7/15/2010 by www.Mountainviewcellphones.com
Apple’s got more major problems but now they are very large strategic problems as well. Android is eating away at IPHONE, quickly. We all know about the consumer reports and RF problems with the IPhone, and Apple will probably come out with a fix for it tomorrow, but that is really not the biggest issue (although it’s big).
The biggest issue is that the world has caught up and is surpassing the IPhone.
1. IPhone lost smartphone market share in the latest 3 month average by comscore. Android grew by 4%. By a sheer feature list comparison, phones are on par or surpassing the IPhone. Other traditional manufacturers like HTC, Samsung, Motorola, and LG have better camera’s and video capability, faster and faster processing speeds in software and hardware, and definitely faster networking speeds for the devices with Sprint 4G and Verizon LTE coming. Droid does better. Android leverages the vast manufacturing expertise of Motorola, Samsung, and LG. The Empire Strikes back so to speak. Every carrier has a Droid now and soon every carrier globally. At this rate, Android will have same market share as Apple by 2011 and will surpass Apple in 2011.
2. Technologically, Android phones are now on par and improving at faster rates and address more form factors and niches of the market. According to Google Blog, there are 160,000 daily activations of Android devices globally. This is DAILY…and this is GROWING. Apple’s current theory of one Phone to rule them all is quickly falling apart in the reality that many users prefer different physical form factors and different carriers. As Apple grapples with this fundamental problem, it may mean lower margins, more R&D, and bigger overhead costs of managing these processes. Apple will need to come out with more form factors…it happened at RIMM, it will happen at Apple to. There are low end markets, high end markets, big fingers, long finger nails, rough environments, data hogs, Internet addicts, social networking addicts, super texters, etc…all sorts of people. Apple can decide they are going to give away the niches to all the other players or they can decide to go after each major one. If they don’t go and compete in the niches, they will lose even more market share faster and jeopardize their current leadership in the app space (the crown jewel). If they do go after the niches, this will reduce their economies of scale and profitability and increase the management headache 10.0x to work with many carriers, many form factors, and many different phone engineering projects running concurrently in house. Damned if you do and damned if you don’t. This is the game that the traditional cellular manufacturers play well in, look at the form factors available on Samsung, numerous. They are 1-2 years ahead of Apple in being able to produce many different products and form factors and niche phones profitably. This plays into the strengths of current phone manufacturers and against Apple.
3. Developers love Apple but even here Apple is clamping down. With moves to not allow developers into the club if they also promote Droid will not slow Droid down. It is either going to involve illicit deceit or creative legal fees to avoid Apple’s contract for developers, while they produce for both Droid and Apple, or they will just leave Apple altogether and bet it all on Android. Developers want to develop for the largest platform, and currently Apple is that platform, but it’s losing share fast. Android has it’s own warts in that manufacturers can modify it to much to not allow one application to run on many different devices, but I think for now manufacturers and smart enough to not kill the golden goose.
4. The Wild Card. Android TV. I think Google is going to get it sooner or later and they probably have already. Here’s my prognostication, Android will be the platform for all three screens (TV, Browser, and Phone). Currently at Google there are separate teams for Android and Chrome, but this can change and will probably change. There is just to much strategic value in being able to link a platform across all various form factors. An Android developer can build something for phone that works on TV and on the computer. It’s the ultimate development platform across different “types” of devices as well as many form factors for those devices. It’s pie in the sky thinking but it’s really not that far away and Google has the resources to make this a reality. Developers will have to think not just about mobile but the whole shebang and Android will be the most obvious choice. Apple is attempting a similar strategy with Apple TV and the unique Ipad and will be a contender in this arena as well. Again…Google is reaching out to partners who can manufacture in myriad ways and to have them adopt Android. Manufacturers gain by having a great flexible OS at little if any cost and they can gain a competitive advantage for their products (currently).
It’s an exciting time. Apple’s got a lot to think about and execute on. Are they going to remain a niche player and do their own thing? or will they go into more form factors to address niche markets better.
