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Apple Inc. Admits Defeat With iCloud Drive

iCloud Drive. Source: Apple.

When Apple (NASDAQ: AAPL  ) originally created the mobile operating system that would become iOS, it attempted a dramatic reenvisioning of a decades-old convention of how users manage their digital belongings: the file management system.

In fact, way back in 2005 (relevant section begins at 37:40) Steve Jobs described his view that file systems are needlessly complex to the average user. People should just trust their apps to handle files, and Jobs went as far as to predict that average consumers won't need them one day. That was the thinking behind why iOS obscures the file system and just has apps pass files among themselves without allowing users to directly manage files.

This is also one of the most widely criticized aspects of iCloud, Apple's cloud storage system. Finding files stored in the iCloud is not intuitive on a desktop, which has hurt its adoption compared to rival services. In mobile, Apple was able to pull off this transition surprisingly well because it was largely a clean slate to reset user behavior. But as mobile and desktop converge, you get anchored back to the past.

With the announcement of iCloud Drive at WWDC 2014, Apple just admitted defeat in its crusade against the traditional file system. There must be a reason Apple has backtracked, and presumably it's not because usage of iCloud for file storage was skyrocketing.

iCloud Drive. Source: Apple.

iCloud Drive adopts the familiar file system that Apple has spent years trying to move away from. It's the same old usage model that all of Apple's rivals have embraced. Box, Dropbox, Google Drive, Microsoft (NASDAQ: MSFT  ) OneDrive, Amazon Cloud Drive, and many other cloud storage providers all stuck with the status quo.

Cloud storage is proving to be one of many important aspects of modern platform competition. After all, that's why Apple tried to acquire Dropbox in 2009, only to be turned down. Cross-platform provider Box is preparing to go public, potentially within a matter of weeks. Box's revenue has quintupled since 2011 to $124 million last year.

Microsoft CEO Satya Nadella's heavy emphasis on cloud services has put renewed focus on OneDrive, and OneDrive's deep integration with Office as the software suite broadens its mobile horizons will also spur adoption. Indeed, to utilize the full potential of Office for iPad, you need an Office 365 subscription, and Microsoft prefers to store those Word docs in OneDrive.

Cross-platform vendors like Box and Dropbox rely on subscription fees directly for revenue, but platform operators like Apple and Microsoft play a different game altogether. Platform operators use cloud services to bolster the stickiness of their ecosystems. For Apple, that leads to more hardware sales. For Microsoft, that leads to more Windows and Office 365 sales.

While iCloud's current inferiority in cloud storage likely wouldn't hurt device sales directly, it arguably represents one of Apple's weaker links in its broader strategy of offering end-to-end solutions. The subscription revenue for additional storage tiers won't hurt either.

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Read/Post Comments (5) | Recommend This Article (3)

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 June 07, 2014, at 12:00 PM, RattyUS wrote:

    Admits defeat by selling nearly a billion devices. Some defeat.

  • Report this Comment On June 07, 2014, at 12:15 PM, larryw101 wrote:

    These MOTLEY FOOL authors are something else.

    Garbage journalism !!

  • Report this Comment On June 07, 2014, at 12:52 PM, Ralphyua wrote:

    Actually, Evans been a fair reporter when it comes to Apple. Just because the title says "Apple admits defeat," don't automatically discredit it just because it sounds anti-Apple. That's what paid stupid Samsung commenters do whenever anything positive is written by Apple or negative about Samsung. As far as this article goes, I am glad Apple is admitting defeat. As an Apple shareholder and user of Apple products, I welcome Apple being more open to giving the user more flexibility. I like the ecosystem in general, but there are things that Apple does that are very annoying and constrictive. Not being able to put files on the iCloud using folders like you can in Dropbox was one of the reasons I stuck with Dropbox. Now I will consider using iCloud for my storage needs. Remember, the sign of a great company is one that can also learn from its mistakes.

  • Report this Comment On June 07, 2014, at 1:13 PM, PedroHMG wrote:

    Another totally bogus headline and article! Apple is set to dominate in the cloud, fools!

  • Report this Comment On June 08, 2014, at 9:10 AM, taojoness wrote:

    i don't get why anybody can't handle file systems its as easy as one two three .

    applications are where you keep anything that does stuff programs or apps, each lives in his own folder . documents are where you keep things you make with apps inside you have folders for the type of stuff you made photos word documents pdfs and specific folders for individual projects

    when the app does the filing its a mess i can't find anything quickly in i-photo that was taken years ago .

    My employer totally makes a mess of this simple task especially in windows environment he has about 4 computers networked and he saves files in whatever document directory he happens to be in so important files are scattered between 4 computers and to make matters worse he has moved the computers from room to room with out relabeling them making it a shell game for the files . if he forgets the name of the file it may as well be in a thumb drive in china

    oh yes three is libraries they have stuff the OS does don't mess with it

    i don't think steve was right but an introduction to file systems on new machines would have gone a long way .we no apple hates manuals tho!…

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Evan Niu

Evan is a Senior Technology Specialist at The Motley Fool. He was previously a Senior Trading Specialist at a major discount broker. Evan graduated from the University of Texas at Austin, and is a CFA charterholder.

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