The Meta-Apple Battle: A 10-Year Phone Upgrade Cycle?
- The current battle between Meta (Facebook) and Apple may lead to another 10-year phone upgrade cycle, giving Apple an advantage as long as the mobile battle continues 10s.
- The battle between Meta and Apple can be broken down into three fights: the web era, the mobile era, and a new battle that is brewing 37s.
Three Eras of the Meta-Apple Battle
- During the web era (2000-2009), the main way to launch and grow a product was to build a website and use viral email spam mechanisms to get people to sign up 1m22s.
- The browser was the platform during the web era, and it was neutral territory, allowing app developers to be happy and successful without having to get users to install desktop software 1m44s.
- The web era was also the time when Steve Jobs returned to Apple, and the company was getting its groove back with the release of the first iMacs and Apple notebook computers 2m45s.
- At that time, Apple was still seen as a struggling company, and there was a point when it was almost out of money, prompting Microsoft to invest in the company 3m10s.
- Facebook was the dominant application during the web era, and it won the first battle between Facebook and Apple, with Apple not being seen as a major player at the time 3m51s.
- Before iCloud, Apple built various web products in the 2000s, which were considered great, but not as successful as their current products 4m1s.
- Facebook played a dual role as an application developer and a platform provider, allowing other companies to build on their platform, with notable successes including Zynga, Farmville, Spotify, and Pinterest 4m13s.
- However, Facebook's platform ambitions were not entirely successful, and the company was torn between allowing developers to build competing products and leveraging their platform for increased activity 5m13s.
- Microsoft was considered a better platform provider than Facebook, given their longer experience and expertise 5m51s.
The Web Era (2000-2009): Facebook's Dominance
- During the web era (2000-2009), the main way to launch and grow a product was to build a website and use viral email spam mechanisms to get people to sign up 1m22s.
- The browser was the platform during the web era, and it was neutral territory, allowing app developers to be happy and successful without having to get users to install desktop software 1m44s.
- The web era was also the time when Steve Jobs returned to Apple, and the company was getting its groove back with the release of the first iMacs and Apple notebook computers 2m45s.
- At that time, Apple was still seen as a struggling company, and there was a point when it was almost out of money, prompting Microsoft to invest in the company 3m10s.
- Facebook was the dominant application during the web era, and it won the first battle between Facebook and Apple, with Apple not being seen as a major player at the time 3m51s.
- Before iCloud, Apple built various web products in the 2000s, which were considered great, but not as successful as their current products 4m1s.
- Facebook played a dual role as an application developer and a platform provider, allowing other companies to build on their platform, with notable successes including Zynga, Farmville, Spotify, and Pinterest 4m13s.
- However, Facebook's platform ambitions were not entirely successful, and the company was torn between allowing developers to build competing products and leveraging their platform for increased activity 5m13s.
- Microsoft was considered a better platform provider than Facebook, given their longer experience and expertise 5m51s.
The Mobile Era: Apple's App Store Triumph
- The mobile battle was won by Apple, with the App Store becoming a crucial component of the iPhone's success 6m13s.
- Before the iPhone, smartphones existed, but their app ecosystems were limited, with users having to sideload Java bundles or install jar files to run programs 6m24s.
- Companies like Sam Altman's startup, Loopt, were building smartphone applications pre-iPhone, but these were not as sophisticated as modern apps 6m47s.
- The iPhone initially had a limited app ecosystem, with the device maker expected to provide most of the software, but this changed quickly with the launch of the App Store 7m7s.
- The App Store was not available at the iPhone's launch, and it took some time for it to be introduced, with Steve Jobs reportedly stating that there were very few third-party apps initially 7m31s.
- The story behind Apple's decision to create an app store is that Steve Jobs was initially reluctant, but was convinced by the argument that there are only so many engineers that will ever work at Apple, and they wouldn't be able to build all the apps that could make the iPhone more valuable, so they opened it up to developers to build features and share revenue 7m46s.
- Apple's approach to the app store was to view the phone as their platform, and developers as renters who could build features and share revenue if they followed Apple's rules, which is where the "Apple tax" comes from 8m21s.
- As an app developer, there were limitations on what could be done with the phone, and third-party developers weren't allowed to do certain things 8m56s.
- Facebook was late to the mobile game and had to acquire companies like Instagram and WhatsApp to catch up, which were tiny teams that leveraged the Apple platform to achieve massive scale 9m42s.
- WhatsApp and Instagram were able to achieve huge success with small teams, with WhatsApp doing more telephony than AT&T despite having only 100 employees, compared to AT&T's 250,000 employees 10m13s.
- Facebook was able to acquire its way into mobile through acquisitions like Instagram and WhatsApp, but such acquisitions would likely be blocked today 10m35s.
The Maturing Mobile Market and the Rise of AI
- The mobile landscape has changed, and the incentive to upgrade iPhones every year or two has decreased, with the iPhone X being a peak excitement point for many users 10m47s.
- The iPhone's evolution is discussed, from the introduction of 3G in the second iPhone to the addition of video recording capabilities and improvements in battery life, camera quality, and resilience, with notable upgrades including the transition from one to multiple cameras and lenses 11m18s.
- The current state of the mobile market is described, with the App Store feeling "pretty mature" and the phones being "very mature," suggesting that the mobile battle may be coming to an end 13m1s.
- The number one app in the App Store is currently ChatGPT, which can run on old phones, indicating that users don't need the latest devices to access valuable apps 12m12s.
- The relationship between Apple and ChatGPT is discussed, with the possibility that ChatGPT's parent company, OpenAI, is paying Apple a significant amount of money via subscription fees 13m10s.
- Facebook's response to the mobile world is analyzed, with the company investing in AI, open-source AI, and new platforms, such as glasses, in an effort to learn from past mistakes and own the platform 14m11s.
- The battle lines in AI are discussed, with Facebook being the most open company and making significant contributions to advancing open-source AI 14m47s.
- Meta and Apple are both involved in open source AI, but they seem to be taking a neutral stance on this front, while competing in other areas such as augmented reality glasses and virtual reality headsets 15m1s.
- Apple's strategy appears to be about maintaining the status quo, continuing to collect revenue from existing products, and potentially integrating AI technology like ChatGPT into Siri 15m35s.
- Apple may be trying to use AI as a reason to extend the 10-year phone upgrade cycle, as the company benefits from the ongoing mobile battle 15m52s.
- The Apple VR headset may not have been a successful platform attempt in its first generation, but future revisions are expected to improve its performance 16m13s.
- Startups can use the environments created by larger companies like Meta and Apple to their advantage, potentially beating them head-to-head 17m1s.
- The bar for consumer products is higher than it once was, requiring more polish and distribution to compete with addictive platforms like TikTok and YouTube 17m20s.
- To succeed, startups need to create products that are more interesting, compelling, or useful than existing platforms, which are constantly evolving to be more addictive 18m19s.
- While platforms like TikTok and YouTube are entertaining, it's unclear whether they are truly innovating, and startups may be able to find opportunities in this space 18m28s.
AI's Potential to Disrupt the Status Quo
- The current state of technology doesn't feel as magical as when smartphones were first introduced, and it seems like winning is about serving the most addictive content rather than innovating 18m35s.
- AI tools have the potential to provide a more personalized and one-on-one experience, which is the opposite of the web, where everyone had the same experience 19m24s.
- AI agents can navigate phone menus, get a human on the phone, and have a conversation without the human realizing they're talking to AI, which is a potential game-changer 19m9s.
- Voice, email, and SMS are platforms that AI companies are doing well on, and these platforms are more open than the App Store or Facebook platform 20m11s.
- The new features in iOS, such as RCS features and Rich messaging, add more features to be cross-compatible with Android, and smart founders should look for under-exploited features to use 20m48s.
- AI companies are doing well on platforms with a huge install base that works globally, such as SMS, voice, and email, and it's recommended to focus on these platforms rather than closed or distribution-limited ones 21m15s.
- The current state of the tech industry is compared to the pre-iPhone world, where it was unclear who the winner would be, and it's unclear if we're at a moment where it's obvious who the winner is or if the analogy breaks down 22m5s.
- The battle between Meta and Apple is still in its early stages, and it's unclear who will come out on top, with the possibility that a larger company like Microsoft or Google could popularize the technology and change the game 22m18s.
- The current situation is likened to the Netscape era, where a company popularizes a new technology, only to be overtaken by a larger player, and it's possible that Apple could bundle AI features into iOS and iCloud, making it difficult for others to compete 22m30s.
- Many large and powerful players, including Google, Microsoft, Amazon, and Apple, are now involved in the AI game, but their incentive to work together is low 23m7s.
- The current time is interesting for AI startups, as the landscape is changing rapidly, and understanding the past can help inform strategies for the future 23m40s.
- The newest AI tools seem able to exploit open platforms, and the big companies seem unable to completely regulate them, potentially creating opportunities for startups 23m49s.
- The involvement of many large players in the AI game means that the situation is complex and rapidly evolving, making it challenging to predict what will happen next 23m10s.
