Thursday, August 23, 2007

The birth of an ecosystem

I have been observing the iPhone phenomenon very closely. Partly because I believe the iPhone is the turning point of this market and will have a lasting impact. Mostly because it had to create a new ecosystem from scratch, and I love studying new ecosystems (from open source collaboration, to social networking). In particular, those managed by an entity acting as God.

The iPhone ecosystem was created overnight, although carefully crafted for months. At the beginning, it was geeks and fashion-conscious people (I repeat myself here, but those who do not understand the fashion component in cellphones and believe it is just about technology are deadly wrong...).

The geeks attacked the phone on day one. The goal was to crack it open. Study it from the inside. It was a discovery expedition. In a day or so, the iPhone was cracked. In a month or so, the first native applications appeared. In two months, the first two methods to unlock it were invented.

The fashion-conscious looked at the geeks to see if they could add ringtones and change the icons on the screen. Once the tools were easy to use, they acted and were very proud to be even cooler.

Apple reacted in an aggressive and smart way. They upgraded the OS of the phone twice, once a month. The upgrade is a marketing positive, with a few twists.

The positive for Apple is that this is the FIRST mobile device that gets a software update once a month and it is so easy to upgrade. It is a game-changing procedure. Nobody else does it or does it even nearly so well. They are years ahead of the competition.

One twist is that every single OS upgrade wipes out every modification by the hackers. If you changed an icon and you upgrade, it is gone. On top of it, the upgrade takes 30 minutes instead than 4. And you have to re-hack the phone to put your ringtones back. And you might lose something else in the restore process, if it does not work well.

Now, the fashion-conscious have had enough. Cool is great, but wasting one hour of your life every thirty days is insane. The ecosystem is losing these people. They won't hack the iPhone anymore, unless Apple lets them do it.

The geeks are still there. They keep working on it. Unlocking the device has been a remarkable effort, similar to pure science. You have an organism you do not know, someone else made it (God or Steve Jobs, pretty much the same). Many researchers try different paths, some paths lead to new paths, someone else picks them up and boom, a new discovery. Fascinating.

New participants are now appearing at the horizon. The "I am not getting the first device because it is buggy, I'll wait a few months". These are now demanding software upgrades. Nobody on the planet ever thought their cell phone will be updated, after they bought it. They now expect it from Apple. Apple MUST add new features. New icons MUST pop up on the phone. Apple created a demand and expectation. It is another twist, but I am not sure if Apple planned it. It looks like a by-product. Sometimes the deus-ex-machina loses a bit of control.

The next step of the evolution is Apple giving Eva (or was it God giving Apple to Eva, I am confused...) and the geeks the power to add applications and change ringtones, without hacking the phone and being forced to throw away all the effort once a month. This will happen once the geeks have satisfied their ego, which will be pretty much done in a month.

At that point, new elements will appear. The ISVs. The companies that build applications for a living and make money out of it. They will change the landscape once more.

Then Apple will create another iPhone and will change the ecosystem. Again and again and again...