Watching the keynote presentation from Apple's Worldwide Developer Conference, this is my conclusion: Apple sees Facebook as the primary competition, not Google's Android. I predict that not only will Apple finish off Android, but that Facebook will continue to decline as Apple eats their lunch, too. Eventually, Facebook will join MySpace and Yahoo as an internet relic on life support.
Much has been written about the Android vs. iOS rivalry, and how supposedly Steve Jobs vowed to destroy Android at all costs, including spending "every last penny of Apple's money" or something like that.
But the Android/iOS battle is pretty much over, and iOS has won. The only way that Android will emerge as a major threat to iOS is if someone like Samsung buys up the rights and brings it totally in-house. The Android model of fragmentation just doesn't work. The proliferation of Android versions kills developers because they don't want to make four versions of the same app. The sales are fragmented. The lack of software and hardware integration is limiting the platform, and always will until someone bring it in house and integrates it. Sort of like Apple did from the very beginning.
The key theme I took away from the announcements at the WWDC is one of integration: converging the iOS operating system to the regular Mac OSX operating system. This radically changes the landscape. With seamless sync from your laptop to your phone in real time(!), you get a user experience that is unrivaled.
Right now, Apple has 400 million people with accounts at the iTunes store, and people are buying apps and music and mind-boggling rates. But these users interact primarily with Apple. Apple knows that the real key is getting Apple users to interact with each other. When Apple becomes the hub around which your social network operates, then parties like Facebook are cut out.
The new software features show go far towards making this happen. By making it effortless for the millions of iPhone users to share their digital lives with other iPhone users, people were use the built-in Apple functions preferentially. Why mess with a Facebook app to post a photo, when the built-in iOS functionality is superior and faster?
Facebook is ubiquitous on the web, but the mobile Facebook experience is nothing like the web-based Facebook experience. The Facebook app for iOS is awful and clunky. Facebook has grown a lot as a social plug-in that replaces Disqus and Reddit and several other commenting platforms. But this feature is completely absent in the Facebook mobile app. You can't make website comments through your phone, not can you view the replies to comments you already made. Your phone (at least on the iOS app) will tell you about these replies, but you can't do anything with them.
Facebook has a number of problems that deserve a separate posting by itself (in which I will lay out my case arguing that Facebook is a dead man walking). The primary problem is that it is web-centered trying to reach out to mobile.
Apple is taking the opposite approach in being mobile-centered and reaching back to legacy web. Almost everyone agrees that mobile is the real area of the future, and the growth data backs up that assertion. The legacy web will likely be relevant in the future only to the extent that it integrates seamlessly with mobile.
Apple has not been responding to market desires and customer requests. Instead, Apple CREATES amazing products and customers go enjoy them. Apple wisely recognized that customers can't ask you for something that they think doesn't exist or can't be done. By creating something amazing and showing people how they benefit from it, Apple is shaping expectation and determining what customers want.
Sci-fi types and futurists have long talked about "convergence"-- the idea that one system can seamlessly provide an array of needs. Why do you have to have separate telephone and cable TV jacks in you home? Increasingly, you don't-- fewer people than ever are choosing to have a home phone.
Apple is making convergence happen in a very real sense. Apple is now a dominant player in music publishing, and the legacy studios are scrambling to update their antiquated business models based on CD sales and radio airplay. In 5 years, Apple went form a company that had never made a phone to the company that made the iPhone, killing off Sony/Ericsson in the process and making Nokia, LG and Motorola into struggling bit players. Even the once-mighty RIMM and its Blackberry is withering under the onslaught of Apple innovation and development.
Apple created the modern tablet market, and the iPad has no real rivals. Efforts from competitors have been so inept as to not even really be competitors.
Think about what Apple has done to music. They went from selling MP3 players to being the largest seller of music on the planet.
What's next? Movies? Is Apple going to kill off Netflix? What about e-books? Is Apple trying to go toe-to-toe with Amazon? Who knows?
The point is not that Apple will do anything with movies and books necessarily, but that it is positioned to be a viable threat to any media company or enterprise because of its unrivaled distribution system and how it is integrated into its devices.
As Apple continues integrating its products with each other and with the media distribution it has in the iTunes store/App store platforms, I expect Apple will add $150-$200 billion more in market capitalization. The stock isn't yet done going up.