Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



How Disruptive Is This Threat to Apple?

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

There's been one recurring theme among some Apple (NASDAQ: AAPL  ) bears that they say threatens to topple its empire. Some see it as a grand equalizer of content that can disrupt proprietary architectures in favor of open ecosystems. Some think it will upend the status quo and commoditize all platforms, ruining Apple's business in the process.

Just how big of a threat is HTML5?

Credit where credit is due
Let's get one thing straight first: HTML5 does have incredibly disruptive potential. The keyword there though is "potential," which remains largely untapped right now. As the next-generation standard for building interactive websites, eventually developers will be able to create engaging content with performance that rivals that of apps built with native code for proprietary ecosystems.

Apple and Google are the two most prominent proponents of the standard. Both of are key backers of the WebKit open source browser engine that powers Safari and Chrome. As the top two mobile browsers (due to the combined dominance of iOS and Android), HTML5 is definitely a big deal in the mobile landscape.

Are we there yet?
Right now, HTML5's performance remains lacking, so the threat that it poses to Apple is not imminent. Just ask Facebook's (NASDAQ: FB  ) Mark Zuckerberg, who went as far as to say that the social network's "biggest mistake" that it's made as a company thus far was putting too much on HTML5, a decision that was made two years prior.

The performance simply isn't there yet, which is why Facebook recently rebuilt its iOS app from scratch using native code and delivered major performance gains across the board in the process. A few months later it did the same with its Android app.

However, HTML5 continues to improve, and in the not-too-distant future, developers should be able to achieve performance parity with native counterparts. The theory goes that once all content is platform-agnostic, all devices will inherently become commoditized and Apple will no longer be able to fetch premium prices since its iDevice sales benefit greatly from how many apps are available on its platform.

Even if you accept that HTML5 and native apps will perform the same, there are still a few advantages that proprietary platforms (Apple's or otherwise) will always retain.

The first advantage is convenience. When HTML5 web apps become as good as native apps, the experience of the actual content should be largely the same regardless of platform. The only difference is that an HTML5 web app is just like any other website, while a native app will still be downloaded from the iOS App Store.

Apple has focused a lot on content discovery recently, as evidenced by its acquisition of Chomp. It's much more convenient to peruse Apple's curated catalog for something than it is to venture out into the vast reaches of the Internet.

Developers' ability to actually make money is also another aspect that history has shown favors proprietary platforms, in part due to the aforementioned convenience. Many netizens today have an aversion to paying for content on the broader Internet, while iOS users have already demonstrated a propensity to do just that. One reason is that it's just easier.

If you're on a website and willing to pay for content or services, most of the time you have to go find your wallet or purse, dig up your credit card information, trust that website with your information, and pay for your purchase. Of course, this happens all the time, but it also doesn't happen all the time, particularly for small purchases of maybe a couple bucks. With a proprietary platform, you just enter a password and you're done.

In fact, monetization is the developers' biggest gripe about HTML5. In Appcelerator's and IDC's Q3 2012 survey of 4,700 developers, 83.4% weren't happy with HTML5 monetization. Professional developers need to make a living, and if they can make more on proprietary platforms, that's where they'll focus their efforts and users follow the content.

There's more to Apple
Beyond that, consumers don't buy iDevices purely for content availability, even though that's an important aspect of the purchasing decision. Beyond app counts, consumers also value software/hardware integration, ease of use, ongoing support, industrial design, and integration with other devices, among many others.

Even when HTML5 gets "there," it won't destroy Apple.

Start the year off right
Apple's a longtime pick of Motley Fool superinvestor David Gardner, and has soared more than 215% since he recommended it in January 2008. David specializes in identifying game-changing companies like Apple long before others are keen to their disruptive potential, and he helps like-minded investors profit while Wall Street catches up. I invite you to learn more about how he picks his winners with a free, personal tour of his flagship service, Supernova. Inside, you'll discover the science behind his market-trouncing returns. Just click here now for instant access.

Read/Post Comments (2) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 16, 2013, at 12:15 AM, JHawkinTexas wrote:

    Not gonna happen. HTML5 is better than Flash, but there are several problems with web-based interpreted languages that put them at a disadvantage:

    1. You have to be connected to the web. There are many times when I cannot access a network connection so critical apps or even games, music, contacts, calendar, etc must reside native on my phone, tablet, and laptop.

    2. HTML5 will never have the performance of a native app. Think high performance games that demand all the hardware has to offer.

    3. Slow web connections will drive the user nuts

    4. Many types of productivity apps like web based email and word processing are just clunky and intolerable when running even on a fast connection.

    The chromebook types like to throw this out periodically to see if it will stick. It won't.

  • Report this Comment On January 16, 2013, at 12:22 AM, TimKnows wrote:

    You are a 1/2 year behind the times here and praying that RIM and Samsung won't offer everything and more than Apple's dated business model. Apple has bet the farm on old technology, they are done, with the oldest OS out there and no chance of ever improving that boring experience, all of this Apple pumping is for not. HTML5 is the future, it is fast and easy with RIM's technology, you can see it happening as they have caught up to Apple with a huge library of apps that run at lightening speeds. Try looking into the future here, 6 months behind in tech is huge.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2197227, ~/Articles/ArticleHandler.aspx, 9/25/2016 1:42:06 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,261.45 -131.01 -0.71%
S&P 500 2,164.69 -12.49 -0.57%
NASD 5,305.75 -33.78 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/23/2016 4:00 PM
AAPL $112.71 Down -1.91 -1.67%
Apple CAPS Rating: ****
FB $127.96 Down -2.12 -1.63%
Facebook CAPS Rating: ***
GOOGL $814.96 Down -0.99 -0.12%
Alphabet (A shares… CAPS Rating: *****