Is Apple in danger of extinction because it's a closed system?

What's interesting about Apple is that historically Apple has survived as a very small player. Apple survived MSFT, IBM, and a long string of CEOs from Sculley back to Jobs. I think the real question is whether or not Apple can survive without Steve Jobs. In an ordinary system, with a non genius CEO, I think one could argue for a closed system. The difference with Apple is that Apple keeps extending the system, in fact, building out new ecosystems. When Apple was primarily about Macs, it built out a chain of unbelievably profitable retail stores. Nobody else in the industry has ever been able to do that. Apple created the market for the graphical user interface, built a profitable on demand music industry, and reinvented the smart phone, then reinvented the laptop / webbook / kindle in the form of the ipad.

Moreover, Apple's customer focus and sudden mass market exposure through ipod and iphone enabled Apple's strong customer focus / customer experience / lifestyle value proposition to be experienced by a vastly larger consumer market than Apple's PC brand or Apple Store ever allowed. So closed isn't really the correct word. Apple's strategy has actually created a vast, viral, network of fans who aggressively evangelize Apple products and image.

That said, I feel Apple in the iphone space will settle in far a smaller share of the market than android. However, Apple's margins and business practices make these customers very profitable and in this way apple's closed ecosystem delivers high end user experience for those willing to pay the premium and pay allegiance to the Apple Cult. What's different for Apple now is that Apple never before has had such a large customer base. Apple's strategy with the Mac created devout, and avid fans, yet the numbers were small compared to the base Apple now has. I think there's a social network effect in play with Apple now that it finally has that critical number to tip over the market. Apple will lose share in each market, yet Apple has the critical mass to remain viable. If after Steve job is no longer CEO, Apple can somehow capture the leadership style and spirit of a one-in-a-hundred years leader and innovator, then Apple has a bright future. Even when Apple was a very small company with very few customers, the customers Apple did have were loyal enough to keep the company in business, until its miraculous turnaround. Another company would have failed much earlier under the leadership of Sculley, Gasse, Spindler, Amelio. None of those guys knew anything about Apple's brand.

Apple envy (in the world of "i") is at an all-time high. Extinction is improbable. (Remember ... Microsoft has successively ridden the closed system roller coaster for decades. Even when MSFT adopts standards, proprietary extensions keep the system closed to those who resist.)

Yes, Apple firmware is closed. Though jailbreaking is gaining coverage in the "i" world, it's a risky business--but doesn't stop those who want to open their Apple stuff to accept more stuff. If you don't know what jailbreaking means, you're happy with things as is. Either way, while Apple-flavored Kool-Aid is all the rage ... I don't believe for a moment that Apple developers aren't researching how to make other flavors.

No; for a closed system they are remarkably open. Look at their 1M+ iPhone apps, and App store as examples. Controlling hardware + OS has produced a line of product that is simply more stable and less prone to vulnerabilities than other products. Regarding mobile commerce, however, I agree that Apple may need to join a 'community' like the Google Wallet or Isis. They may still try to go their own way, but the cannot get the market penetration of others if their service is not compatible and only iOS users have access.

No, I don't think they are. Look at the academic system. They continue to write papers and textbooks in a closed system and charge hundreds or dollars for content that is mostly available online. I think Apple has hit a point where they are so big that they have the ability to hire the best to produce the best.

There are many headwinds that I think Apple will face, but the closed nature of their system is actually a benefit if properly utilized.

Open systems place all of the responsibility for vetting and security on the end user. As the number and severity of threats continues to increase, there is likewise increasing value in being able to buy with relative confidence that the app has been investigated and approved. This is of particular value to enterprises. If Apple so decided, I think they’re best positioned to take a huge share of the enterprise market as decision makers evaluate alternatives to RIM/Blackberry.

That said, in order to remain relevant, Apple has to continually drive innovation and give customers what they want. This is less of a problem with open systems because they’re self-steering so to speak.

Apple will always retain their core followers who will allow them to remain profitable. Every segment has them. My other love is motorcycles, and though most riders would love any of the Japanese brands, HD and BMW riders are followers.