Normally, I hate to say “I told yo so.” But Macheads whacked me so hard for last October’s “iPhone can’t win the smartphone wars,” I simply can’t resist gloating. According to NPD, during the first three months of 2010, as measured by smartphone operating system unit shipments, Android outsold iPhone — 28 percent to 21 percent market share. BlackBerry OS had 36 percent share. The data is for the United States only.
Android has gotten a big US boost over the last seven months or so. Late 2009, Verizon launched the Droid, putting up 0 million in marketing. Apple isn’t the only company that knows how to successfully sell gadgets. Some of that Verizon marketing attacked AT&T network reliability — and quite effectively. Meanwhile, Android handset distribution increased from one to all four major carriers, while iPhone is confined to AT&T.
Those are short-term reasons. Long term, Android is following a well-charted historical path. I wrote in October: “I’m going to make a bold prediction: Apple’s iPhone will lose the mobile device wars…Put another way: iPhone is to Android — and somewhat Symbian OS — handsets as Macintosh was to the DOS/Windows PC in the 1980s and 1990s. The Mac’s rocky start in 1984-85 gave way to great success because of several killer applications, with desktop publishing being among the most important. But by the mid 1990s, Windows PCs pushed down Mac market share.”
Some big pundits don’t agree with this reasoning. On April 26, Mark Sigal posted at O’Reilly Radar: “Five reasons why iPhone vs Android isn’t Mac vs Windows.” I simply couldn’t disagree more, with his five reasons and overall contention everything is different now. It’s all so eerily familiar and moving in an eerily familiar direction: Apple vs everyone else.
Sigal is a successful venture capitalist, and people aren’t successful in that business without sussing out macro trends or choosing the right companies to invest with. But, hey, we all make mistakes. In this case it’s either him or me, since I’m taking the opposing viewpoint. I won’t critique his five reasons but offer five others matching his but supporting the “It’s Mac vs WIndows again” perspective.
1. Android’s platform has broader appeal. Like the Macintosh, Apple controls the basic iPhone hardware and software platform end to end. There is but one iPhone manufacturer: Apple. Anyone can license Android, for free, and the list of manufacturers, carriers and handsets grows by the day.
The smartphone and other connected devices are destined to replace the PC, by 2015, according to Morgan Stanley. Everyone wants a piece of the market. Late last year, IDC predicted that in 2010 major PC manufacturers would begin selling smartphones. Dell moved into the market and now HP is joining in by acquiring Palm.
Apple’s early iPhone platform success — pushed on by App Store — and mobile’s increasingly important role has created an Apple vs everyone else scenario that is oh-so reminiscent of the 1980s and 1990s. It’s also a free-for-all market, where aggressive and smart-executing companies can compete to be the next Microsoft, which has the PC locked down from any real competition.
Successful platforms share five common traits:
- There are good development tools and APIs for easily making good applications
- There is at least one killer application people really want
- There is breadth of useful applications
- Third parties make lots of money
- There is a robust ecosystem
Only Apple sells iPhone, where mobile developers must follow strict guidelines. Even then, Apple rejects some applications, despite developers’ financial investment and resources commitment to iPhone OS. Last month here at Betanews, Scott Fulton smartly asked: “Is news subject to Apple’s developer agreement?” By comparison, Android is open source, freely licensable and developers aren’t forced to undergo a rigorous app submission approval process.
2. iPhone is a luxury product. Apple reaps some of the highest margins in the tech industry by keeping prices high. Third-parties capitalize on this caché. For example, Mac and iPhone accessories often are pricier than comparable products for Windows PCs or other handsets (I dare you to compare). Sure iPhone 3GS sells for 9 or 9 in the United States, but there is the two-year commitment, data fees, accessories and applications — for the apps more of which are free at Android Marketplace than Apple’s App Store.
Most Android handsets typically sell for to 9, by comparison. Among, BRIC — Brazil, Russia, India and China — markets, iPhone can cost as much as ,000 locked to one carrier. In India, for example, that’s not how the majority of handsets are sold. Premium pricing was one of the factors dooming the Macintosh during the personal computing wars of the 1980s and 1990s.
3. Developers go where the money is. Among technology platforms, the Windows PC is classic example of a robust and vital ecosystem. The Google informational/search platform is another. Around either platform, there is a discernible ecosystem of third parties — not just software developers — making lots of money. The two ecosystems are broad and deep. By comparison, Apple’s App Store/iPhone/iPod touch platform is narrower and shallower, despite the depth of applications, because the ecosystem depends on a closed, end-to-end technology platform. Apple controls everything.
4. Location, location, location. Apple dismisses the importance of search on mobile devices, which is without question near the top of utilities. During last month’s iPhone OS 4 launch, Apple CEO Steve Jobs asserted: “Search is not happening on phones.” He is absolutely wrong, as data from ComScore, NPD and other analyst firms show. The killer mobile app everyone needs is search.
The mobile Web is very much about finding stuff — and close to you; based on location. Apple has relied on third parties and mobile apps, while Google provides some of the best tools, like voice search, built into newer Android versions, all leveraged from cloud services. There is a clash of worldviews: Apple is betting the mobile Web will be applications-centric, while Google pushes the cloud. One approach sees applications pushing out to the cloud, while the other sees cloud services pushing back to the mobile operating system and applications.
Search and supporting services combined is Google’s glue, and it’s a more necessary utility than the hundreds of thousand App Store applications. I search for stuff from my phone all the time. Don’t you?
5. Apple strives to be better, but for most people good enough is good enough. Microsoft won the personal computing wars for many reasons, some stated above. But another is simpler and often overlooked: Good enough is good enough. Microsoft didn’t produce the best products but those that were good enough for most consumer or business needs and, during the 1990s, delivered to market fairly quickly. The old axiom that Microsoft gets it right on the third try, meaning version 3, is a by-product of this rush to market before something might really be ready. By comparison, Google is improving and releasing newer Android versions than Apple is with iPhone. The only real risk to Google’s iteration is Android version fragmentation.
Droid isn’t iPhone, but it doesn’t have to be. It’s a capable smartphone with something iPhone lacks: Physical keyboard. Sure Android 2.x user interface isn’t as polished as iPhone OS and there are about four times as many applications for iPhone as Android. But the Android UI is pretty good and nearly 50,000 mobile apps are good enough.
If a good enough product is cheap enough, available widely enough and supported enough by third parties, it generally succeeds. Buried in the tech marketplace graveyard are many better products ruined by something good enough. Betamax and Netscape Communicator are among the casualties.
Apple revolutionized the cell phone, as it did the personal computer in the 1980s. But in the technology market, the spoils of war often go to the imitators not the innovators. The good enough principle is one major reason.