriptions are going to win.?
Why? Because when you orient your company around customers as opposed to products, certain decisions are easy. For example, in response to the question, “Should I track my customer’s personal information, and then sell that information to advertisers?” The answer is no. Especially when your customers don’t want you to! After all, they’re the ones giving you the money, right??
The Subscription Economy benefits from the clarity of the Golden Rule. You don’t do things to your customers that you wouldn’t like done to you. Respect for data privacy is intrinsic to this model, because it’s all about developing and maintaining trust.?
Unfortunately, the majority of the digital economy lacks this moral clarity. As has been widely noted, for companies like Facebook and Google, the advertisers are the customers, and we are the product. We exist to generate personal data that can be packaged and monetized.?
“Subscription, whether it’s the move to Netflix, whether it’s the move to LinkedIn — more and more people like the idea of saying, ‘I don’t want my data molested. I want more privacy. I want a business model that focuses on the relationship with me’” continues Galloway.?“And the smartest people aren’t pitching advertisers, they’re pitching new product ideas that enhance my relationship and make it worthwhile for me to spend $12.”
I couldn’t agree more. Folks are waking up to a simple fact that we’ve known about for some time here at Zuora: when we talk about the privacy debate, we’re really talking about subscriptions versus advertising.?
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Disclosure: These opinions expressed are mine, not those of the company. The companies mentioned in this newsletter are not necessarily Zuora customers.?
Senior Rheumatologist at Premier Rheumatology of Alabama
3 年Two points I would offer, Tien. First, the key is value. Second, there ain't no such thing as a free lunch (TANSTAAFL - Robert Heinlein: "...anything free costs twice as much in long run or turns out worthless"). So you decide that a subscription has value that you will pay for, and the salesman may help persuade you, or you "sell yourself for cheap" and pay in a non-transparent way through the ad-track pathway, right? If only we could see the true cost of non-transparent ad-tracking and data mining. If you would like an exercise in non-transparency, try to figure out your last hospital bill. You will have no clue what is what, and the "system" has just collected valuable data that is fed into actuarial AI models to project the next increase in your health insurance premiums. What a deal, right?!
C-Level Executive ? Commercial - Sales - Operations - Project Management - Customer Success ? Water - Waste - Oil & Gas - Chemical Management ? Helping to grow sustainable enterprises & cities?? Circular Economy .
3 年Thanks for sharing.
East Los Angeles Collage
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Coaching Communication-and-Language Fitness (CLF) + Performance enhancing AI ??+??=? | Writer | Applied Linguistics Researcher
3 年Clear and balanced exposition of the 2 main IT business models. The subscription model sounds truly attractive for both businesses and customers: the business is loyal to the customer and respectful of his privacy, which in turn garners trust and therefore loyalty from the customer. I appreciate the value of this model but as an entrepreneur and customer the reality of the subscription model to me is "death by a 1000 cuts". If many more businesses take the route of the subscription model, customers who are already paying for so many subscriptions will be reluctant to pay for another. As an entrepreneur, this is my worry if I adopt a subscription model. Will there not be a market saturation of subscriptions that lead to diminishing returns for businesses as more businesses become saas~like?