Never let it be said that Steve Jobs isn’t a pretty smart dude. With the iPhone, Jobs took a massive lesson delivered to him at the hands of Bill Gates and delivered back to Microsoft a complete coup d’etat.

Step back a little over 25 years. The first Mac is introduced to Apple’s board of directors. What it represented was the most advanced personal computer in the world. It felt better. It looked better. It performed better. There was just one problem. You couldn’t find any software to use on it. It was Guy Kawasaki’s job to convince software developers to develop programs for the Mac. That was a tough sell, because Mac’s market share was meager compared to the huge slice owned by clunky MS-DOS boxes. WYSIWYG bought Mac loyalty amongst the graphic design and education communities, but Apple couldn’t never overcome the Microsoft juggernaut and remained relegated to the side lines. Eventually Windows brought most of the advantages of Mac to the PC world, although in an arguably significantly watered down version.

Fast forward to 2007. The first iPhone is introduced to the world. What it represented was the most advanced mobile device in the world. It felt better. It looked better. It performed better. And this time, Jobs eliminated the problem that sunk the early Mac. He insured that there was tons of things you could do on it. Apple was so successful in encouraging development of iPhone Apps that today they have just nudged over the 100,000 mark, according to 148apps.biz. In June of 2009, when Apple announced they were at the 50,000 mark (that’s 50,000 new apps in just 5 months!), VP Phil Schiller showed a bar chart with the number of available apps dwarfing the competition, including Google (just under 5000), Nokia (just over a 1000), Blackberry (also just over a 1000) and Palm (a meager 18). Ironically, Windows Mobile didn’t even get included on the graph, showing how they have completely missed the boat in the mobile space.

So, what are the lessons learned for Jobs?

• It doesn’t matter how cool your hardware is. All that matters is what you can do on it.
• Don’t rely on “build it and they will develop”. Prime the app development pump so you come out of the gate with a clear advantage
• Turn development into a democracy. Establish an app development ecosystem (in all fairness to Apple, this is possible today where as in 1984, software development relied on a handful of companies)
• Don’t worry that the vast majority of iPhone apps gather dust. It’s the perception of choice that’s important. How many Windows programs have you ever used?
• The competitive advantages of hardware will only work for so long. The competition will catch up, and may even pass you. But the sheer bulk of functionality offered by being the runaway leader in available software is a much more difficult thing to overcome.

This time around, Apple has done everything right with the iPhone. in fact, the biggest challenge they have now is being a victim of their own success. They’ve created an Innovator’s Dilemma for themselves. Because they have become the de facto standard for mobile, they have to consider things like backwards compatibility and offering innovation without alienating their existing users. Still, that’s not a bad problem to have!