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Tim Cook Defused Steve Jobs' Thermonuclear War, Then He Took Down Android

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This article is more than 9 years old.

It would be fair to say that Steve Jobs did not like Android, or Samsung's smartphone design team. He promised all of Apple's resources would be deployed in a "thermonuclear war" against the rival operating system and the South Korean company. Tim Cook's Apple never followed up on Jobs' threat... at least not directly. Cook defused the nukes, instead relying on a long strategic play to neuter not just Samsung, but the impact of Android.

Just as America negated the Cold War through patience, propaganda, and technical prowess, Tim Cook has neutered Android's economic threat to Apple through guile, suppression, and finesse.

I will spend my last dying breath if I need to, and I will spend every penny of Apple's $40 billion in the bank, to right this wrong. I'm going to destroy Android, because it's a stolen product. I'm willing to go thermonuclear war on this.

Steve Jobs.

At the time of Steve Jobs death, Samsung was on a roll. The Galaxy S2 had proven itself in the market, the Galaxy Tab family was established, and the Galaxy Note had debuted the phablet form. Three years later, Samsung's smartphone revenue and profits are crashing, dropping more than 64% year on year. Meanwhile, Apple has had the most successful quarter of any company in history. Apple's advantage will only increase during 2015.

I've already spoken about one of the plays made by Apple and Tim Cook to damage Android. This was the push to 64-bit computing in the iPhone 5S. As that smartphone was announced, the roadmaps for Android devices did not have 64-bit computing planned in the near future. Manufacturers and component suppliers were bounced into making bold claims that they would join Apple in the 64-bit world.

They had no choice but to do this. Android's success was built around the promise of being faster, better, and stronger than its rival OS. If Apple was 64-bit, Android had to be 64-bit as well. Promises were made, plans were changed, and the rush to 64-bit computing was on.

The impact of that push remain to this day. Qualcomm's Snapdragon 810 was the chipset expected to lead the charge, but production issues have forced manufacturers to delay products into Q3 2015, or choose alternative chips with the resulting compatibility problems of running third-party Android applications.

Apple weakened the chipsets in Android by forcing the manufacturers to follow them on the 64-bit roadmap. Resources, time, and developmental energies were directed away from competing directly with Apple and into something that has taken far longer than planned.

Through careful financial management, Apple built up the resources to invest heavily in component hedging. The ability to buy components years in advance and have a monopoly on supplies of a product, has been used time and again to keep Apple's bill of materials low while restricting the availability of new technology to its rivals.

The latest component to be ring-fenced by Apple is the fingerprint sensor, denying the Nexus 6 this signature feature:

...former Motorola CEO Dennis Woodside has revealed, as suspected, that the Nexus 6 was originally meant to have a fingerprint sensor until Apple stepped in. “The secret behind that is that it was supposed to be fingerprint recognition, and Apple bought the best supplier,” explains Woodside. “So the second best supplier was the only one available to everyone else in the industry and they weren’t there yet.”

It's not just this sensor that Apple has control of. Cupertino has made a significant investment in buying up supplies of synthetic sapphire, it hedges DRAM as efficiently as Southwest hedges aviation fuel, it is first in line for touch panels, and even air freight for just-in-time shipping is booked out in advance, forcing competitors shipments onto slower land and sea routes.

If you're competing against Apple, you're not going to be allowed to fight with the best components, because Tim Cook reserved them years ago when he was in charge of Apple's operations. Now he's CEO, is it any wonder Apple has continued to ruthlessly manage the supply chain?

Apple has the best components, a lead in many areas of technology that can create almost magical devices, and most importantly, all of these background actions are achieved in concert with creating the best smartphone it can possibly make and then putting it on sale in vast numbers. Every indication this week is that Apple sells more smartphones than Samsung in the last quarter (although Samsung has a wider portfolio of feature phones and basic phones that are not in direct competition with Apple). The public has an appetite for the iPhone 6 family, and Apple has ensured everyone who wants one can get one. If they pay the price.

And that is the most interesting part in all of this. Apple has managed to raise its game and create better devices, while at the same time reducing the options for Android and forcing them onto a developmental path that suits Apple more than it suits Android. In parallel to this, it continues to bring in more money from the high-end of the market, and using that money to prevent any competitor becoming established.

Sony ducked out of fighting Apple at the high-end, and gambled on high-end specs at mid-range prices. That weakened the profitability of the Xperia smartphones. Samsung's 2014 profit warnings noted the increased reliance of low- and mid-range handsets and the loss of market share at the high-end where significant revenue can be made.

The Android manufacturers are being forced to fight the game Apple wants them to fight, with inferior components, distracted engineering staff, and with less reward from the marketplace if they find success.

This is Apple's playbook. The visible cover is to create the world's most loved, magical, smartphone. But the inside pages will be studied for decades to come as an object lesson in how to manipulate a competitive market to your own advantage

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