Apple Bets it All On Siri and iCloud

June 11th, 2012

If you want to know whether Apple’s going to continue its remarkable growth in the next five or more years, there’s two things you need to look at: Siri and iCloud.

Apple continues to improve hardware and software. The new MacBook Pro is beautiful, Facebook integration looks great (integrating Facebook events and Calendars should be especially nice), and Apple’s in-house maps and turn-by-turn directions looks very good, too, albeit at the expense of street view and transit directions, which is a large expense. But these improvements are inherently evolutionary, steps in a direction Apple’s been heading in for years. We’ve known that the future of Apple’s notebook computer form factor is MacBook Air-like since 2008, and we’ve suspected that at some point they will get high resolution displays, too. These are not bold new steps based on a new vision. They are very good updates that flesh out a vision we’ve known and loved for a while.

Most of what Apple announced today is exciting and something I’d love to have, but it isn’t something I must have. The improvements to Maps are very good, but Google Maps works well enough. Passbook looks nice, and it’ll certainly be nice to have any boarding passes or sport tickets on my iPhone, but it’s not earth-shattering. The new MacBook Pro looks like the best notebook Apple’s ever released, but relative to the MacBook Air or current MacBook Pro even, it’s not dramatically better.

It sounds like I’m complaining that today’s event was a let-down, iOS 6 isn’t introducing much worth upgrading for, and the new MacBook Pro is a boring update. That’s not what I’m saying. Actually, each thing Apple announced is impressive and took a massive amount of work. The new MacBook Pro really is the best notebook Apple’s ever shipped, but here’s the thing: their line-up as of 9:59 AM this morning was really, really good too. Apple’s hardware is getting to the point where it’s so good that it’s good enough for nearly everyone, so dramatic improvements like a retina display for Macs is a relatively minor improvement for users. The same goes for iOS. There’s a law of diminishing returns in play here: as you continue developing something, you have to put more and more effort in to squeak out a diminishing amount of actual utility. In other words, when you go from a flip phone to an iPhone, there’s a huge leap forward. But when you go from an iPhone 4 with a high-resolution screen and a great camera to the faster iPhone 4S with a better camera, there’s little net improvement. You’ve lost leverage.

In the words of Clayton Christensen, these improvements are sustaining innovations, rather than disruptive. They’re filling in the holes in a very grand and mostly realized vision. iPhone, iPad and MacBook hardware are solid and so is iOS. What I think this tells us is that Siri and iCloud are integral to Apple’s future. If they don’t hit a grand slam with them, it’s going to be difficult to maintain their level of growth going into the future.

The reason why is because Siri and iCloud are disruptive technologies. iCloud promises that your data—whatever it is—will always be with you no matter what device you use, and that is a very ambitious, very meaningful promise. If all of my data is there no matter what, and I don’t have to think about it, then I can just do whatever it is that I want to accomplish without worrying about the technical details. If I want to edit an article while waiting in line somewhere, no problem—I’ll just pull out my iPhone. And it’ll be there on my iPad, too. It allows devices that used to be very standalone and discrete to become almost one device with different forms. The iPhone, iPad, MacBook, and whatever new device they come up with are simply windows to what matters to you rather than all-important devices which hold your life in them.

Siri is, if it’s possible, an even more ambitious promise. What Apple is promising with Siri is that voice—conversation, basically—can be a primary user interface for computing devices. Want to send someone a message that you’re running a bit late? No problem, just tell Siri and it’s done. Want to find a movie to go to? Just ask. And if you want dinner beforehand, you can talk to your phone, and it’ll find a restaurant for you and make reservations.

If the promise is fulfilled, Siri could erode our dependence on direct input (like a keyboard, cursor and touch) almost entirely and allow wholly new kinds of devices to take shape. At some point, Siri could become so good that a device without a screen could be quite good. If this fictional device was released in Fall 2012, it would play music, get all kinds of information from the web, make phone calls, send and receive messages, post to Twitter and Facebook, reply to emails and make restaurant reservations. That’s a lot of functionality from a device that doesn’t even have a screen.

That seems crazy right now, but Siri could make the smartphone unnecessary for a lot of people in the same way that the iPad makes the PC unnecessary for many regular users. That’s what a disruptive innovation is, and it provides Apple with new, untrod territory to explore. If Siri continues to get better, and makes good on its promise, it will allow Apple to create new kinds of computing devices that do to the iPhone what the iPhone did to the iPod.

And that’s precisely why iCloud and Siri are so important to Apple’s future. If Apple continues to improve the iPhone and iPad’s hardware, and to improve iOS, they’ll continue growing well, because they’re in nascent markets. But if they want to continue defining the future of computing as dramatically as they have for the last five years, and thus enjoying the massive growth they have over that period, the iCloud and Siri bets have to pay off. They have to make good on those promises.