Evidently, Fred argued that Apple is "too rooted in hardware" and that "hardware is a commodity" so in the next several years we'll see the fact that they've largely fumbled on the cloud come back and bite them.
John Gruber's issue with Fred's call here is that while most of the hardware industry is a commodity, there will always be premium hardware product – product that push boundaries in the right ways – and that Apple's stronghold here is firm and relatively permanent, given the competition.
I think Fred and John are both right.
To John's point, Apple's hardware will always have the edge in a hardware world that has edges. Even with all its riches and intel, Samsung and friends can't seem build a phone that doesn't blatantly steal from Apple, and even when they do produce something one can't really tell the difference between what they've produced vs the products of their pals HTC, LG and Motorola. Meanwhile, an Apple device is always distinctive, introduces new UX paradigms (Siri vs whatever weird bump thing Samsung has) and is largely paving its own way (which in turn will be the way for all other device manufacturers, and we the consumers).
In a nutshell: Given the fact that Apple has owned the innovative hardware formula for the past 20 years, and really honed it in the past 10, I don't see how anyone else unseats them as the most important hardware manufacture in the world in that timeframe. And in 20 years, we'll still need, want, and buy hardware. So, Apple is here to stay.
But – and now to Fred's point – Apple has already put a limit on what "here to stay" actually means. By ceding the cloud to Google and other providers, they can own the software experiences most tightly tied (or held back) by the hardware and OS, but have entered a phase where everything else will become unbundled and under someone else's control.
John Borthwick and his team at Betaworks published this analysis of Apple homescreens and reveals just how much Apple has already given up. A potent combination of Google's Maps, Mail (via its own app and via SMTP), Search, and YouTube, mixed with Dropbox and Google Drive for storage, dominate Apple products and Apple's users' experiences with their hardware.
While there are still cloud experiences up for grabs – spoiler alert! photos are one of them, one even John questions if Apple really gets – many of these areas are experiences Apple could have won if they had truly invested in and understood the cloud; more importantly, they could have owned the experience even outside of Apple devices and if they had gone so far as to innovate and win with their Maps, Mail, and Photos in the same cross platform way they won with iTunes in the early 2000s, and in the way Google is winning with the cloud today.
Had Apple used this playbook, they would have been in a much more impressive long-term position then they are today, having to defend themselves "strictly" based on hardware and OS, and not what they could have enjoyed: the one-two punch of device and cloud.
"Strictly" is in quotes of course, because come on: winning in hardware for the next 20 years ain't that bad at all.