In a session with bloggers at its Professional Developers Conference today, Microsoft's chief software architect Ray Ozzie argued that applications won't be a differentiating factor on smartphones.
"All the apps that count will be ported to every one of them," he said. It's a completely different situation from the PC market."
This is completely wrong, at least in the context of recent years and the next few years in front of us. Robert Scoble captured my reaction perfectly when he said:
"Can you imagine a Microsoft exec arguing that Windows isn't better because of apps? Give me a break. Ray, sorry, but you are off the rails."
While I agree with Scoble on that, I think he missed an even higher level truth:
It's not just the apps...It's the end-to-end experience that matters.
It's ancient history now, but when Apple launched the iPhone there was no App Store. Apple focused on a few core apps with completely differentiated end-to-end experiences and that made all the difference. A good example of this was their mobile web browsing experience, which absolutely blew away what you could do on any other smartphone and subsequently led to a massive increase in productive mobile web use.
It was only after they became differentiated through an awesome end-to-end experience on the platform that they were able to expand into their current leadership position with more than 100,000 apps available for the iPhone today.
Google's best shot at the moment is the Droid which brings together a solid device, the great mobile broadband of Verizon, and a few apps such as Google Maps Navigation and Google Voice which are remarkably better than their counterparts on other devices. But my experience thus far with the Droid is that it is still missing a ton of the simple refinements will be needed before it can compare to the iPhone.
Elegant, simple, end-to-end experiences that "just work" will be the ultimate axis of differentiation for smartphones for the foreseeable future. Until others come closer to matching Apple's attention to these factors, the iPhone will continue to dominate, defining the marketplace and capturing the lion's share of mobile computing profits.
Ray may have been misunderstood, and I believe that Microsoft is actually paying quite a bit of attention to end-to-end experiences as evidenced by recent progress with Windows 7 (which is awesome), Bing, and upcoming things such as Project Natal.
But the points above stand. Apps PLUS a smooth and awesome end-to-end experience will determine who the leaders will be in the mobile computing space.