Have You Noticed The Chink In Apple’s Armor?


(This post originally appeared on Forbes)

“Truly, the tales and songs fall utterly short of your enormity, O Apple the Stupendous.”

Apple does seem mighty and invincible. An enormous market valuation. An omnipotent brand name. An envious and well-earned reputation for design, quality and innovation. And now the announcement of great improvements to their existing product lines and of new, innovative technologies that may change the way inanimate things talk to each other and even how we pay our bills. Apple is arguably the vast, golden dragon of earth, sitting alone on mountains of gold coins, breathing fire, daring anyone to take them on. But a few have noticed a small bare spot on Apple’s left breast. A chink in the armor one might say. One that is nearest the company’s heart. A flaw that was revealed with the announcement of their Apple Watch, and the company’s Internet of Things strategy.

Intel has taken notice. As tech writer Nick Statt wrote yesterday on CNET, “the chipmaker, like Apple, is also focused on the Internet of Things. The company has done numerous proof-of-concepts and has just begun hammering out extensive partnerships with both established brands and manufacturers that can benefit from a symbiotic relationship with the chipmaker. For fitness tracking earbuds, Intel teamed up with rapper 50 Cent’s SMS Audio to build BioSport headphones. For smart-shirt prototypes, Intel worked with Taiwan-based electronic textile manufacturer AIQ. Intel is now also in partnership with Fossil, one of the leading watchmakers in the US, to further capture the smartwatch market it began pursuing with its purchase of Basis Science last year.”

Partners, partners everywhere.  And Intel’s partners, both new (like above) and old, are also hard at work. Microsoft is pouring millions into expanding the use of Windows for device manufacturers. Dell (with the help of Intel) recently launched an “Internet of Things” lab for its customers and suppliers. Intel even even joined up with scientist Stephen Hawking recently to announce a “connected wheelchair.”

Intel is aiming its black arrow directly at Apple’s weak spot, the exposure in its seemingly impenetrable armor: its aloneness.

Apple insists on going it alone. It continues its (very successful) tradition of making its own products, designing its own hardware, controlling its own destiny. Apple is known for having few partners. It will continue to manufacture its own phones and now it will make its own smart-watches. Given the company’s profits, few can argue with this approach. But times are changing.  There are billions of “things.” There are more startups, more entrepreneurs, more competition.  Can Apple’s strategy of doing it alone last forever? With so many startups and brand name companies looking to capitalize on what is expected to be a $7 trillion market can Apple maintain its dominance without help?

Partnering of course has its own challenges. Different opinions. Competing egos. Various agendas. Making oneself vulnerable to the weakest link. But the benefits can be much, much more. Larger markets. Greater distribution. More ideas and opportunities. The ability to spread risk instead of concentrating it on one product line, like Apple is doing with its Apple Watch. This is particularly important when entering new, untested markets. “As a tech company, we’re not so arrogant as to think we know what the end user will want,” said Mike Bell, Intel’s head of new devices. I’m not so sure it’s arrogance. But making a bet like this on your own certainly is risky.appleinte

Companies like Intel, Microsoft, Dell, Google and others are building their Internet of Things strategies on partnerships with others. They are creating software, chips, boards and applications that can run on any device, no matter what size, no matter who makes it. They want to provide the infrastructure that will power the Internet of Things, not just make one thing (like a watch). To them, Apple’s weakness is not their lack of innovation, it’s their lack of partners. Any person (like me) who runs a smaller company will admit: no one can do it all. Apple may do just fine.  But app. And a few companies are betting that this could be Apple’s weakness.


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