Ray Ozzie is wrong about smartphone apps

Microsoft exec Ray Ozzie, at a lunchtime session with bloggers at its PDC conference told the bloggers that apps won’t be a differentiating factor on smart phones.

He is wrong. Totally wrong.

Why is Mike Arrington so passionate about his Droid (we argued about it for 39 minutes on the Gillmor Gang last week and then we went to the beach together on Sunday and argued about it some more in private).

I’ve talked about this before. Most of what we argue about is apps.

Droid is better than iPhone because Droid has Google Voice, Arrington says.

iPhone is better than Droid, I say, because I have Tweetie, which kicks ass over Twidroid and the other Twitter apps.

Facebook is better on the iPhone. Noticeably better. Even Chris Brogan (who also is a Droid proponent) said that on his Twitter account.

Anyway, everything about these phones will be about the apps that run on top. Can you imagine a Microsoft exec arguing that Windows isn’t better because of apps? Give me a break. Ray, sorry, but you are off the rails.

If Ray thinks that the best apps will come to Windows Mobile and that the best developers will spend time developing for that platform well, then, Ray is drinking better Merlot than I am.

I’ve seen how even kids compare their phones on the playground. They compare apps and games. The functionality of the phone doesn’t really matter anymore. It’s what’s built on top that gets the kids excited.

Same in business. Last week a VP at Citrix came up to me showing off his iPhone app (it let him get into a Windows box somewhere else in the world and use Microsoft Office).

Even today at the PDC, what did Vivek Kundra (America’s CTO) show his app off on? Yeah, an iPhone. And this was at Microsoft’s own conference!

Ray, the truth is I was there in 2006 talking with the Windows Mobile team when they told me they were going to only build devices for the enterprise. Back then they thought the growth would come from going after RIM. Even Wired Magazine can now see the fumble the team made. They were wrong and now you are wrong. Apps are what will decide winners in this play. For now that’s Android and iPhone. Big time.

But if I were losing developers the way Microsoft is I’d probably say they don’t matter either. It just shows that Microsoft has no secret strategy up its sleeves and has no way anymore to get developers excited about its mobile platforms. Google is now in the best position and Ray knows it.

UPDATE: several commenters here (see comments on this post) say that Ray’s comments were misunderstood. I’ve talked with Steve Gillmor who recorded this lunch session (he’ll get the video up shortly) and it sounds like his comments might be more nuanced than VentureBeat presented them. Cool, let’s get into the comments.

Comments

  1. If apps don't matter, then a lot of people are wasting a lot of time and money creating, buying, and selling them. I don't the question will be whether or not apps are a differentator for smart phones… They will be. The only question is: will the smart phone industry come up with a “killer app” that dominates and changes the game the way e-mail did for the Internet?

  2. Virtually certain Ray is drinking better Merlot. What remains to be seen is whether Android's open development for apps works better than Apple's moderated app store.

  3. German call-a-bike app is available for iPhone only. Swiss rail app (where one can buy tickets on train in-iphone) is available only for iPhone. American Sirius radio is available only for iPhone. Ray Ozzie is therefore utterly incompetent.

  4. I agree. Couldn’t agree more. Ray knows how to fool himself (and apparently BillG whom he fooled into hiring him by a very expensive acquisition of a failed technology). He’s done it before, in the face of no data: Notes used to send out updates every 3 months that no customer could accomodate. Groove was delusion, at least from Groove 2.0 on. Now this delusion.

  5. That's unbelievable. It's amazing that Microsoft can say such stupid things. Of course the applications matter. My son has an iPod Touch and it was the quantity and accessibility of the games on that platform that made him prefer it to the PSP and DSi. Apps are what make me loyal to the iPhone I have and averse to trying something new (this from someone who was on a 6 month replacement cycle for phones).

    Windows Mobile is a story of complete failure when they were in a position to own the market.

    To me the story of why iPhone continues to beat Android is the integrated experience. Since apps matter so much it will always be more appealing designing to a fixed software/hardware platform than the variety of interfaces that will exist among the variety of hardware manufacturers for Android. I certainly believe that Android will be second though :).

  6. great commentary, thanks for the post. they are *always* playing catch up, those Seattle boys? And not very elegantly…

  7. You are right on track about Microsoft and Ray Ozzie missing the bus on this one but your comparison between the iPhone and the Droid is off. There really is no comparison. The big competitor for Android isnt the iPhone its Windows Mobile.

    You should have the same conversation with Arrington but instead of using your iPhone use a Palm Treo. Windows Mobile is about to get steamrolled by Android and its going to come down to a two horse race, Android and iPhone.

    I agree with Scott, its going to be interesting to see if Apple's closed off app store can compete with Google's more open model.

  8. I totally agree with you Robert. I think for the most part Microsoft doesn't get it about mobile and never will. You can look back and see how Ballmer talks about mobile and now Ozzie, they are totally clueless. Why? Because they have experience in enterprise and succeed there. They don't get consumer and show signs they never will.

    The iPhone is so successful because of the apps, period. The Droid will live or die because of the apps that developers create. The developer ecosystem is where it is at, Microsoft does not get it.

    1. The apps help but it’s not successful because of the apps, period. It was a successful product well before there was an app store and apps.

  9. Microsoft has already lost the mobile battle if its senior executives are saying apps don't matter.

    Incidentally, this is the same guy who loves to show off mobile “augmented reality” apps at public appearances. I would expect a clarification in the next few days about what he “really” meant.

  10. Maybe you are wrong Robert.

    I think Ray is hinting of their strategy around Silverlight working on any device. Write once and it will work on three screens and the cloud. He's saying that developers will not be able to support a native application for each OS (and in some cases different versions of an OS). It makes more sense to write once for a single virtual platform that can take advantage of native features (like multi-touch and location awareness). This way you get an application in all the major app stores with a single investment. This is really why Apple refuses to adopt any runtime platform other than their own – they don't want to lose their application exclusivity.

    The real battle is not between RIM, Android, iPhone, WinMob, Nokia – it's really between Flash, HTML5+, JavaFX and Silverlight.

    There are going to be some games that *need* to be native. These will be exceptions to the rule. I would expect XNA and DirectX to be Microsoft's offering there to cover the PC, XBOX and WinMob/Zune. This would compete with the native interfaces on other platforms.

    I think we may find out more tomorrow at the day #2 of the PDC.

  11. Apps won’t matter because WinMo 7 phones will run all the same apps as Windows 7. Windows Mobile 7 is really going to be just Windows 7 on phones. Phones are finally powerful enough to support full Windows, and Microsoft is going to phones just like any other computer.

  12. Actually, I've met quite a few Droid users in the past week. What was their former platform mostly? RIM. I think that's very interesting and it'll be interesting to see what the market share numbers are next quarter.

    1. I would love to see a scientific survey of new Droid owners where they are asked that question. What platform did you come from? Your’s is the first time I’ve seen anyone implicate RIM as the Droid loser. It is always iPhone or WinMo.

  13. I was there for the question and answer and I don’t know if that article is a fair characterization. His answer, in my opinion, was that the majority of these apps are developed by outside consultants for a reasonable amount of money for a business, say 50k. These apps are “not Office type of complexity” and the company has no particular loyalty to any one platform, they’ll port to wherever the benefit in number of users outweighs the cost.

    So it wasn’t a denial that apps are an important differentiation in platforms today, which he said himself, but given an open-enough platform (he said Windows Phone would be more like Windows in term of running anything, no arbitrary process like Apple) developers will follow users, and they hope to lower the barrier of porting through things like Silverlight on mobile.

    I guess that more nuanced view doesn’t get the traffic though. :)

  14. It is sad because as mobile devices get quicker (snapdragon 1ghz) hardware becomes less important to the consumer. Years ago I was arguing how the old iphone was inferior without gps. He thought just a “software update” would fix that…What? Yeah, apps is what counts in this world, tell those hardware nerds to sit down…

  15. Silverlight on devices:
    iPhone – you can use MonoTouch. This embeds the SL runtime into the
    application (statically). I'm hoping plain old economics will drive Apple
    here. The closed garden strategy didn't work too well for them in the PC
    market. Sure, they can go for the premium market again.
    Android – I wouldn't be surprised to see it. You think google wants an OS
    that can't do NetFlix and WinMob can?

    The big disrupter is HTML5. Maybe we'll see something like Silverlight on
    the server rendering HTML5 on the client using something like the MSR
    project called Vault.
    ————————————————–

  16. I think many commenters are misinterpreting what he is saying. He’s not saying apps don’t matter. He’s saying that apps will be rolled out on all platforms. That may be incorrect but it’s a completely different argument than “apps do not matter”.

  17. Scoble,

    Read that article carefully.

    What Ray Ozzie is saying is not that apps don’t count. He is saying that apps won’t be a differentiating factor because mobile apps can be easily ported from one platform to another. Why? Because unlike desktop apps they are not that complicated.

    It makes sense.

    -Augustus

  18. …of course you're blogging to an audience of geeks, most of whom probably have one smartphone or another. But global audience of today's cellular customers? Apps don't matter to them.

  19. Apps are important, however, the base hardware/operating system is what makes the apps sing. Same reason I've been a mac fanatic for so very long. Almost never have to worry about the basics cause they always seem to work. Truth is though I lived with the mac even though some rather important and exciting programs were elsewhere. When necessary I fire up the Windows machine, but only when necessary.

    While I understand everyone gushing over droid being open, it doesn't seem to make it work better yet. Google Voice aside.

    1. Google Voice is more than aside though. It fundamentally evolves the phone’s primary function and that innovation is squashed by Apple’s ridiculous policies. For anyone for whom voice is a primary function Android is better option than iphone.

  20. Apps are important, however, the base hardware/operating system is what makes the apps sing. Same reason I've been a mac fanatic for so very long. Almost never have to worry about the basics cause they always seem to work. Truth is though I lived with the mac even though some rather important and exciting programs were elsewhere. When necessary I fire up the Windows machine, but only when necessary.

    While I understand everyone gushing over droid being open, it doesn't seem to make it work better yet. Google Voice aside.

  21. It depends upon your target market you are talking about. If you mean for people that publish websites then of course they need apps that help them manage their site and keep on top of topics while away from their desk.
    For everyone else, have a working phone that has solid batter life, easy way to check their hosted email (gmail, yahoo, aol) and a web browser for anything else (facebook).

  22. It depends upon your target market you are talking about. If you mean for people that publish websites then of course they need apps that help them manage their site and keep on top of topics while away from their desk.
    For everyone else, have a working phone that has solid batter life, easy way to check their hosted email (gmail, yahoo, aol) and a web browser for anything else (facebook).

  23. Look, this isn't all that complicated. Over the next couple years, virtually all of the innovation that is platform-specific will spread to other platforms. Apple's app approval process is going to have to evolve in order to keep up with Droid. Ditto Droid with iPhone developments. So, Ozzie is right. What can be done on one platform will be done on another. So, what will differentiate the phones is connectivity: In other words, how well the overall platform uses the cloud. The cloud is the platform. Not the phone.

  24. Robert, perhaps a bit of “lost in the translation” here. I was in the room with Ray Ozzie, Bob Muglia, and a small group of bloggers, and while I don't have a transcript, Ray definitely didn't say (or mean) that “apps don't matter”. In fact, he called the current generation of phones “app phones”, and if I can paraphrase a bit, what he meant was that the apps ARE what matter. Do apps matter? Yes definitely. Will you have to buy a particular phone to run a particular app? From what Ozzie seemed to think, not for long.

  25. I have seen multiple presentations where MS clearly states that the advantage of windows over Mac or Linux is that there are so many apps that work very well on windows.

    I wonder how Ray conveniently forgot this while saying apps don't matter on a phone.

  26. I disagree with Ray totally. If porting apps was so easy why hasn't it happened yet? And, do you really think that the best developers will build apps for all platforms at the same time? Do you think that each platform will give equal access to the inards? Google Voice proves that Apple isn't willing to give it access to the keyboard and voice mail components.

  27. Really? Well, then, why haven't apps been ported already? I've seen several apps that are more complex than any Windows app back in 1995. Why didn't Windows apps get ported to Macintosh? Why didn't Macintosh apps like Quark XPress get better ported to Windows?

    I don't believe that platforms will have all the same apps and exact copies of each app. Well, at least not unless you believe in Palm's vision of apps (that they will all be built on top of open Web technologies). Even then, there are the other platform differences to contend with.

    1. “Why didn’t Windows apps get ported to Macintosh? Why didn’t Macintosh apps like Quark XPress get better ported to Windows? ”

      That seems to be what Ray is saying! It’s not easy to port apps on the desktop. The reason apps are not ported on the mobile platforms has a lot to do with the developers. iPhone is very popular right now. Quark did not get ported to windows because lack of popularity among designers. Ray seems to be suggesting that a time will come when they are easily portable (Silverlight?)

  28. Hi Matt Mullenweg! Really? RIM has more users than iPhone. Do you really think the same apps will show up on RIM that have already shown up on iPhone? Do you really think that Windows Mobile will get the same apps? I don't.

  29. Really? Well, why hasn't the same thing happened to Windows and Mac? They don't behave exactly the same, do they? Can you imagine Microsoft saying this about Windows? Give me a freaking break!

    1. It has happened. Apps like MS Office, Firefox, Photoshop, Flash are ported to Mac as well. Windows lock in are custom written Biz Apps which a company has no motivation to spend millions and get ported to Mac. or similar niche products which company has no compulsion to port.

    2. I think you are missing the point with Windows/Mac. Mac and Windows weren’t built in the context of the cloud. Both are clearly pre-cloud products. We are starting to see a lot of apps being built once to run on Win/Mac (Adobe AIR, etc…) Seems likely that is where we are heading with mobile as well. I think Apple is trying to avoid that reality with their draconian controls over development on the iphone platform. If we get to a point where developers can develop once and have their apps work with Palm,Android etc… the landscape will shift towards the one we do have with Apple today where usually it’s develop for the Windows platform first and then eventually come out w/a Mac version.

  30. Since Ozzie isn't an idiot, we have to assume his comments are pure spin, because only an idiot would believe what he is saying. So we can't interpret the comments at face value. We have to understand that he is begging SOMEBODY to believe that apps don't matter — in order for SOMEONE to keep believing that WinMo has a chance to be relevant again. If, by some miracle, Microsoft could suddenly have as many WinMo apps as the iPhone (or more), you can guarantee that he'd be singing a different song.

  31. Since Ozzie isn't an idiot, we have to assume his comments are pure spin, because only an idiot would believe what he is saying. So we can't interpret the comments at face value. We have to understand that he is begging SOMEBODY to believe that apps don't matter — in order for SOMEONE to keep believing that WinMo has a chance to be relevant again. If, by some miracle, Microsoft could suddenly have as many WinMo apps as the iPhone (or more), you can guarantee that he'd be singing a different song.

  32. Good point.. Dont hold me to the numbers but the latest market share I saw for RIM had grown up to 20%, iPhone up to 17%, Windows Mobile tanked down to 9% and some change.

    I find it interesting that when the iPhone first came out, all of the comparisons were to the Blackberry. Ahh, the iPhone cant do push email and Apple made some moves to address that with their support of Exchange. Then Apple jumped the gate with the app store and suddenly email wasnt as important as the apps you can run on the phone.

    I saw an article on CIO magazine this morning listing the top ten applications for the Blackberry. The first one on their list was a solitaire game. Nuf said..

  33. An OS makes it functional. Apps make it personal.

    Droid will be a big hit with tech people and early adopters. But its got to target regular folk, females and lots of other demographics to hit as big a market as the iPhone.

    The iPhone has succeeded because you can sculpt the device to just the way you want it, and you don't have to be a nerd to do it.

    When I see Droid commercials (more screen pixels! multiple apps running! higher megapixel camera!) it is crystal clear they are not targeting mainstream, they are going after the gadget crowd. Which is a niche, even though we don't believe it because we are in it and it seems huge.

    iPhone commercials highlight bird calling apps, shopping apps, music apps, travel apps, foodie apps…apps that appeal to..well everyone.

    And if I hear one more thing about Google voice I am gonna hurl, can people really not afford their calling plans?? Its like $100 monthly for 24/7 unlimited long distance calls on the iPhone.

    Anyway…a great device is one you can craft into your own…the iPhone allows that in hundreds of thousands of ways. That's why non-geeks love it. And the non-geek is the market to hit, because it is huge.

  34. I think it'd be better if you were to start saying “The iPhone is better NOW.” The situation will change, and in 4 months you might well find yourself touting a new device, you should make it more clear you are talking about the very current state of phones.

  35. Hi Robert,

    The “innovation” is in the App + Multi-touch & Sensors (GPS, Velocity, etc.) that create unique functionality and experiences.

  36. To add: apps are largely a function of hardware and operating system. The iPhone and Droid have fundamentally different capabilities in this regard. This means that there are apps that cannot be ported both ways, or, perhaps, there are features or interface pieces that need to be implemented differently.

    If Ozzie is suggesting that hardware and OS capabilities will converge across platforms, I think he's wrong, at least for the next few years. This will be a time of a lot of change, a lot of innovation, and a lot of competition. Apps will matter, as they'll be a reflection of what you can do with your device.

  37. You are spot on about Ray and about the Droid… I love that the Droid is around because competition ups the game for all of us but have spent a lot of time on Fred Wilson's post about i-Phone's App Review process and my contention is that quality matters on Apps even if it takes Apple a couple extra weeks to work it out. Most of the people on the comment string there seem to lack a fundamental understanding of the end user and business drivers for Apple…

  38. You captured my initial reaction best with this statement:

    “Can you imagine a Microsoft exec arguing that Windows isn’t better because of apps? Give me a break. Ray, sorry, but you are off the rails.”

    I'd actually say that it goes beyond apps and that it is end-to-end “experiences” that matter, as I slowly and verbosely and blogoreahly tried to communicate here http://bit.ly/xTGnr.

  39. As an ASP.NET developer I’m totally frustrated and pissed with Microsoft’s incompetence in the Mobile platform industry. Choosing a platform as a developer is a career choice and you come to expect from companies like MS to have insight for future developments. What’s the point is spending $7 bilion yearly in research if you can’t realize something that obvious.

  40. As you said in the update – letz c the video first and then decide. But If VB was right then it is quite amazing.. It is like saying that MS Office, IE and all the rest of the desktop app were in no way responsible of the success of Windows.

  41. I think he's right. Apps are for an era of limited bandwidth. In an era of increasing bandwidth, apps become less meaningful, as connectivity itself is the app. The killer app of the internet, is the internet.

  42. Microsoft will win in the end.

    The reasons being:
    1. MS developer platform (Visual Studio, Device emulation, etc..) are much easier to set up and use.
    2. Their documentation and SDK’s are much more organized and detailed.
    3. They have many more well documented code samples.
    4. They have C# which is much easier to code (sorry C++ and Java)
    5. They have a huge developer base in place – almost zero learning curve.

    It’s true that they did a huge marketing mistake back in the day, but when they finally get their act together with Windows Mobile 7, they will blow the competition out of the water.

    The only company that has a chance against them is Google if they give out dev tools that work as easily as Visual Studio.

    I’m saying this as a person who has been developing on Windows as well as Linux for many years, in C, C++ C# and a little Java.

  43. Monotouch is trying to solve that problem of portability. From one code base you can have both Winmo and iphone apps ( in theory anyway).

  44. And Google Voice is most certainly not avalible on the iPhone. Neither is the Google maps nav application. Two apps that loads of people are clamouring for on the iphone. Its a two way street.

  45. I find it interesting and amusing how the current smartphone platform is beginning to show similarities to the video game console platform – such as 'exclusive' apps being the differentiators. If something can enable cross-phone development, would that be akin to cross-platform published games on the consoles? And would some dev studios start to jump onto that to increase revenue like those on the consoles? (A company like EA has experience in this already, so does that give them the upper hand on smartphones?) And then would the phone makers start to snap up the more talented and successful dev studios to rope them into creating 'exclusive' titles for their phone only?

    Well it should be interesting to watch from the sidelines in any case (just like the console 'wars' have been for so many years)…

  46. Regardless of what Ozzie said and how he meant it, I think you are getting lost in the trenches Robert. Arrington looks at the hardware, you look at software and UX. An argument that can't be won.
    You milked twitter lists to death too, but now we (or I) need you to go out looking for the next thing and get us on that track. And thanks for the scoblemedia-feed.

  47. I don't buy it, the sentiment that “quality matters on Apps even if it takes Apple a couple extra weeks” considering the fact that so many of the 100,000 apps are awful / buggy to put it nicely.

  48. Sorry, that don't fly. If hardware mattered we'd all be using Nokia phones. My N95 has a better radio than the iPhone. The N95 has a better camera. The N95 has a physical keyboard (or, really, the N97 does). More features on hardware don't matter. What matters? Software and apps. Er, experience using it. Which is really the same thing. The iPhone has the worst hardware out there. But it's the best device.

  49. What I meant was: I know that. I think you are right, too. But all Mike seems to care about is Google Voice. Which is fine. But I also think you won't convince him. Therefore, not worth your energy.

  50. To each their own. I've never had a buggy App in 18 months and I've got 7 pages full of them… Awful, agree on that one but there is an audience for most everything.

    Luckily for Apple, others “buy the sentiment”

    1. Do you believe that the apps that are approved are any less problematic than those released for Android? I am not an Android user yet but when talking w/friends who are I’ve not come across any complaints about the quality control of the apps that are available through the marketplace.

  51. I guess the irony here is that they sound so much like the IBM of the 90′s. I would love to hear Ray explain why minesweeper and solitaire were one of the most used applications on windows.

  52. “They compare apps and games. The functionality of the phone doesn’t really matter anymore. It’s what’s built on top that gets the kids excited.”

    Yes, kids and adults alike! You are right on the spot with this one Robert!

    ceo

  53. From your comment, I will assume that you've never written a mobile app nor have ported one between the various platforms and devices. Even web apps are difficult to do because of the differences in device capability, screen size, etc., and no HTML5 (whenever it's finally done and implemented) does appear to fix that.

    Talk to any of the mobile app developers about porting apps and all that you get is a litany of pain and woe.

  54. There's really two questions you've posed:

    1. Do I believe that apps that are screened and approved are less problematic than those that aren't? Yes. I think that's pretty intuitive. Tested apps will have a lower fail rate.

    2. Do I believe that the i-Phone Apps are less problematic than those on Android? Not currently. Android has been out a couple of weeks and the bad guys haven't started putting their stuff on the Android phone but they will and when they do it will hurt the user experience and when that happens, and it will happen, people will wonder why these Apps weren't tested ahead of time…

    I'm with Scoble though, the phone isn't up to snuff compared to the i-Phone… App topic aside…

  55. Hey Matt, you probably brought a lot more technical nuance to your reading of Ozzie's comments than I did, so perhaps I didn't do them justice. That said, I suspect you're mixing your own perception with Ozzie's — I mean, according to my notes he really did say, “I don't think there's going to be differentiation at the app level.” Maybe I lost some nuance there, but I think my summary of his basic point is accurate.

  56. There is one interesting thing here: we will get a new player in the market with Nokias N900. It is Linux based and Linux has a big community. What will happen to the number of apps for a smartphone like that? Interesting times, that is true.
    You could see that Microsoft still does not understand how important software is. Hardware is just the basis and software drives it. So, no apps, no hardware. That easy!

  57. There is one interesting thing here: we will get a new player in the market with Nokias N900. It is Linux based and Linux has a big community. What will happen to the number of apps for a smartphone like that? Interesting times, that is true.
    You could see that Microsoft still does not understand how important software is. Hardware is just the basis and software drives it. So, no apps, no hardware. That easy!

  58. too many things are for iphone only. i think iphone has more apps than windows mobile ever dreamed of. microsoft leaders have been wrong in many many things recently years. search engine, iphone, windows vista. i love my iphone not just because it is sexy, but because it is sooo cool to use
    _______________
    sweet toys

  59. I do recall him saying something like that, but it was in the context of a platform with equal adoption.

    I agree it's a chicken and egg thing, but I know that as an iPhone app maker we don't feel particularly loyal to the iPhone and as new platforms pop up and become popular of course we're porting our app to them. To us it's just another means of distribution and we'll invest wherever there are enough users.