Open vs. Closed: the iPhone’s Future or Folly?

iPhones and ChinaSteve Jobs is a genius of design and marketing, but his track record on calling the right balance between utilizing proprietary arts and public resources (like open source and open standards) is more questionable.  Two news items caught my eye today that illustrate the delicacy of making choices involving openness for the iPhone platform - both geopolitically as well as technically.

The first item can be found in today's issue of the London Sunday Times, and the second appears at the Web site.  The intersecting points of the two articles are the iPhone and, less obviously, openness.  But the types of openness at issue in the two articles are at once both different, and strangely similar.

The Sunday Times piece recounts the (unsuccessful) efforts of Andre Torrez, the chief technology officer at Federated Media in San Francisco, to switch from the iPhone to an Android-based G1 handset, because he objects to the closed environment that the iPhone represents.  But after just a week, Torrez reverts to the better app-provisioned iPhone.  The Sunday Times author concludes in part as follows:

It is almost two years since Google launched Android but so far it has disappointed. After the initial hype, Harry Wang, analyst at Parks Associates, said he was surprised by how slow the rise of the software had been. “After the G1 was introduced I expected more products to arrive featuring Android. The pace is so slow,” he said….

So far those phones have failed to materialise and the iPhone’s popularity has convinced developers to set aside their open source preferences to work on applications for Apple. As for consumers: “They care about the experience,” said Wang. “So far Android hasn’t offered much in that regard.”…

Wang said there was still a lot of ground left for Android-powered phones. At the end of 2007 there were 35m smartphones in America. Parks Associates reckons that number will be closer to 90m by the end of 2009. Wang said Google was a formidable competitor and had signed up impressive partners. But Google has a lot of work to do convincing even Apple’s least happy customers that it’s time to join the Androids.

Dominic Rushe, the author, comes very close to getting it right towards the end there – but then misses the real point entirely.  That is the fact that the early market leader often ends up falling by the wayside, as the technology world has so often seen in the past (think of Amiga, Commodore, WordPerfect, Netscape – the list goes on).  I hardly expect to see the iPhone replicate the bellcurve of Apple’s early computer sales, but the point is that marketing execution often trumps technical and design talent.  Microsoft trumped Apple not by creating a better operating system, but by making it’s OS a default standard for hardware and software vendors – open enough to bump Apple, but closed enough for Bill Gates to control.  

To put a finer point on it, the question isn’t whether Motorola and other Android adopters can woo iPhone owners away from Apple, since their numbers are still very small relative to all cellphone users – just as the number of Navigator users was tiny, when Netscape was the dominant browser company, compared to those that did not yet use a browser. 

No, the real test for Apple will be whether the 55 million customers that are expected to buy their first smartphone between now and the end of this year will buy an iPhone, or one based on an open source platform such as the Android platform launched by Google, or the Moblin OS initiated by Intel).  After the early adopters (i.e., those who probably already own an iPhone), that has a lot more to do with marketing, partnerships and handset discounts than with which platform has the most apps.  If the answer is Android or Moblin, then the apps will follow, and Steve Jobs will have called the closed system long term coin toss wrong once again.  On that topic, see my analysis from a year and a half ago, titled Steve Jobs’ Endangered Second Act.

The second article I noted also touches on a topic from the past, this time involving wireless standards, although most of the articles I’ve read so far on this story touch on the standards aspect only in passing.  The central point of the article is the long-rumored announcement that Apple has found an iPhone distributor in China – perhaps one that may even have placed an initial order of 5 million units.  That’s undeniably big news for Apple and its stockholders.

But what exactly will Chinese users (and their government) be able to do with their iPhones?  That’s where the standards angle comes in, and the standards in question are the well-known WiFi standard, and the lesser known, Chinese, home-grown WAPI standard (WAPI stands for “wireless authentication and privacy infrastructure).

Five years ago, a face off between WiFi and WAPI was a hot story.  At the time, the question seemed to be whether China was using the weak security features (then) of WiFi as an excuse to favor its home-grown standard.  China had decreed that after a certain date, only WAPI-enabled laptops and other mobile devices could be sold in China.  Moreover, only certain Chinese companies would be licensed to provide that technology.  This time around, it would be the western companies that would have to pay the big patent licensing fees to sell products in China, rather than Chinese companies having to pay big fees to sell Chinese-built and branded products for sale in the West.

Texas Instruments and some other western chip vendors cried foul, and ultimately it took the intervention of Colin Powell to get the Chinese to back down.  The Chinese have been simmering (and sometimes more) ever since, especially after the IEEE turned down a Chinese request to approve the WAPI standard as well as WiFi.  Periodically, China has escalated its support for WAPI.

More recently, it has seemed that in fact there was some substance to the Chinese concern over wireless security features, not only as a result of the procurement decisions that the Chinese government has recently been making,  but also due to the “Green Dam” Internet filtering software that the Chinese have recently sought to require be installed on computers (after a storm of protest, the filters will now only be required on school computers).

So what does all of this have to do with Apple and the iPhone?  As you may have already guessed, the question revolves around whether the iPhones that Apple sells to China will have their WiFi features enabled (which would make it hard for the government to monitor what someone is using their iPhone to access on line) or disabled, and whether they will be required to have WAPI added to them following delivery (which would allow the government to more easily monitor who is doing what using their iPhone).

The conclusion that most articles that I have read come to is that WiFi will be disabled, and that WAPI will be added.  The MacWorld article, by Richard Adhikari, for example, reads in part as follows: 

All iPhones legally sold in China must exclude their WiFi feature by Chinese law. That’s probably because it’s more difficult to track Internet users accessing the Web over WiFi, speculated Carl Howe, director of anywhere consumer research at Yankee Group….

The iPhone’s WiFi feature will likely be deactivated, but it probably won’t be removed, Allen Nogee, principal analyst for wireless technology and infrastructure at In-Stat, told MacNewsWorld.

That could be because China might want to promote its own technology. “China has its own WiFi standard called ‘WAPI,’ which could be enabled by China Unicom with a software upgrade,” Nogee said.

As the MacWorld article notes, the WiFi ban won’t be unique to iPhones.  All other major cellphone vendors are actively selling into China, and they will be subject to the same rules.  But unlike Android (and Moblin) based handsets, the iPhone architecture will enable Unicom, the Chinese company, to stand in for Apple in running the App Store that will control what Chinese customers can and can’t use on their iPhones.  And Unicom is a government-licensed and majority-owned telecom provider.

A smartphone based on an open source platform clearly offers more opportunities for creativity, extension and (in China) hacking to get around government-imposed technical requirements.  The two articles thus nicely make the point that openness is a matter of degree, and also illustrate the fact that the slope is slippery indeed between totalitarian requirements and proprietary decisions over what can, and cannot be done with as important an information, communication, and creation device as a modern smartphone.

It will be interesting indeed to see whether on a world wide basis Android, Moblin and other Linux-based, open source based mobile platforms lure more customers and developers in the long term, now that Apple and the iPhone have done such a splendid job demonstrating how valuable a smart phone can be. 

And in China, it will also be interesting to see whether savvy users opt for a platform that gives them the most freedom, or one where what they can buy is controlled a government that places the highest priority on maintaining a “harmonious society.”

For further blog entries on Open Standards and Open Source click here

sign up for a free subscription to Standards Today today!