History repeats itself: IBM vs Apple then, iPhone vs Android now

If history repeats itself, and the unexpected always happens, how incapable must Man be of learning from experience.
George Bernard Shaw
Irish dramatist & socialist (1856 – 1950)

History, ironically, tends to repeat its self. This may be old news in political, economical or historical events but what happens in Hardware/Software industry ?.

While I was reading some articles on the web about the market share of mobile OS’s today/tomorrow, a “pattern” started to emerge before my eyes. There is something in this pattern that indicates what mobile OS will have the major market share maybe 2 years from now, or sooner. As I predict, near future of mobile phones will belong to Android Linux operating system.

Ok that may have sound like foolish… but please be patient and let me (try) explain what are the historical similarities between the war of IBM-Apple then, and Apple(iOS)-Google(Android) now and how will probably be the end of this fight over the market share pie chart. So grab a cup of coffee and open your mind !

Keywords: IBM, Microsoft, Apple, Linux, Open/closed source/hardware/architecture.

Historical events…

Before 1980s there was… chaos. Incompatibility, different platforms on hardware and software, less or no industry standards where some of the troubles in the market. Despite the presence of informal standards which allowed a fair measure of interoperability between different machines from different manufacturers, no single company controlled the industry. Apple was established on April 1, 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne. Their hand-built, Apple I was first shown to the public at the Homebrew Computer Club as personal computer kit that was just sold as a motherboard with CPU, RAM, and basic textual-video chips. In December of 1979, Jobs and several Apple employees visited Xerox PARC  to see the Xerox Alto. Jobs was immediately convinced that all future computers would use a graphical user interface, so he rapidly pushed the development of a GUI for the Apple Lisa computer.

Meanwhile, Microsoft entered the OS business in 1980 with its own version of Unix, called Xenix. However, IBM awarded a contract to Microsoft to provide a version of the CP/M OS, which was set to be used in the upcoming IBM Personal Computer. For this deal, Microsoft purchased a CP/M clone called 86-DOS from Seattle Computer Products, branding it as MS-DOS, which IBM branded to PC-DOS.

The Board is set… and now the fun begins…

In 1981 IBM, finally entered the microcomputer market, with a machine that was very unusual by its standards, largely sourced from outside component suppliers, technically unambitious, ran third-party operating systems, and above all, had an open architecture (somehow this reminds me the way that a Linux distribution is built). It was called the IBM PC (Personal Computer).



I repeat… IBM decided to go on an open architecture, so that other manufacturers could produce and sell peripheral components and compatible software without purchasing licenses. IBM also sold an IBM PC Technical Reference Manual which included complete circuit schematics, a listing of the ROM BIOS source code, and other engineering and programming information. IBM announced the PC on August 12, 1981. Six weeks later at COMDEX Fall, Tecmar had 20 PC products available for sale. Thanks to the open nature of the PC architecture, PC soon had thousands of different third-party add-in cards and software packages available for almost every imaginable purpose. This made the PC the only viable option for many, as the PC was the only platform that supported all hardware and software they needed, allowing the PC to snatch the business market, a market with very diverse software requirements from customer to customer.

Industry competitors took one of several approaches to the changing market, which was to build a machine that duplicated the IBM PC as closely as possible and sell it for a slightly lower price, or with higher performance. The two early leaders in this last strategy were both start-up companies: Columbia Computers and Compaq. They were the first to achieve reputations for very close compatibility with the IBM machines, which meant that they could run software written for the IBM machine without recompilation. This meant for software companies, that it was rational to write for the IBM PC and its clones as a high priority, and port versions for less common systems at leisure. Even thought Apple had the “beautiful” GUI desktop in Lisa (1983) becoming the first personal computer sold to the public with a GUI, it was a commercial failure due to its high price tag, limited software titles, and due to the “ugly” MS-DOS which was available for more machines named IBM PC clones. From around 1984, Microsoft were achieving enormous revenues from DOS sales both to IBM and to an ever-growing list of other manufacturers who had agreed to buy an MS-DOS license for every machine they made (PC clones). For the competing computer manufacturers, large or small, the only common factors to offer joint technical leadership were operating software from Microsoft, and CPUs from Intel. In essence, during the bulk of the 1980s and early 1990s, the main machines that were talked about in the press and in how-to guides, were IBM’s and IBM PC clones.

Nobody is perfect…

Even thought Open Architecture “was the way to go”, with many manufactures supplying the market with IBM PC clones “pre-loaded” with Microsoft’s MS-DOS and most of the market was buying faster and cheaper IBM compatible machines made by other firms, in 1987, IBM made a bold and ultimately disastrous business decision. IBM chose to “go the Apple way” and  introduced their PS/2 line. The PS/2s remained software compatible, but the hardware was quite different, which meant that none of the millions of existing add-in cards would function. The new IBM machines, in other words, were not IBM compatible. In addition, IBM planned the PS/2 in such a way that for both technical and legal reasons it would be very difficult to clone it in a similar way that Apple produce its products. At the end of the 1980s and the beginning of the 1990s IBM made a second disastrous decision by planning to replace DOS with the vastly superior OS/2. In response to this, Microsoft preferred to push the well established IBM PC clones industry in the direction of its own product, called Windows that became the de-facto standard. IBM finally relinquished its role as a PC manufacturer in April 2005, when it sold its PC division to Lenovo for $1.75 billion.

By the early 21st century, the dominant  “IBM PC compatible (clones)” computing platform with millions of “homebuilt computers” that are assembled from available components, and not purchased as a complete system from a computer system supplier, ensured the success of Microsoft Windows which had driven nearly all other rival commercial operating systems into near-extinction. By the mid 1990s for any manufacturer, introducing a new rival operating system had become too risky. Even if an operating system was technically superior to Windows, it would be a failure in the marketplace (such as BeOS and OS/2). Microsoft continued delivering software to cheap commodity personal computers to the majority of computer users while Apple was delivering a richly engineered, but expensive, experience. Apple relied on high profit margins and never developed a clear response. Instead they sued Microsoft for using a graphical user interface similar to the Apple Lisa in Apple Computer, Inc. v. Microsoft Corporation. The lawsuit dragged on for years before it was thrown out of court.

The decade 2000-2010

By the year 2001, Microsoft holds about the 95% of the desktop/small business computers “locked-in” on their technology. On the other hand Open Source projects are getting some attention and by the year 2000 Open Source Development Labs (OSDL) was founded as a non-profit organization supported by a global consortium tasked to “accelerate the deployment of Linux for enterprise computing”. Its goals included “to be the recognized center-of-gravity for the Linux industry”. Linux Foundation was founded in 2007 by the merger of the Open Source Development Labs (OSDL) and the Free Standards Group (FSG). The Linux Foundation sponsors the work of Linux creator Linus Torvalds and is supported by leading Linux and open source companies and developers from around the world. The Linux Foundation promotes, protects and standardize Linux “by providing a comprehensive set of services to compete effectively with closed platforms”.

Microsoft did not like this, as Open Architecture PC (IBM clones and homebuilt computers) combined with the Open Source Linux Operating System could threaten their domination on the web. How that could happen ? Well, the same way Microsoft succeed their domination on the market:

  1. Open Architecture was inevitably going to spread in the market by its nature (remember home-build PC’s versus Apple’s closed architecture Mac’s)
  2. Microsoft didn’t do, by purpose, anything about pirated copies of Windows until Windows XP

Linux is by nature open source, so any company/individual could create a distribution for any purpose. Also the fact that Linux can be easily modified to run on any type of “architecture” was the reason the war over who dominates web/file servers, mission critical systems , data centers is lost by Microsoft -as Linux smoothly replaced Unix in those areas. Every interaction we have with the web and any internet infrastructure in general, is powered in a “monopoly” way by Linux servers. So they started a precautionary “war” on the Desktops/Netbooks market for the sake of their survival. This was called FUD (Fear, Uncertainty and Doubt). On November 16, 2005 OLPC (One Laptop Per Child) project gained much more attention when Nicholas Negroponte and Kofi Annan unveiled a working prototype of the Children’s Machine 1 (CM1) at the World Summit on the Information Society (WSIS) in Tunis, Tunisia. Microsoft, also did not like this…. they tried to kill it (Why Microsoft and Intel tried to kill the XO $100 laptop )

On the other hand, Apple, having learned several painful lessons (1986-1998) tried to adapt its self in the upcoming era of Open Architecture combined with Open Source Projects. On March 24, 2001, they announced Mac OS X based upon the Mach kernel with certain parts from FreeBSD’s and NetBSD’s implementation of Unix incorporated in NEXTSTEP. Also they started a successful transition from the PowerPC architecture to the PC architecture. But wait… that didn’t meant that Apple was embracing Open philosophies. Nobody is allowed to make home-build Mac’s. Even if the kernel was based upon open source projects, Apple was more interested in providing third-party developers with access to internal code than in creating a community where developers would write its operating system for it. Again… they failed by being stuck in an 8% of market share. To overcome this problem on profitability, in Jan 9th 2007 Apple Computer Inc. dropped the word “Computer” from their name to better reflect their move into the wider field of consumer electronics. The same day, they announced iPhone, an internet and multimedia-enabled smartphone engineered during a secretive and unprecedented collaboration with AT&T Mobility—Cingular Wireless at the time.

Apples habit to control everything, wasn’t changed at all with these new product line :

  • Carrier lock-in with SIM lock – The iPhone normally prevents access to its media player and web features unless it has also been activated as a phone with an authorized carrier. Whereas on other smartphones this not an issue.
  • Third party software development – Apple strictly controls the developers’ creativity freedom by any means. Developers to develop native applications for the iPhone have to pay an Apple Developer Connection membership fee. Developers are free to set any price for their applications to be distributed through the App Store, of which they will receive a 70% share. The problem starts when a developer creates an application that is way better and intuitive than the iPhone’s bundled software. If this happens to be true then Apple is free to ban your app from App Store (see more : iPhone developers frustrated with App Store )

With the above attitude, Apple left out carriers and mostly developers who wanted more freedom to unleash their creativity. Somebody saw this coming… and by somebody I mean Google. Some really interesting historical events started to hit the news press. As written in Wikipedia, in July 2005, Google acquired Android, Inc., a small startup company based in Palo Alto, California, USA. At the time, little was known about the functions of Android, Inc. other than that they made software for mobile phones. This began rumors that Google was planning to enter the mobile phone market.

Google Chairman/CEO Eric Schmidt in response to the rumors with a press conference in November 5, 2007, unveiled his vision about an Open Software, Open Device, Open Ecosystem :

“Today’s announcement is more ambitious than any single ‘Google Phone’ that the press has speculated about over the past few weeks. Our vision is that the powerful platform we’re unveiling will power thousands of different phone models. This partnership will help unleash the potential of mobile technology for billions of users around the world. A fresh approach to fostering innovation in the mobile industry will help shape a new computing environment that will change the way people access and share information in the future.”

At Google, the team led by Andy Rubin developed a mobile device platform powered by the Linux kernel which they marketed to handset makers and carriers on the premise of providing a flexible, upgradeable system. On 5 of November 2007, the Open Handset Alliance was unveiled, a consortium of 71 hardware, software, and telecom companies devoted to advancing open standards for mobile devices,  which include Texas Instruments, Broadcom Corporation, Google, HTC, Intel, LG, Marvell Technology Group, Motorola, Nvidia, Qualcomm, Samsung Electronics, Sprint Nextel and T-Mobile. Along with the formation of the Open Handset Alliance, the OHA also unveiled their first product, Android, a mobile device platform built on the Linux kernel version 2.6. On 9 December 2008, it was announced that 14 new members would be joining the Android project, including PacketVideo, ARM Holdings, Atheros Communications, Asustek Computer Inc, Garmin Ltd, Softbank, Sony Ericsson, Toshiba Corp, and Vodafone Group Plc. Since 21 October 2008. Google opened the entire source code (including network and telephony stacks) under an Apache License. With the Apache License, vendors can add, if they will, proprietary extensions without submitting those back to the open source community.

That was it… Android Linux started to gain rapidly a lot of attention and according to NPD Group, unit sales for Android OS smartphones ranked first among all smart-phone OS handsets sold in the U.S. in the second quarter of 2010, at 33%. BlackBerry OS is second at 28%, and iOS (Apple) is ranked third with 22%.(see Reuters). This results are reasonable as Android is sold by several manufacturers over all the worlds carriers, while the iPhone is sold by only 1 manufacturer and only on a single carrier network. As summed up in his blog, Louis Gray states some reasons on why android platform could overcome the sales of iOS platform:

  • Choice : Choice of handsets. Choice of carriers. Choice of manufacturers
  • Momentum : Android has momentum in terms of improved quality, in terms of the number of devices sold and users, applications, which are growing in quantity, soon to be followed by quality. The growth in the number of handsets, carriers and users will drive more developers to the platform, and the holdouts who are not there will eventually make the move
  • Cloud : The phone is built to tap into data stored on the Web is the idea that user doesn’t need to be tied to his desktop computer to manage data on the phone.
  • Capability : The Android platform, as any commercials offer, simply does more and is by  nature capable of doing more.

The trends certainly seem to support the notion of continued Android growth in a way that Apple should look back to its pasts mistakes and re-think the “think differently” model of doing business. Compete’s Nathan Ingraham explains :

The reason Apple should be concerned about Android’s newfound strength is because it has been in a similar situation before, in its competition against Microsoft for home computing. Apple, of course, is the only manufacturer and vendor of phones running the iPhone operating system, while any manufacturer is able to run Android if it wishes. This mirrors Apple’s history pitting its Macintosh operating system against Microsoft Windows. Apple is the only manufacturer who builds computers that run the Mac OS, while a variety of manufacturers were able to manufacture computers running Windows, which helped Microsoft run away with the lead in the OS war back in the 1990’s.

Recent data from AndroLib.com is worth mentioning. The company’s current measurements (by the time this article is written) suggest Android’s App Market is poised to hit the 150,000 mark any day now. On 12 of July, Google publicly announced a new project called App Inventor. App Inventor isn’t about to replace or even threaten the traditional developer model. App Inventor’s goal, Abelson tells The Times , is to “enable people to become creators, not just consumers, in this mobile world.”:

“The Google project, Mr. Abelson said, is intended to give users, especially young people, a simple tool to let them tinker with smart phone software, much as people have done with computers. Over the years, he noted, simplified programming tools like Basic, Logo and Scratch have opened the door to innovations of all kinds.”


To sum up, Android Linux will be the universal platform that will make possible to every device to be connected with millions of other devices and share information with each other…. an absolute wireless network of devices. This is due to:

  • Multiple devices can run Linux
  • Linux is open source, and everybody can be involved in.
  • Multiple manufacturers build devices that run Android
  • Linux belongs to “humanity” and not to a single company.

Human nature is reflected in any aspect of our society. We love exploring, researching, inventing new ways of making our lives easier and ones we do that we urge to be sharing this knowledge with others. The Shamans and Alchemists were the first explorers of material nature and the “invisible” forces that dominated it. The knowledge that they possessed was their strength, well-kept and protected from any ignorant that will try to “steal” it. Their apprentice were the only heirs of this knowledge. In this case, the knowledge is generated by few and only to the benefit of themselves rather than society as a whole. This is a “closed source” model as a method of producing knowledge. Because of humans’ nature to share the produced information, slowly but inevitably this method has been replaced by a new and more open method. Science as opposed to esoteric knowledge, uses the opposite method for the production of knowledge. The knowledge and the source of it (the way that is produced) is available to anybody. This way the “fire” is invented only ones. Someone else takes this invented knowledge end creates something new. This is a standard, “open sourced” method to generate knowledge.

Software and hardware industry is approximately only 100 years old. It is in humans’ nature to change the model of producing innovative products from a closed ecosystem (like Alchemists did) in a more open ecosystem model (like Scientists do).  The use of open models, over the years becomes more clear. Linux is gaining more and more ground not only because it is another software, but because it is the ideal platform that enables more ideas and solutions in all areas of Science and Technology. Microsoft , Apple and any other company will make the same mistakes over and over again if the do not learn from past mistakes. Maybe that’s why IBM is getting involved with the mobile phone industry. In a recent post, 09 August 2010, by Jean Staten Healy of IBM in Linux.com explains the situation:

Businesses and consumers are fast creating a mobile world — there will be nearly one trillion Internet-connected devices in 2011 — and open standards such as Linux are necessary to make this new world work. Embedded Linux runs on almost every smart phone today and will help support the 20 times more mobile data and 40 times more spending on mobile transactions that are forecast to occur in 2015. Consumers don’t know Linux is in their phones, but developers do. The proliferation of smart phones like iPhones and Droids portends that application development for the mobile platform with Linux is only set to grow; a recent Eclipse survey showed that 33 percent of developers now use Linux as their primary development operating system, up from 20 percent in 2007.

Apparently they’ve learned something from their past. Thanks for your patient and I hope you enjoyed my article.

If you have an apple and I have an apple and we exchange apples then you and I will still each have one apple. But if you have an idea and I have an idea and we exchange these ideas, then each of us will have two ideas.

George Bernard Shaw

Irish dramatist & socialist (1856 – 1950)

Note: I have to thank all the anonymous writers on Wikipedia without whom, this article could not be possible.  I am really obliged to you all.

9 thoughts on “History repeats itself: IBM vs Apple then, iPhone vs Android now

  1. very usepul information. Thank you for another great article. I like this web sites. actually I sometimes visit that web sites i think i must write long sentence. I see Your articles is so great and useful for me, thanks for this great work and informative read. thanks for this nice info, it’s so useful for me.


  2. excellent article. very well written. I totally agree. Apple is following the mistakes of their past and will lose market share rapidly due to the openness of the android platform.


  3. You omit so many important and game changing details. I wonder whether it was done on purpose.
    You didn’t write about the period when Apple allowed Mac OS on Mac-clones (and nearly died doing so).
    You didn’t mention the most popular smartphone OS (prior to iOS) – Windows Mobile. It was more open and had thousands od third-party programs/developers.

    >So they started a precautionary ”war” on the Netbooks market for the sake of their survival.
    You made my day. So funny.

    P.S. I tend to ask this question in case anyone actually has an answer: Can you name any IDEA that was invented/created/pioneered by Linux? Not program or technology, but a NEW IDEA.


    • I think you have misunderstood the intentions of the article and you point your arguments over Linux ? What about it?
      Linux is just a kernel… nothing more nothing less….
      If you came to a point that in 2012 you still ask the question “Can you name any IDEA that was invented/created/pioneered by Linux? Not program or technology, but a NEW IDEA.” then I am very sorry Ark-kun but you need to re-read the history of computers and operating systems.


  4. Nice article, a little bit similar in message to a book that I read recently called “The Master Switch” by Tim Wu which explained that the information inductry is actually constantly cycling between “open” and “closed” modes. more here for those interested: timwu.org


  5. Very good read… I’ve been a Windows/Linux man all my life until roughly about a year ago. I bought a MacBook Pro…. Since then I’ve bought three iPhones, an iPad and two iPods for my home. I work in IT as an Enterprise Server Administrator. The reason I choose Apple products now is they simply work. I don’t have to tinker with them constantly and my time away from the office is now the quality time with my family I want. Yes, there are restrictive policies on Apple products. But, they work… To me, that is what matters most of all.


  6. I love my Iphone. I love the Ipad, but i hate that i can not get FREE music, Free Wallpapers, free vids, etc off of sites that offer them because Apple has LOCKED so much out. Also, i can’t even run basic FLASH …c’mon. Lets see how long this lasts. I am considering going the Android route.


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