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 cognizant of some of the obvious disconnects between Apple’s overt touting of the benefits of its new ideas and the realities of its anti-competitive practices.

For example, during the discussion of a cool new feature called SharePlay, which works across iPhone, iPad, Mac, Apple TV, and Facetime, Apple senior vice president Craig Federighi highlighted how the firm was “working with some incredible partners” like Disney+, Hulu, HBO Max, and Paramount+. Notably absent, however, was market leader Netflix, which is among those firms that have complained about Apple’s anticompetitive business practices: A leaked Apple memo reveals that the consumer electronics giant explored taking “punitive measures” against Netflix when it stopped letting customers pay for the service from Apple’s devices, denying Apple its 30 percent App Store tax. There’s some bad blood there.

The problem, of course, is that Apple’s customer base is well-stocked with Netflix users and fans, too. And, sure, maybe Netflix does show up with SharePlay compatibility in the future. But its absence from the keynote was obviously purposeful—sorry, “punitive”—and the underlying message can’t have been lost on Apple’s fans: Our stuff works better together, but only when you stick with our stuff or with the more docile types of partners that we prefer.

Copying features that were invented elsewhere and integrating them into your own products is another familiar pattern. As many critics pointed out, Apple’s very useful Live Text feature, which works across iPhone, iPad, and Mac, and uses AI to recognize text and objects in photos, is very similar to Office Lens, which Microsoft debuted several years ago on Windows Phone, and Google Lens, and other similar products. This integration inarguably harms the third parties that delivered this functionality first, but it also benefits Apple’s customers, leading to a classic antitrust debate about the benefits to consumers vs. the harder to imagine (but very real) downsides to eliminating competition.

One more.

If you look at the segmented scrubber bar on the WWDC 2021 keynote video on YouTube, you can see how much time Apple spent with each product. Not surprisingly, the iPhone received the most attention and by far. Somewhat surprisingly, especially given that Apple didn’t introduce new M1X-based Macs at the show as was originally planned, the Mac still received the second-biggest time slot of the show. And it was during the Mac segment that a third interesting and familiar pattern emerged.

Apple is creating a new Continuity feature called Universal Control that lets you use your Mac’s keyboard and mouse/touchpad simultaneously with your iPad. The demo was actually pretty impressive, with the Mac treating the iPad’s somewhat like a second display, where you move the mouse cursor to the right edge of the Mac display and it appears on the iPad’s display.

With the benefit of a few nights of sleep, this feature now seems, well, mostly just curious. Sure, it will be useful to some people, I guess. But it’s not what I’d call a mainstream feature. And more to the point, Universal Control exists only because Apple didn’t take the obvious step of adding multitouch and Apple Pencil support to the Mac at any point over the past decade. If it did that, its creative customers wouldn’t need to buy a Mac and an iPad—preferably a very expensive iPad Pro—denying Apple those additional revenues. And because it won’t ever take that step, it has created a feature that shouldn’t even exist.

It is perhaps perfect that Mr. Federighi used this moment to confirm what I was feeling as I started rewatching the keynote and writing this post.

“Every device we make is powerful in its own way,” he said. “And when you use them together, you unlock new experiences that feel truly magical.”

That’s exactly how you market Better Together: One device is great. But seriously, you want them all.

This is all very obvious, but it’s still a great strategy. You know, until the regulators come knocking on your door.