(Source: http://ic2010.wahyan.com/guests) Seemingly out of nowhere, Netgear’s CEO Patrick Lo unleashed a pointed attack on Apple at a lunch earlier today in Sydney Australia, as reported by an article in The Sydney Morning Herald.  He certainly didn’t spare Steve Jobs any criticism due to his medical leave, as noted in his quotes below: “Steve Jobs wants […]
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Will Netgear’s Patrick Lo Heed His Own Advice?

Jan 31st 2011 by

(Source: http://ic2010.wahyan.com/guests)

Seemingly out of nowhere, Netgear’s CEO Patrick Lo unleashed a pointed attack on Apple at a lunch earlier today in Sydney Australia, as reported by an article in The Sydney Morning Herald.  He certainly didn’t spare Steve Jobs any criticism due to his medical leave, as noted in his quotes below:

“Steve Jobs wants to suffocate the distribution so even though he doesn’t own the content he could basically demand a ransom.”

and

“What’s the reason for him to trash Flash? There’s no reason other than ego”

When asked if he had mentioned any of his issues with Apple’s business model and practices to Steve Jobs, Lo responded with:

“Steve Jobs doesn’t give me a minute!”

Wow. Jealous? Bitter? I’m not sure, but Mr Lo obviously sound like he has an ax to grind here.

Mr Lo also made a comment on Apple’s future while he was at it:

“Once Steve Jobs goes away, which is probably not far away, then Apple will have to make a strategic decision on whether to open up the platform.”

Plenty of people have made comments of varying severity about Steve Jobs’ ego over the years, and it’s hard to dispute them. I have certainly shaken my head a few of his comments. He definitely has a healthy ego. Whatever you think of the man, though, that ego seems to be an essential part of what makes him a great leader and CEO.

While I am simply puzzled and shake my head at the CEO of a company that doesn’t compete with Apple, and in fact probably benefits from their existence, picking a fight with them to get his name in the news, this last comment is absolutely unprofessional. Mr Lo may have meant nothing by it, but he isn’t stupid. Anyone that keeps up with the tech world, much less a CEO of a large tech company, would know about Steve Jobs’ recent medical leave of absence from Apple. To make a comment about him “going away” in the wake of that knowledge is in extremely poor taste and demonstrates an absolute lack of class.

Class and good taste aside, Much of Patrick Lo’s criticism of Apple at this lunch in Sydney centered on the extremely worn and tired argument that Apple’s iOS ecosystem is closed, and will inherently lose to Android because it is more open. He cites several examples from the past, including the Windows vs Mac personal computing battle, of the more open platform eventually winning the day. What I think Mr Lo fails to realize is that, his examples don’t really apply to what Apple is doing.

VHS and TCP/IP, which were other examples that Lo cited, are open or cross-platform standards. They aren’t software. They aren’t OSs. They are standards. Someone has to make software that implements them. There is plenty of evidence that open standards have an advantage, and usually win broader adoption. However, that doesn’t necessarily hold true in the world of software. Sure there is plenty of GPL-compliant open source software out there in the marketplace. However, other than some notable successes such as Mozilla Firefox and Linux, show me where open source software dominates entire market segments. The larger and more complex the software, the more this rule applies. People will pay to have something that works. People will pay for good support. People will pay for consistent and easy to use interface. People will pay for seamless experience and great design. If Apple’s recent success has proven anything, it is that these principles are true. These are the reasons that Apple’s iOS ecosystem, based on iTunes and the App Store, works. Apple has embraced many open and cross-platform standards, such as MP3, AAC,  MPEG-4, H.264, and HTML 5, but they have built them into a content distribution system that is closed for the purposes of monetization. I am curious to know how this is different than what other companies that make tech products are doing?

Before anyone starts banging the Android drum on me, how about all those other app Markets floating around out there? You know, the ones that any manufacturer, reseller, content distributor, or carrier can make, slap on their Android device, and put exclusive content in that you can’t get anywhere else. How about custom skins and carrier crapware? Google may be open with Android, but according to their Apache licensing, they are allowing manufacturers and carriers to make closed systems and customizations on top of their open system. How is what these other companies doing so different than Apple? These competitors may not have as wide a distribution channel or as many content deals yet, but the same principles are at work in what they are doing.

What really kills me is Patrick Lo using Microsoft and Windows as an example of openness? Really??? Wow. I do understand where he is trying to go with his argument. It’s just way too simplistic, and ultimately breaks down. Microsoft won the personal computing OS war because they allowed their OS to be licensed by many manufacturers, while Apple tried to control every facet of manufacturing and distribution of their Mac platform. I get that. However, I would pose that it wasn’t simply Apple’s closed system that hurt them so badly. Everything at that time in computing centered on business sales, as the Internet was not yet available to consumers, and computer prices were still prohibitive.

Admittedly, Microsoft did a much better job than Apple of catering to software developers, especially in the area of business software. The availability of cheaper hardware and more software really hamstrung Apple. They didn’t innovate and adapt fast enough, and they paid a heavy price for it. I would also argue that Apple suffered from some very poor management through a very critical period of time in their competition with Microsoft, which almost forced them out of business. In other words, it isn’t as simple as Mr Lo wants to make it out to be. Apple didn’t lose the OS war just because they had a closed ecosystem. There were other factors in play.

As proof of my point, you can look at the desktop computing market of today as an example. If Apple’s closed ecosystem was as detrimental as Mr Lo seems to believe, then Apple would no longer be in the business of making Macs. In reality, under the leadership of Steve Jobs, the much more streamlined and focused Apple desktop and laptop product lines have climbed from a little over 2% of the market in 2003 to 10.6% in 2010. Apple has recaptured lost market share in large part because of their closed system, which has allowed for greater quality control from end to end, and a more seamless experience between their various products. People that adopt the Mac platform are doing so at a higher price, but they are doing it because they often feel they are getting more for their money in return.

Microsoft, on the other hand, has suffered greatly from the opposite effect. By trying to maintain legacy compatibility in the face of a huge and fragmented ecosystem, the Windows code base became increasingly less stable and secure through the 90s and early 2000s. Merging the consumer and business OSs and cleaning up that code to an acceptable level of performance and security has taken them years, and had slowed down their pace of their innovation greatly. Microsoft used to bring out new OS versions every 2-3 years. Now that pace has slowed to a crawl. With the release of Windows 7, Microsoft got closer to Mac OS X in terms of interface advancement, security, and stability, but many years later and with a lot of pain in the process. In other words, there are plenty of issues inherent to “openess,” (as far as that term can actually be applied to Windows) and Microsoft seemed to experience all of them over the past ten years.

Before anyone misconstrues my statements on Microsoft and Apple, I am not in any way comparing Microsoft to Google. Google’s approach is to get their software into the hands of many manufacturers of many types of devices, which is similar to what Microsoft did. However, they are using far different methods than Microsoft did to accomplish this. Google is freely distributing the software, which isn’t an issue for them. Their business isn’t sales. It’s ads and services, and the OS is just a vehicle to deliver them. I’m not saying that Google won’t run into problems with fragmentation like Microsoft did, as time goes on. However, they seem to have vastly superior management and corporate vision to what Microsoft demonstrated throughout the 90s and early 2000s.

In my opinion, the Apple vs Google battle is different than anything else we’ve ever seen. There have been numerous battles between standards, OSs, hardare, search engines, and so on. Each of these battles was in many ways, insulates from all of the others. If Apple and Google are to be compared to anything, it should be big media or cell phones. These are larger companies with not just hardware and software offerings, but an array of service and content deals that span many markets worldwide. That’s what ultimately makes this battle different from all of the examples that Mr Lo cited. Apple and Google aren’t going head to head in one arena, but in several, and the battle is only going to get bigger. Music, TV, Movies, Books, Apps, Phones, Tablets, Carrier Adoption, Ads. All of these are on the table. How can you compare the lone battle of video tape standards between BetaMax and VHS to this? The two are worlds apart.

After reading all of Mr Lo’s comments today, I am curious about something. I wonder how much he really believes in openness, at least his interpretation of it, in his own corporation? Like Apple, his Netgear products make use of open standards. Also, like Apple, they are packaged in proprietary hardware with software added for customer interface. What kind of interface and firmware do Netgear routers use? Will Netgear’s products always work seamlessly with their competitor’s networking gear? Hmmm… In light of Mr Lo’s opinions, I wonder when Netgear will be releasing a new router with DD-WRT’ open source firmware pre-installed from the factory, instead of their proprietary interface? Wouldn’t that be embracing true openness, rather than doing the exact same thing that Apple is doing, only not as successfully? Maybe if his opinions on openness are correct, Netgear would ultimately take over and dominate the networking market. If not, at least they would make life easier for hackers everywhere. I wouldn’t hold my breath for that product announcement if I were you, though.

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