Apple counters Microsoft's convergence strategy with Continuity

More devices, working together, not multiple devices mashed into one, gives Apple that many more chances to sell hardware

Apple yesterday unveiled its answer to Microsoft's vision of the future, where multiple devices collapse into one, where compromises are allegedly not allowed, with a recognition that compromises and multiple devices are not only the reality, but potentially lucrative if leveraged.

"Continuity," the term Apple applied to a wide range of features and technologies it will insert into both OS X Yosemite and iOS 8 this fall, was the key to Apple's multi-device acknowledgement, said analysts, its reply to Microsoft's -- and its OEM partners' -- theory that customers want to reduce the number of things they carry.

"These were the most important capabilities Apple unveiled yesterday by far," said Bob O'Donnell, principal analyst at Technalysis Research, in a post to Techpinions today. "Finally, we can start to see a world where the devices play a secondary role to the people and what it is they want to get done."

Continuity is Apple's umbrella label for several distinct technologies. Prominent among them is "Handoff," where iOS 8- and OS X Yosemite-powered devices, using proximity awareness, will be able to hand off in-progress tasks, like a half-finished document or email, from one to the other. Start a Pages document on a Mac, for instance, and pick it up on the iPad for completion.

Other Continuity features included receipt of text messages on Macs, taking and receiving phone calls from the Mac, and an instant ad hoc Wi-Fi hotspot triggered when an iPhone is near a connection-less Mac.

Adjuncts like iCloud Drive, a Dropbox-like enhancement of Apple's online storage service, and Family Sharing -- content-, calendar-, notification-sharing between multiple devices in a household -- also play roles in handling multiple devices.

The play is certainly to an Apple strength -- its hardware lineup of smartphone, tablet and personal computer -- and self-centered in that it's a naked ploy to sell more of its own gear, not accommodate others'. But it is a clue to how it sees things.

Microsoft, by contrast, pushes convergence: It believes that users want to dump two devices -- tablet and laptop -- and replace them with a single chunk of glass, a 2-in-1, specifically its Surface Pro 3. Redmond's partners have jumped on the bandwagon, including Intel, which touted a reference-design tablet/hybrid at Taiwan's Computex trade show on Monday.

Although Microsoft may have muted its 2012 mantra of "no compromises" that it used to describe Windows 8, its pitch for the Surface Pro 3 made plain that it still believes in convergence. "This is the tablet that can replace your laptop," claimed Panos Panay, Microsoft's top Surface executive, when he introduced the 2-in-1 two weeks ago.

Then, analysts wondered how Apple would respond to Microsoft's explicit claim that multiple devices generated friction.

"Apple could reduce friction through the cloud," maintained Ross Rubin in an interview a week ago. "You could watch a movie on one device and pick it up in progress on another. Documents in the cloud, you could pick up a document edited right where you left off."

Rubin was prescient, nailing Continuity's Handoff days before Apple unveiled it.

Others argued after the Surface Pro 3 debut that, no matter how many times Microsoft denies it, compromise is a fact.

"Every device has compromises, in cost, power, size and portability," said Jan Dawson, chief analyst at Jackdaw Research. "We've always used different devices for different things. Before, those different devices were very separate, now they're variations of the same thing. Tablets have essentially the same components as smartphones, dedicated desktop PCs have the same components as tablets. It's really about the form factor, the size of the screen, the power of the microprocessor, memory and storage. But you're always making trade-offs, not least of which is the price."

Computerworld's Ken Mingis and IDG Enterprise's Keith Shaw discuss what they liked (and didn't) at Apple's Worldwide Developer's Conference keynote.

Yesterday, Dawson pointed to Continuity as the difference between Apple's and Microsoft's approaches.

"The theme of Continuity (not sameness) runs through the new elements of cross-device integration in iOS and OS X," Dawson wrote on his "Beyond Devices" blog. "At the same time, there's really meaningful integration at a device level, too, with the ability to share phone calls and text messages between Macs and iPhones in close proximity."

Carolina Milanesi, chief of research for Kantar WorldPanel Comtech, has long applauded Apple's multi-device strategy, seeing it -- and by extension, Continuity -- as its answer to threats on both the smartphone and tablet fronts. "Apple is more about selling more devices to the same people, rather than more devices to more people," Milanesi maintained last week. "That's not going to be a bad business [strategy]."

After Apple's WWDC keynote, Milanesi brought up that line of thinking again. "Really, if you have an iPhone and iPad, how long will it take you to get a Mac after today?" she asked Monday in an interview, referring to Continuity and its implications.

According to Consumer Intelligence Research Partners (CIRP), a Chicago-based firm, Apple has plenty of opportunities to, as Milanesi put it, sell "more devices to the same people."

Of those who owned an iPhone, 58% also owned an iPad, and 59% also owned a Mac, said CIRP, citing nearly two years of survey data. iPad owners were less likely to own other Apple gear -- 48% owned an iPhone, 45% owned a Mac -- but Mac owners looked like the most lucrative, albeit smallest, market. Just 28% of Mac owners also had an iPhone and only 25% owned an iPad.

"Owners of a Mac, iPad, or iPhone are more likely to own another of those devices than the population at large, but overall 43% of Apple buyers own only one of the three major devices," said CIRP's Josh Lowitz in a statement today.

Like Milanesi, CIRP's other co-founder, Mike Levin, believed Apple was missing an opportunity to upsell its current customers. "It doesn't sell as many additional devices to existing customers as it probably could," Levin said.

But not everyone viewed Continuity as Apple's statement on multiple devices.

"I think this is about more people realizing the benefits of iCloud," countered Van Baker of Gartner in an interview after Monday's keynote. "Not a lot of people have a real strong sense of iCloud's value. "[The new features in iOS and OS X] make the iCloud sync and retention much more visible and appealing to them."

Baker posited that, like so many other Apple strategies, Continuity is simply another example of the company's attempt to lock customers, once acquired, into its hardware by virtue of software and services. "But I think Continuity will play reasonably well with customers," Baker admitted.

O'Donnell also dinged Continuity, but for a different reason. While he acknowledged that "Apple is creating a great reason to stick with Apple devices across all their main categories," he questioned that strategy's chance of success.

"The fact is that most Apple users don't have all Apple devices. Most people have a mixture of OS platforms -- some Microsoft, some Google and some Apple," O'Donnell argued. "Their vision could be made much more effective if they could somehow bring other non-Apple OS devices into the group."

O'Donnell questioned whether Apple would, in fact, make such a move. Others also thought it unlikely, and touted evidence in Apple's practices. "They've always been moving in this direction," said Ezra Gottheil, an analyst with Technology Business Research, talking about OS X and iOS integration and the implied focus on its own ecosystem, others be damned.

"Their strategy is that our devices work better together. They may have over-dramatized it yesterday, but it makes a lot of business sense."

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