Meet The New Boss

In the wireless world, people have for years complained about the carrier “tax.” That is, the revenue share one has to give up to the carrier to be on the carrier deck and to extract revenue from customers when on deck or at any sizeable scale if not on deck. Distribution came at a price and revenue was shared with the “boss” – the carrier.

Apple changed all that with the iPhone and its deal with AT&T. All of a sudden the carrier lost pole position. A new company emerged to open up the ecosystem. That, combined with a new form factor device replete with display, touch screen, connected mobility, location, and movement, spawned the development of hundreds of thousands of applications. But Apple is now the new boss. From applications to media (music and now, especially with the iPad, video), Apple is the new king of distribution. Going through the store isn’t just a requirement if you want distribution – it’s a requirement to get on Apple devices at all. That means Apple controls application and media distribution on its devices, which in turn means it controls revenue and any tax associated with that revenue.

Google is taking the Rest of World spot. Without a doubt, consumers love the experience Apple delivers. And for good reason: from hardware to software to media, Apple provides an experience that is best of breed, bar none. But if you’re not going with Apple, you’re going with Android, or if you’re a corporate user, with RIM. Just a few short quarters ago it was “I’m a PC.” Microsoft used to be the one to partner with hardware OEMs. Now, at least for consumers, one is either iPhone or Android. As the consumer becomes more and more mobile, for those who aren’t “I’m an iPhone,” Microsoft is ceding its ownership of non-Apple consumers and pole position as provider of operating systems to all hardware manufactures except Apple to Google.

(As an aside, surely HP must have considered buying RIM. Granted, it would have been an incredibly expensive acquisition relative to PALM, and who knows if such a deal could even work. But it certainly would have complemented HP from a sales leverage perspective and given them immediate traction in the corporate mobile market.)

Then of course, there’s Facebook, playing out this battle on a smaller stage. What more needs to be said than to point at the recent public scuffle between Zynga and Facebook. There was never any doubt about who was in pole position on that one.

Welcome to the new world order. It may look a lot different from a content, user experience, and application perspective, but it sure doesn’t look much different from a business model perspective. Meet the new boss; same as the old boss.