I was standing in the bustling arrivals hall of Tokyo's Narita airport, holding my brand new, top-of-the-line iPhone 14 Pro Max. It was a beautiful device, a marvel of engineering, and at that moment, a very expensive paperweight.
It was the classic "broken self-checkout" moment. The machine designed to make my life easier had just become the single biggest obstacle between me and my objective. My plan to grab a local SIM card was dead on arrival. There was no SIM tray.
Okay - yes, that scene is a narrative hook to make a point. And yes, I understand the nuances of eSIM technology. But the underlying frustration is very real, and it brings me to an unshakable conclusion: I will never again buy a phone in the US that doesn't have a physical SIM tray. The lack of flexibility is a deal-breaker to me.
And this isn't just an Apple story. With the launch of the Pixel 10 series, Google has officially followed suit, removing the physical SIM tray for its US models. This isn't a trend anymore; it's the new, frustrating reality of the American smartphone market. Why would the most user-centric companies on earth make such a profoundly user-hostile decision for a huge segment of their customers?
The answer isn't in an amazon style one-pager design doc. It's in a core operating system - the strategic code that runs beneath everything these companies do. This OS has one primary directive: to build and maintain the famous "Walled Garden". But here’s the twist we often miss: in this ethos, the walls don't exist just to trap us. They exist to create a perfect, protected space where Trust can be manufactured as their most valuable product.
The Walled Garden OS Flywheel
For years, I've watched leaders analyze Apple's success by looking at individual features. The App Store. The camera. iMessage. But that’s like trying to understand a championship team by only looking at one player's stats. Apple didn't just build features; they perfected a system.
It’s a strategic flywheel that, once spinning, becomes an almost unstoppable force. Each part feeds the next in a self-reinforcing loop of power and permission. It’s a masterclass in organizational physics.
Here’s my read on how it works.
How Does Flywheel Actually Work
1. It Starts with a Culture of Perfection
Apple products are engineered to be seamless, reliable, and intuitive. "It just works" isn't a tagline; it's a fanatical product promise. This relentless pursuit of a perfect user experience is the initial energy that gets the flywheel moving.
2. Perfection Demands Absolute Control
To guarantee that seamless experience, you must eliminate variables. You must control the hardware, the software, the marketplace, and the user's journey from end to end. This is the "Walled Garden" in action - not a side effect of their business model, but the business model itself. It's the enforcement mechanism for the promise of perfection.
3. Control Enables a Fortress of Privacy
This is the genius stroke. Apple's control allows them to offer a promise their competitors, whose business models rely on data harvesting, cannot credibly make: "We will protect your data." Features like App Tracking Transparency are only possible because Apple is the sole gatekeeper. They turned their control from a potential negative (a restrictive ecosystem) into a powerful moral justification (a safe, gated community).
4. Privacy Forges Deep User Trust
This is the output of the first three steps. Users believe Apple is their advocate in a chaotic digital world. They aren't just buying a phone; they are buying peace of mind. This trust becomes Apple's single most valuable, and defensible, asset.
5. Trust Grants the Permission to Innovate
This is the strategic payoff. Because the user base trusts Apple implicitly, the company is granted a unique permission to make bold, even painful, bets. They can kill the floppy disk, the headphone jack, and yes, the physical SIM card, confident that their users will follow them into the future they are building. It’s visionary leadership underwritten by a massive bank of trust.
This flywheel is the engine. The eSIM decision wasn't just a hardware choice; it was an expression of the flywheel at maximum velocity - asserting control to simplify the product, reinforcing a seamless experience for the majority of its core US market, all justified by the trust that Apple knows best.
The AI Reckoning (When the Garden Walls Became Prison Walls)
For over a decade, this flywheel was an invincible engine of growth for Apple. But the rise of generative AI was the first major technological shift where their core operating system became a liability. The very forces that made the flywheel spin became the friction that threatened to grind it to a halt.
Think about it:
The AI revolution was built on vast, cloud-based data, which Apple's Fortress of Privacy prevented them from collecting, and for anyone on that platform.
AI thrived on open collaboration, which was antithetical to Apple's culture of Absolute Control.
AI developed through rapid, messy, public iteration, which clashed with their Culture of Perfection.
The fortress designed to protect its users also isolated Apple from the biggest technological conversation in a generation. The flywheel, so perfectly tuned for the mobile era, was suddenly misaligned with the future.
This is why their recent "Apple Intelligence" announcement was so fascinating. The partnership with OpenAI wasn't just a feature update; it was a necessary, pragmatic patch on their operating system. It was an admission that even their perfect fortress needed a gate to the outside world.
My Final Take - The Builders Dilemma
So, what's the lesson here for those of us who actually build products and lead engineering teams?
The "Walled Garden OS" is a masterclass in building a defensible, wildly profitable ecosystem. It’s a strategic choice that prioritizes a perfect, seamless user experience over flexibility and openness. As builders, we face this trade-off constantly. Do we lock down the APIs for a more controlled experience, or do we open them up for greater interoperability at the risk of fragmentation?
Apple’s system proves that when you get it right, building high walls can create a fortress of trust that customers will pay a premium for. But it's also a cautionary tale. A system built on absolute control can become rigid and insular, as we saw with Apple's scramble to catch up in AI. The OS that made them dominant in one era made them vulnerable in the next. And now we see its most potent tactics - removing user choice for tighter control - being adopted by competitors.
The real work for product and engineering leaders is understanding which game you're playing.
Are you building a system designed for total control and a perfect, captive experience? Or are you building a platform designed for openness and adaptation? The answer isn't always obvious, but as Apple is learning, the OS that got you here might not get you where you're going next.
So, my question to you, as a builder, is this:
As you design your next product, what is your 'core operating system' optimizing for - control or flexibility
That said, I know I'll be watching the Apple event next week to figure out which country I need to buy my next iPhone (with physical sim) from.