Better Together (Premium)

I decided to rewatch Apple’s WWDC 2021 keynote for a second time to see whether I could highlight the biggest announcements from the event and perhaps provide some insight into where things stand when compared to other ecosystems. But with my previous live viewing of the keynote providing some perspective, it became quickly obvious that the big news this year isn’t a particular feature or even a list of features, but rather how the maturation of Apple’s platforms is steadily closing the loop on cross-device integration, providing a better experience---and more lock-in---for its customers.

In the pre-cloud days of the late 1990s and early 2000s, Microsoft pushed the same strategy, which it called “Better Together,” for Windows, Windows Server, and Office. The idea was that these products would be upgraded together whenever possible and that customers would get the most benefit if they upgraded two or even three of them together. A new version of Windows would offer whatever selection of new features, for example, and so would, say, the new Windows Server. But when customers upgraded and used those two new versions together? That’s when the real benefits---and, for Microsoft, the bigger revenues---would kick in.

For this to be enticing to customers, each of the platforms in question must reach a certain level of functional maturity and market penetration. And the users of those platforms must have had enough positive experiences with previous versions of these products to even consider upgrading across the board. That’s absolutely where Microsoft was 20 years, a time we might think of as “peak Windows,” when everything the software giant did revolved around Windows, and every new product or service it considered had to have some tie-in with Windows.

And that’s where Apple is today with its own ecosystem and the iPhone, the product around which everything Apple makes revolves. In this era---yes, “peak iPhone”---everything Apple does must feed the beast. This integration between the iPhone and a stunning array of other Apple hardware, services, and, most important, features, is what makes the Apple ecosystem so lucrative. The benefits to customers are real, and they are what Apple fans correctly cite as their key attraction to the ecosystem: Everything works together.

But the downsides are troubling, too, just as they were 20 years ago with Microsoft. This strategy leads to lock-in, which is bad for customers, even though many don’t even realize it. It’s also anti-competitive because it harms competitors that might provide superior products and services. And since Apple is now a monopolist, as Microsoft was 20 years ago, everything it does needs to be scrutinized by antitrust regulators. Which, of course, it is.

I’m not suggesting that anything Apple announced this past week is illegal per se. But the patterns are familiar enough if you know your history. And even the firm’s biggest fans must be c...

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