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How Apple might die

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The idea of running your OS in the cloud is the same old "thin client" scheme that has been the Next Big Thing for 40 years. Ever since PCs started replacing terminals, some people have been convinced we must RETVRN.

The thin client approach seems appealing for two reasons. First, it centralizes administration. Second, it allows shared use of pooled computing resources. In practice, neither of these quite works.

A platform like iOS or modern macOS actually imposes almost no per-device administrative overhead. System and app updates get installed automatically. Devices can be configured and backed up remotely. The OS lives on a "sealed" system volume where it's extremely unlikely to be compromised or corrupted. There's still some per-user administrative overhead — the configuration of a particular user's environment can be screwy — but a cloud-based OS still has per-user state, so does nothing to address this.

Pooling resources is great for cases where you want access to a lot of resources, but there's no need to go full-cloud for this. Devices that run real operating systems can access remote resources just fine. The benefit of going full-cloud is hypothetically that your end-user devices can be cheaper if they don't need the hardware to run a full OS... but the cost difference between the hardware required by a thin client and the hardware required to run a full OS is now trivial.

Meanwhile, the thin client approach will always be hobbled by connectivity, latency, bandwidth, and privacy concerns. Connectivity is especially critical on mobile, where Apple makes most of its money. Latency is especially critical in emerging categories like VR/AR, where Apple is looking to expand.

The future is more compute in the cloud and more compute at the edge. There's no structural threat to Apple here.