About Jean-Louis Gassée

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Posts by Jean-Louis Gassée:

The iPad Is a Tease

 

As Apple is about to release its latest quarterly numbers, new questions arise about the iPad’s “anemic” growth. The answer is simple – but the remedies are not.

The iPad isn’t growing anymore. What happened? 

In anticipation of Apple’s latest quarterly numbers – they’ll be announced on April 23rd – the usual prerelease estimates swirl around the Web. You can find Yahoo’s summary of analysts’ estimates here; Paul Leitao’s Posts At Eventide provides a detailed and tightly reasoned history and forecast for the March 2014 quarter.

The consensus is that for the company as a whole, there won’t be any surprises: Apple will meet the guidance stated in its January 27th earnings call. Revenue will be down, as befits the quarter following the Christmas shopping frenzy, but profit per share (EPS) will be up a bit.

Boring. With one glaring exception:

Braeburn Group iPad Edited
(Source: The Braeburn Group)

In the same quarter for 2013, the iPad’s year-on-year growth was about 55%. Some of this phenomenal growth was due to a rebound from earlier iPad mini supply constraints, but that doesn’t explain the precipitous drop from 2013 to this year.

Are the iPad’s go-go years over?

As Philip Elmer-DeWitt reports on his Apple 2.0 site, this gloomy prediction appears to be the majority opinion among analysts. Elmer-DeWitt acknowledges that there are outliers — Horace Dediu comes in at the high end with an estimate of 21.8M units (and positive growth) — but “the consensus estimate of 19.3 million, would represent a 0.7% decline”.

It’s one thing for a product to increase in unit volume sales but still grow less than the overall market — that’s simply a loss of market share. And we know how fallacious share numbers can be in the absence of an honest disclosure of sales volumes. No, assuming the estimates are right, what we have here isn’t market share dilution, it isn’t a post-Christmas lull, it’s a year-to-year decline in absolute unit numbers.

Why?

I’ll offer an opinion: The iPad is a tease. Its meteoric debut raised expectations that it can’t currently meet.

To explain, let’s go back four years.

Steve Jobs’ last creation took us by surprise, price included, and was initially panned by many in the kommentariat, from Eric Schmidt to Dan Lyons (who subsequently recanted). But normal humans joyously took to the iPad. In 1984, one of Apple’s tag line for the Mac was “Macintosh – the computer for the rest of us.” Decades later, the iPad was quickly perceived as a sort of second coming. As MacWorld put it in June 2011: Now Apple’s really “for the rest of us”.

Indeed, the iPad wasn’t targeted at a particular type — or generation — of user. David Hockney has produced exquisite iPad “paintings”. Daniel Borel, Logitech’s co-founder, told me that his two-year old grandson immediately “got” the iPad (even if it was just to play games, but…he’s two). Coming out of our breakfast meeting, I crossed paths with a couple of seniors — octogenarians, probably — who proudly told me that they were going to an iPad training session at the Palo Alto Apple Store.

The iPad rose and rose. It won legions of admirers because of its simplicity: No windows (no pun), no file system, no cursor keys (memories of the first Mac). Liberated from these old-style personal computer ways, the iPad cannibalized PC sales and came to be perceived as the exemplar Post-PC device.

But that truly blissful simplicity exacts a high price. I recall my first-day disappointment when I went home and tried to write a Monday Note on my new iPad. It’s difficult — impossible, really — to create a real-life composite document, one that combines graphics, spreadsheet data, rich text from several sources and hyperlinks. For such tasks, the Rest of Us have to go back to our PCs and Macs.

I realize there are iPad users who happily perform “productivity tasks” on their iPads. Most of them use a stand and keyboard sold in a number of guises. The number of different offerings is a testament to a real need. (We’ll note that Apple doesn’t seem eager to address this issue directly. They don’t offer an “iPad-sized” keyboard — the Bluetooth keyboard I use is fine for my iMac, but feels gargantuan when I pair it with my iPad. And Apple’s iPad Dock hasn’t been updated to work with the “Lightning” connector on the newer iPads.)

The iPad’s limitations extend beyond classic office productivity tasks. I just tried to build an itinerary for a long postponed road trip, driving all the way from Key West Florida to Palo Alto. On a Mac, you can easily “print to PDF” to produce a map for each leg of the trip. Then you use the wonderful Preview app (I salute its author and dedicated maintainer) to emend unneeded pages, drag and drop, combine and rearrange the PDF files into a single document. Don’t try this on an iPad: How would you “print-to-PDF” a map page, let alone combine such pages?

Despite the inspiring ads, Apple’s hopes for the iPad overshot what the product can actually deliver. Although there’s a large numbers of iPad-only users, there’s also a substantial population of dual-use customers for whom both tablets and conventional PCs are now part of daily life.

I see the lull in iPad sales as a coming down to reality after unrealistic expectations, a realization that iPads aren’t as ready to replace PCs as many initially hoped.

In his introduction of the iPad in January, 2010, Jobs himself seemed a bit tentative when positioning his latest creation. Sitting in the Le Corbusier chair, Jobs stated that his new tablet would have to “find its place between the iPhone and the Mac”.

This “in-between place” is still elusive.

Microsoft tried to find that “in-between place”, and we know how well that worked. For the Redmond company, the iPad’s limitations were an opportunity: Simply emulate the charm and intuitiveness of the market-leading tablet and cater to the needs of the “professional” user. With its touch interface and keyboard, the Surface device sounded like the solution that had eluded Microsoft’s earlier PC Tablets. In the field, customers didn’t like the dueling interfaces, nor the introduction of layers of complexity where simplicity had been promised. Surface tablets didn’t move the revenue needle and cost Microsoft a $900M write-down.

The iPad represents about 20% of Apple’s revenue; allowing iPad numbers to plummet isn’t acceptable. So far, Apple’s bet has been to keep the iPad simple, rigidly so perhaps, rather than creating a neither-nor product: No longer charmingly simple, but not powerful enough for real productivity tasks. But if the iPad wants to cannibalize more of the PC market, it will have to remove a few walls.

Specifically, the iPad is a computer, it has a file system, directories, and the like — why hide these “details” from users? Why prevent us from hunting around for the bits and bobs we need to assemble a brochure or a trip itinerary?

None of this is news to Apple execs, but they also know that success doesn’t depend on What, on a simple feature list. The next step in iPad growth will depend on How new features are integrated into the user experience. It’s a tricky game of the Best of Both Worlds…and it tripped up Microsoft.

When will we know? I have no idea. Perhaps at the WWDC this coming June.

JLG@mondaynote.com

The Browser Is The OS: 19 Years Later

 

So it was declared in the early days: Web apps will win over native apps. Why let the facts cloud an appealing theory?

Marc Andreessen, the Netscape co-founder, is credited with many bold, visionary claims such as “Everyone Will Have the Web” (ca. 1992), “Web Businesses Will Live in the Cloud” (1999), “Everything Will Be Social” (2004, four years before joining Facebook’s Board), and “Software Will Eat the World” (2009).

But not all of Andreessen’s predictions are as ringing and relevant. His 1995 proclamation that “The Browser Will Be the Operating System” still reverberates around the Web, despite the elusiveness of the concept.

The idea is that we can rid our computing devices of their bulky, buggy operating systems by running apps in the Cloud and presenting the results in a Web browser. The heavy lifting is performed by muscular servers while our lightweight devices do nothing more than host simple input/output operations. As a result, our devices will become more agile and reliable, they’ll be less expensive to buy and maintain, we’ll never again have to update their software.

The fly in the ointment is the word connected. As Marc Andreessen himself noted in a 2012 Wired interview [emphasis mine]:

[I]f you grant me the very big assumption that at some point we will have ubiquitous, high-speed wireless connectivity, then in time everything will end up back in the web model.

So what do we do until we have ubiquitous, high-speed wireless connectivity?

We must build off-line capabilities into our devices, local programs that provide the ability to format and edit text documents, spreadsheets, and presentations in the absence of a connection to the big App Engines in the Cloud. Easy enough, all you have to do is provide a storage mechanism (a.k.a. a file system), local copies of your Cloud apps, a runtime environment that can host the apps, a local Web server that your Browser can talk to… The inventory of software modules that are needed to run the “Browser OS” in the absence of a connection looks a lot like a conventional operating system… but without a real OS’s expressive power and efficiency.

For expressive power, think of media intensive applications. Photoshop is a good example: It could never work with a browser as the front end, it requires too much bandwidth, the fidelity of the image is too closely tied to the specifics of the display.

With regard to efficiency, consider the constant low-level optimizations required to conserve battery power and provide agile user interaction, none of which can be achieved in a browser plug-in.

Certainly, there are laudable arguments in support of The Browser Is The OS theory. For example: Unified cross-platform development. True, developing an app that will run on a standardized platform decreases development costs, but, let’s think again, do we really want to go for the lowest common denominator? A single standard sounds comfy and economical but it throttles creativity, it discourages the development of apps that take advantage of a device’s specialized hardware.

Similarly, a world without having to update your device because the Cloud always has the latest software is a comforting thought.. but, again, what about when you’re off-line? Also, a growing number of today’s computing devices automatically update themselves.

In any case, the discussion may be moot: The people who pay our salaries — customers — blithely ignore our debates. A recent Flurry Analytics report shows that “Six years into the Mobile Revolution” apps continue to dominate the mobile Web. We spend 86% of our time using apps on our mobile devices and only 14% in our browsers:

Apps 86 Browser 14

…and app use is on the rise, according to the Flurry Analytics forecast for 2014:

Apps Web Flurry 2013 2014

So how did Andreessen get it so wrong, why was his prediction so wide of the mark? It ends up he wasn’t wrong… because he never said “The Browser Will Be the Operating System”. Although it has been chiseled into the tech history tablets, the quote is apocryphal. 

While doing a little bit of research for this Monday Note, I found a 1995 HotWired article, by Chip Bayers, strangely titled “Why Bill Gates Wants to Be the Next Marc Andreessen”. (Given Microsoft’s subsequent misses and Marc Andreessen’s ascendency, perhaps we ought to look for other Chip Bayer prophecies…) The HotWired piece gives us a clear “asked and answered” Andreessen quote [emphasis mine]:

“Does the Web browser become something like an operating system?

No, it becomes a new type of platform. It doesn’t try to do the things an operating system does. Instead of trying to deal with keyboards, mouses, memory, CPUs, and disk drives, it deals with databases and files that people want to secure – transactions and things like that. We’re going to make it possible for people to plug in anything they want.”

Nearly two decades later, we still see stories that sonorously expound “The Browser Is The OS” theory. Just google the phrase and you’ll be rewarded with 275M results such as “10 reasons the browser is becoming the universal OS” or “The Browser Is The New Operating System”. We also see stories that present Google’s Chrome and Chromebooks as the ultimate verification that the prediction has come true.

The Browser Is The OS is a tech meme, an idea that scratches an itch. The nonquote was repeated, gained momentum, and, ultimately, became “Truth”. We’ll be polite and say that the theory is “asymptotically correct”… while we spend more energy figuring out new ways to curate today’s app stores.

JLG@mondaynote.com

TV Done Right: Still A Dream

 

As the strong reactions to even the slightest Apple TV rumor demonstrate, there’s a vigorous appetite for a simple, modern Internet TV experience. The technology is ready but carriers aren’t.

Last week started with Big Apple TV News in an authoritative-sounding Wall Street Journal article:

“Apple Inc. is in talks with Comcast Corp. about teaming up for a streaming-television service that would use an Apple set-top box and get special treatment on Comcast’s cables to ensure it bypasses congestion on the Web, people familiar with the matter say.”

Search for “Comcast” in a news aggregator such as Feedly (there are many other good choices), and you’ll see a wide range of reactions to the Apple-Comcast rumor. Given the heat the article generated, it’s odd that there has been zero follow-up from the main players — nothing from Apple and Comcast, no additional information in the WSJ or any other journal. When a deal of such importance is in the works, “people familiar with the matter” have a strong incentive to keep talking, to add color, to spin their side of the story. Of course, no one expects Apple to do much leaking, but the radio silence from Comcast spinmeisters is another matter entirely.

Philip Elmer-DeWitt offers the most likely explanation: The Wall Street Journal got played by someone intent on throwing a wrench into Comcast’s plan to acquireTime Warner’s cable operations. (This wouldn’t be the first time: Cellphone carriers have repeatedly used the WSJ to air their perennial Poor Me complaints about excessive smartphone subsidies.)

Echoes of the WSJ non-story ricocheted around the blogosphere. Some, such as this BBC article, make painful points about the abuse that US consumers undergo at the hands of broadband carriers:

Broadband Cost

As a sharp-witted Be engineer liked to remark: “It costs more… But it does less.”

Carriers take too much money for a user-hostile experience simply because they can. In most locations, cable companies have little or no competition, so there’s no reason for them to do anything more than milk the most profit from a cheap infrastructure. As Apple Insider’s Neil Hughes reminds us, the user experience isn’t a priority for cable providers. Indeed, as I write this from Paris, I have to juggle set-top box restarts and malfunctioning secondary content subscriptions only reluctantly allowed by the main provider.

It doesn’t have to be that way. No miracle is required to make our Cable TV experience easy and gratifying.

Consider today’s cable arrangement, simplified for our discussion. A coax cable is strung from the street into your basement or crawl space. You plug the coax into a signal splitter, connect one output to your cable modem for Internet access, while the others feed the TVs in your household.

Next, you run an Ethernet cable from your modem to your WiFi access point and maybe you also run a wire from the access point to your “most trusted” computer. Upstairs, we see a set-top box, an Internet TV streaming device (Roku, Apple TV, Boxee, or other), and, if your TV is of a certain age, a digital adaptor.

That’s four or five devices that you have to connect and, when things go wrong, disconnect, power down, and restart in the “proper” order.

It’s only too easy to imagine how a next-generation Apple TV could collapse this maze of impenetrable interfaces into one box: Coax in, Wifi and HDMI out and, miracle, one and only one remote! This is something that Apple seems to have the taste and resources to do well.

There are no technical obstacles, no new technology is required, no new software platform, just a careful integration job. I realize I’m veering dangerously close to the “mere matter of implementation” deception, but regardless of the amount of work it would take to integrate the various technologies, the benefit to the user would make the engineering effort worth it.

And there are many benefits:  We can throw away our DVRs as content becomes an app that we can stream whenever we want — the 60 Minutes iPad app is an elegant, flexible exemplar of the type. Rather than paying for a “package” of channels that are selected by the cable provider, we’ll be able to buy a la carte shows, series, and channels through iTunes or similar content vendor. We’ll be able to watch the free-with-ads version of a show, or we can pay for the ad-free edition.

Some day, the status quo will break, perhaps as the result of a patient encirclement and infrastructure buildup — a better, vertically integrated Content Delivery Network, both very much compatible with Apple’s playbook. As the reactions to the (possibly planted) Apple-Comcast rumor amply demonstrate, users are becoming increasingly aware of the disconnect between the experience that the cable companies offer and TV Done Right.

JLG@mondaynote.com

Wearables Fever

 

While Google, Motorola, and Samsung seem eager to jump into the wearables market, Apple characteristically keeps its counsel – and wisely so: Smartwatches and other wearables produce more pageviews than profits.

Wearables are a danger to your health – your mental health, that is. Smartwatches and sensor-laden bracelets aren’t so new anymore — see Microsoft’s 2004 SPOT Watch — but the vernal equinox seems to have triggered a bout of Wearables Fever the likes of which we haven’t seen since the Tablet Fever of January, 2011, when 76 tablets were announced at the Consumer Electronic Show in Las Vegas. As so often happens with pandemics, there was a smaller outbreak, called the Dawn of the Tablet PC, days before the January 2010 iPad launch.

In this year’s derangement, we are witnessing the birth of another epoch-making class of product — the Wearable. As Wired sees it, for example, Jawbone Is Now the Startup Apple Should Fear Most.

In one respect, Jawbone’s devices are a lot like Apple’s. The company admires minimalism…[b]ut Apple’s minimalism is cold — all brushed metal and glass — while Jawbone’s is warm, squishy, and textured… There’s a chance Apple has designed itself into a corner. But for Jawbone, the future is full of possibility.

Then there’s this analysis, quoted and mocked by John Gruber [emphasis mine]:

Cadie Thompson, writing for CNBC, “Time Is Ticking for Apple to Announce an iWatch, Say Analysts”. Apple needs an iWatch sooner rather than later, or the company will risk losing its innovative edge to rivals, analysts say.

They only have 60 days left to either come up with something or they will disappear,” said Trip Chowdhry, managing director at Global Equities Research. “It will take years for Apple’s $130 billion in cash to vanish, but it will become an irrelevant company… it will become a zombie, if they don’t come up with an iWatch.

I’m guessing the ellipsis denotes when he paused for another line of coke.

Parenthetically, it would be wrong to imply that Mr. Chowdhry might be “incentivized” to shout from the rooftops by rewards more satisfying than pageviews — no allegations of stock manipulation complicity here — but I wonder about the games that he and other anal-ists play. As Philip Elmer-DeWitt pointedly noted in a CNN Money column last year, Mr. Chowdhry urged his clients to unload Apple stock for eight months and then blamed the CEO and CFO “for destroying Apple’s shareholder value”.

If you’re curious enough to look at Mr. Chowdhry’s spartan Global Equities Research site, you’ll see he claims to have Commission Sharing Agreements with Goldman Sachs, Merrill Lynch, Barclays, Jefferies, Morgan Stanley and JP Morgan. As the Wikipedia article points out, such agreements “ask that broker to allocate a portion of the commission directly to an independent research provider.” Here, one wonders what the word independent really means…

Back to Wearables: The announcements pile on.

Samsung tells us they’re moving their smartwatches away from Android to a version of Tizen, itself based on a version of the ubiquitous Linux.

Google announces Android Wear, a version of Android for smartwatches.

Motorola, soon to be a Lenovo brand, announces that its moto 360 smartwatch is “Coming Summer 2014 in a selection of styles” and provides these artful renderings:

Moto Wrist Edited

and…

Moto Modern

(I write renderings because, as the Android Wear intro video indicates, these are simulated pictures. This doesn’t mean that the final product won’t be better looking– but we’re clearly not there yet.)

Why the haste? Did Tim Cook succeed in misdirecting Apple’s competition when he pronounced wearables a “very key branch of the tree? Or is there a giant business to be had?

We have many unanswered questions.

First, paraphrasing Horace Dediu, there are the twin questions of For What and By Whom: For what job is a smartwatch “hired”, and by whom? If we look at phones as a model, we see two “employers”: Carriers hire smartphones to increase their ARPU; normal consumers use them as small, ubiquitous, always-connected personal computers.

Will this model work for smartwatches? We can almost certainly eliminate carriers from the equation: Subsidies are out of question because a watch is unlikely to generate carrier revenue.

For us users, a smartwatch collects sensor data, connects to our smartphone, displays alerts, responds to touch and voice commands… and even tells us the time. These are all worthwhile functions that make for neat promo videos, but to keep users interested after the novelty wears out, smartwatches will have to do more than log the miles we’ve run, give us weather updates, and show us the name of the person who’s ringing the smartphone in our pocket. Put another way: We’re willing to pay a premium for our smartphones (whether directly or by contract) because of the huge range of features they provide, the enormous number of apps in the app stores. Will we be as durably aroused – and willing to part with substantial amounts of money – by (yet another) pulse rate app?

Another batch of questions: Since we no longer need a dedicated timepiece to tell us the time — our smartphone does that — Who wears a (dumb) watch these days, How, When, and Why?

Simplifying a bit, younger people don’t wear watches at all and older generations use them as jewelry — and gender-specific jewelry, at that. Furthermore, how many veteran watch-wearers wear the same watch all the time? Many of us own more than one watch, and select the appropriate timepiece (or two — or none at all) for the occasion. These aren’t trivial issues, they’re uncharted territory for mobile device makers and marketers.

Next question: How will smartwatch makers handle the delicate equilibrium between computing power and battery power? As smartwatches evolve and offer more features, a better display, and a more responsive user interface, they’ll need more computing power — and more computing power means a quicker battery drain. Will we put up with watches that run out of power at the end of the day? Will designers retard functionality in order to extend battery life to 24 hours and beyond… or make a smartwatch so big it’ll look like a miniature phone?

The power equilibrium question is why Samsung moved to a dedicated (and pared down) version of Tizen, and why Google did the same for Android Wear. All without giving much information of battery life.

Finally: Is there a business, there? Here in the Valley, Pebble CEO Eric Migicovsky claims to have sold 400,000 watches since January, 2013. At around $150 each, that’s $60M in revenue — a real tribute to Eric’s long-standing belief in wearables (he’s been working at it for six years).

But even if you multiplied this number by 10, it would barely nudge the needle for a large companies such as Samsung, Motorola/Lenovo, or Apple, which means these devices will be confined to the role of smartphone companion. They’ll help make money by enhancing the main product; they’re not going to be a $10B business in themselves.

As Charles Arthur writes in The Guardian, there are fewer than half a million smartwatches in use in the UK: “Wearable computing faces an uphill battle breaking through to the mainstream…”. Similarly, the Register doesn’t see any good, large-scale answers to the question. It calls Google wearables “A solution looking for a rich nerd”.

These challenges might explain why Apple doesn’t seem to have caught this Spring’s Wearables Fever. Smartwatches are destined to be ecosystem extensions, not The Next Big Thing.

JLG@mondaynote.com

One last thought before we close: Not all Ecosystem Extensions are equal. The no-longer-a-hobby Apple TV now brings substantial revenue and growth:

“Sales of the Apple TV are estimated to have grown by 80 percent in 2013, reaching around 10 million units for the calendar year, or some $1 billion worth of set-top boxes sold to end users.”

Horace Dediu puts a “Fortune 130” label on iTunes. By itself, with yearly gross revenue of $23.5B and growing 34%, iTunes is large enough to rank #130 in the Fortune list of the 500 largest US companies:

On a yearly basis iTunes/Software/Services is nearly half of Google’s core business and growing slightly faster.”

While music sales are on the wane, apps and video (mostly Apple TV) show healthy growth. Compared to an Apple TV, how much would an iWatch add to the iTunes business? Apps? Content?

Apple seems wise to stay out of the game until it can make something more lasting than a novelty.

CarPlay Thoughts

 

Who wouldn’t want an iPhone- or Android-like experience in their car instead of today’s misbegotten navigation and entertainment systems? CarPlay’s answer looks nice – until one looks at the details.

Apple’s CarPlay has an air of inevitability. Previously dubbed “iOS in the Car”, CarPlay brings the iPhone’s aesthetics, ease of use, consistency, and universe of apps to the ugly and dumbfounding world of car navigation and entertainment systems.

Seven years after the iPhone launched the Smartphone 2.0 wave, Apple kickstarts another mobile revolution…

It’s an enticing, simple vision. Instead of today’s disjointed systems — which often cost in the $1,000 range, plus $249 for a DVD of updated maps — you get a screen the size of a small tablet running iOS apps with voice and touch control (on-screen and armrest), off-air map updates, open-ended flexibility… We have arrived.

I’ve struggled with dashboard electronics from German, Japanese, and French car makers (no electronics on the old family Chevrolets), and I’ve seen what happened to Ford when it tried to use Microsoft software for its Sync system. Replacing these hairballs with an iOS system only makes sense.

But sense and reality are still living apart.

carplay2

To start, the “iOS in the Car” phrase is misleading. The iOS device “in your car” is the iPhone or iPad that you’ve brought with you — Apple isn’t about to license iOS to automakers (which may be part of the reason why Apple changed the name to “CarPlay”).

And Apple isn’t going to try to take the place of suppliers such as Delphi, VDO, and Aisin by making subsystems for carmakers — it’s not in Apple’s DNA. Not that it would matter if they tried: Automakers have made an art of pinching fractions of cents from their suppliers’ prices; they’d never tolerate Apple’s margins.

CarPlay replicates your iDevice’s screen as H.264 video spewed through an intelligent Lightning cable connected to your car’s USB port. The video format is widely accepted, so the in-car device either understands it already, or can be updated to do so.

So far, so good. As many observers have pointed out, the idea is a wired echo of Apple’s AirPlay, the technology that connects your iDevices (and other compliant products) to your television via the Apple TV black puck. Complications may arise when you consider the various in-dash screen sizes, resolution, actual uses of USB connections (my car’s USB connector is useless for anything other than charging my smartphone), and other mysterious incompatibilities that are beyond Apple’s control. Still, in general, screen replication demands little from the car maker. As with Airplay and a dumb TV set, the intelligence stays inside the smartphone.

The CarPlay proposal is much more limited than the Open Automotive Alliance, a Google initiative that implants a customized version of Android into a car’s electronics. (“Audi connect” is available today; we can expect similar collaborations with Honda, GM and Hyundai.) But if the in-car system runs Android (or QNX, as is often the case today), so much the better, from the carmaker’s point of view: Let Google or one of its partner do all the work to create an Android-based all-in-one car system and let Apple hitch a ride after the work is done. Serving both Android and iOS users is a no-brainer.

It sounds good… but I can’t help but harbor uneasy feelings about this whole “scene”.

To begin with, we have a clash of cultures. To be sure, Eddy Cue, Apple’s Senior VP of Internet Software and Services, is a dealmaking expert and, as a member of the Board of Ferrari, he has serious automotive industry connections. But the spirit that drives Apple is far from that which motivates automakers.

The automotive industry expects to be in control of everything that gets into their cars. The coup that Apple pulled off with the iPhone and AT&T — taking full control of the content, no crapware, iTunes only for media — isn’t going to happen with Mercedes-Benz, or BMW, or even Hyundai. Cars aren’t phones. We’re not going to see aftermarket Toyota CarPlay kits (let alone entire cars) in Apple Stores. Apple won’t get what it always strives for: Controlled Distribution.

Then there’s the F-word: Fragmentation. In-car electronics are a mess, a new culture grafted onto an old one, Silicon Valley and Detroit in a loveless marriage. Actually, that’s  unfair: Under the hood, embedded electronics do wonders to improve the reliability, safety, and economy of our cars. But where the union breaks down is in the User Experience domain. Competent combustion management engineers and the accountants watching over their shoulders have no empathy for smartphone-loving drivers.

The meanderings get more twisted when we consider a key difference between Google and Apple. Google could tell Audi that they’ll pay, in some form, for the user data collected by Audi connect— but Audi already makes a lot of money, they don’t want to open that can of worms. As they say in their privacy agreement:

“We will not share information about you or your Audi vehicle that is connected with your use of Audi connect’s in-car features with third parties for their own purposes without your consent.”

But what would a legally-troubled, profit-starved automaker such as GM say in response to Google’s offer to subsidize the in-car system?

Apple hasn’t played that game.

An all-in-one navigation/communications/entertainment system is a pleasant dream, it feels “right”. But the technical, business model, and cultural obstacles could make for a long, arduous march.

CarPlay could be a very smart way to hitch a ride on many in-car systems without having to struggle with their design and cost challenges, yet another ecosystem extension play.

JLG@mondaynote.com