Apple’s cloud is raining on the whole company’s parade

Structurally unable to compete in the cloud landscape, Apple devices have lost the next generation’s most important consumer lock-in

Having stumbled from the first, Apple’s cloud strategy has turned into one of its greatest vulnerabilities in tech’s game of thrones. The strategic importance of iCloud has been redoubled after Google weaponized Android with the release of its Pixel phone. Consequently, Apple’s cloud vulnerability is now a threat as the page turns on the mobile era. It isn’t existentially debilitating for the core markets of the greatest franchise the world has ever seen (e.g. iPhone’s US core); however, it will limit Apple’s growth in not only more competitive new markets (like China), but also new technologies (like the voice interface).

A personal anecdote neatly describes the problem…

I paid a healthy premium for the highest capacity iPhone (128 GBs). Regardless, the free, default iCloud storage is limited to only 5GB for everyone. That means that my data backups, which automatically sync to iCloud, fall woefully short of my phone’s total utilization. So, unless I pay for more iCloud, I shoulder liability of data loss — even when Apple itself handles my device.

Now, I manually back-up my iPhone as a failsafe. The majority of the population won’t do that themselves though — nor should they with all the inherent risk.

The point is not that the consumer is lazy or spoiled; rather, the point is that frictionless upgrades were one of the iPhone’s biggest remaining consumer lock-ins, since there’s now a substantially similar alternative in the Pixel.

For example, when you upgraded to a new iPhone, the Apple Store once managed the data transfer process between devices. For most consumers (especially Baby Boomers and Gen Xers), that was the ultimate no-brainer, making the decision to upgrade to a new iPhone inertial and eliminating any thought of switching to Samsung, et al.

Mitigating this friction also helped keep the iPhone upgrade treadmill spinning at top speed: You don’t have to wait for the right time to upgrade (e.g. after you’ve had a chance to back-up all of your data); you can walk into an Apple Store anytime (i.e. since your phone is automatically backed-up in real time).

Furthermore, iCloud is the hub through which all cross-device syncing occurs for Apple products. The multi-device user experience was one of Apple’s big value propositions — so seamless and intuitive that consumers didn’t have to even think about it. Unfortunately, now, when I’m trying to jam 128 GBs of data on my phone through the iCloud’s 5 GB bottleneck, I can only access the most recent bits and pieces from across my devices after they’ve come out the other side. That isn’t the intended design of the world’s most valuable ecosystem.

Sure, the cloud is a utility and a commodity, but even then, Apple structurally can’t compete, because the cloud is a synergistic byproduct spun-off in abundance from the core businesses of Google and Amazon. (Microsoft too, to some extent.)

Sure, a simple solution is for consumers like me to buy more iCloud storage, which would cost me $3/mo. And, sure, that’s not a lot of money, but again, I already paid a healthy premium for that extra capacity on my iPhone; making me buy more is double-dipping. Plus, with its competitive advantage in cloud, Google’s providing solutions to save me money — like unlimited Google Photo storage.

Yes, the iPhone’s losing some of its stickiness now that Google has capitalized on the opportunity by making it as easy as possible to switch to a Pixel phone at the high-end of the smartphone market. Although the effects of this cause may not be manifest in the iPhone market, they will ripple unto the new markets for frontier technologies of the future. It’s kind of ironic that Apple — a company known for its ability to differentiate itself and provide pleasing consumer experiences — has an Achilles Heel in a commodity product.

Anthony Bardaro is the Founder of Annotote. Nobody wants another app to squeeze into their day. That’s why you need Annotote, a network that makes it faster and easier to read what you read anyway. Don’t waste your time, get straight to the point: Try Annotote today!

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