Apple iPhone, Google Android On Collision Course For 2010
by Bill French on 30/11/09 at 5:45 pm
Bill French is an information architect specializing in Internet applications. He is also the co-founder of MyST Technology Partners and Senior Editor for iPhoneCTO.
The stage is set – Apple and Google have punched in the launch codes for the equivalent of a mobile DefCon 4. iPhone is dominating the smartphone landscape and its market position is coveted by the Google Android platform. And who can blame either company for circling the wagons – smartphones, 180 million in use today, are expected to reach more than a half billion by 2012 – assuming the world hasn’t ended of course.
Android is the one OS that has the chops to penetrate the smartphone market upwards of 18 to 20% by 2012. Morgan Stanley forecasts more than 100 million Android handsets will be in circulation by then. If this prediction comes to pass, Google will be well ahead of Apple in about 30 months baring any significant innovative market strategies Apple may have planned for 2010/2011.
Predictions Are Just That
We have to be careful of these predictions; they’re based on raw manufacturing data that has been tightly assimilated with known [but forecast] handset models from a variety of manufacturers. We also need to factor in the element of “love”.
iPhone is a “love mark” made possible in part by the DNA of all things Mac and the [arguable] stroke of genius in the tightly controlled iTunes App Store. I’ve written about the power of love marks before – an uncommon attribute of market domination that is difficult to measure and likely to impact predictions in unanticipated ways. When I last measured iPhone’s love mark in July, it was 43/3 (love it vs hate it). Now it’s 49/3, a clear indication that iUsers continue to find great happiness in iPhone and iPod Touch.
Android has not been nominated for love mark measuring [yet], but this brings up another issue; how do you compare the two. Indeed, should we compare – an OS with a tightly controlled device + OS? With the inevitable introduction of the Mac Tablet and the likelihood that it will run iPhone apps, we’ll begin to have a reasonable basis for comparing “smart device” OS adoption success.
iPhone [OS] is a unique beast; Apple has designed its business model around this platform with significant control of the information lifecycle and the apps that create, manage, and distribute information. As made clear by an abundance of talking heads, this level of control has some downside. Indeed, this lack of freedom is one of the competitive angles Android is taking aim at. However, some industry experts believe this [seemingly] harsh degree of control is a competitive advantage. Apple may have the last laugh on this point – consumers want quality experiences and this is especially true in consumer electronics, an industry that has more carnage and product disasters laying by the roadside than the infamous Highway of Death.
While the debate about excessive control of the iPhone platform continues, there’s no argument about iPhone’s customer satisfaction scores according to JD Powers. Apple ranks highest among manufacturers of smart phones used primarily for personal reasons, with a score of 811 (of 1,000 points), and performs particularly well in ease of operation, operating system, features and physical design. LG (776) and RIM BlackBerry (759) .
Mobile Battlefield: The Hearts and Minds of Developers and Consumers
As smartphone competitive strategies are formed, there are two dimensions of the battlefield that are important; developers and consumers. Victory goes to the winner of both; winning the war seems unlikely unless you win the hearts and minds of both the developers and consumers.
For every new Android app being produced today, 400 iPhone/iPodTouch apps are released; every one of them is reviewed and tested against quality guidelines designed to ensure a consistent and reliable experience. This is a solution dynamic that can screw with minds of even the best forecasters. Because the smartphone developer community is a key element of a success strategy, it makes sense to pay close attention to third party iPhone app developers and the likelihood they may [or may not] build apps for both platforms or abandon iPhone in favor of Android. CNET speculated about this a year ago, but the case presented is weak and a lot has changed about the way Apple treats its developer community since then.
“After investing time and money into an application only to be told by Apple that it’s not admitted into the App Store can be a bitter defeat. But now that Android is finally shipping in T-Mobile’s G1, why not jump to Android?” – Don Reisinger, CNET
This is a good point, but any third party developer can easily research the market and determine the probability that a given app will be approved. Apple provides plenty of guideposts to help you gain acceptance into the iTunes App Store.
So why not jump to Android?
The answer is basic math. The economics of mobile application development are pretty easy to understand and no matter how open or free the platform is, the bottom line depends on a viable market with growth, momentum, and opportunity. Reuters recently reported this about Gameloft, a major French mobile games developer:
“We have significantly cut our investment in Android platform, just like … many others,” Gameloft finance director Alexandre de Rochefort said at an investor conference.
“Just like many others”? Apparently there are many developers who share similar sentiments. Rochefort said cut backs of investment in Android is mostly due to the weaknesses of Android’s application store. Whether this sentiment equates to similar feelings by business developers remains to be seen, but Google is certainly not known for getting people to pay for anything except ads.
The Social Card
Mobile social networking is showing signs of strong interest today and dramatic growth on the horizon. Japan (for example) is experiencing mobile social media growth at three times desktop social media growth. As such, one of the battlefronts in the coming mobigeddon will hinge on socially oriented applications, an axis that Google can probably compete effectively and provide its development community with ample support and technologies, but one that Apple may have the upper hand as first-mover.
While Android may ship on a significant number of handsets, it’s possible that the users of this OS will ultimately be found to be less socially interconnected if Android social apps are disjointed or poorly integrated. The existence of high-quality social networking apps on iPhone won’t be enough to challenge the inevitable wave of Android adopters, but the outcome will be measured in terms of customer satisfaction. One dimension of satisfaction will be how well users are connected socially.
The Wave Effect
Google Wave may be a sleeper in the coming mobigeddon. It has the capacity of revolutionizing collaboration and social interaction especially in business-related tasks. This could be a significant competitive angle if Apple continues to block Google iPhone apps from the app store and a super-productive native Android Wave app emerges.
The current iPhone Wave app is a web app for two reasons – (i) there’s no Wave API [yet], and (ii) Apple probably wouldn’t approve a native version anyway (speculation on my part).
WaltFrench
Dec 1st, 2009
Apples to pineapples here; the Android has a much tinier installed base but the ratio is likely to shift substantially in Android's favor. Whether it will shift enough to make it a going concern is a good question that, unfortunately, this article doesn't delve into.
Meanwhile, there's the installed base: the survey doesn't show Apple ahead of competitors, it shows them SMOKING every one of them on EVERY count except battery life. And arguably, the battery life issue is only one because users actually play with apps all day long on the iPhone, versus “oh yeah, I can get an app like that” on Platform X.
Also fun to watch: how wholeheartedly Google backs its favored platform, versus platform agnosticism that is more in keeping with its overall ethos (and with not having egg on its face from being perceived as competing head-on but failing).
billfrench
Dec 2nd, 2009
Walt, good points all around.
Android will do just fine and it will likely surpass Apple OSes on mobile devices sometime before the end of 2012. But I think its success will be somewhat different in terms of its audience.
Android buyers will come in four flavors; (i) current and previous iPhone customers dissatisfied with Apple/AT&T, (ii) geeks that love all things googley, (iii) new smartphone consumers that don't have the budget for iPhone or desire more agility with their mobile carrier, and (iv) businesses that require complete control of the mobile experience and openness of the app platform.
Category (i) won't be any more pleased with Android, and category (ii) is not a large segment of the buying audience. In fact, the geek category is unlikely to pay for apps. Category (iii) and (iv) will be quite successful, so yes — it's going to be a worthy competitor. But in any case, the nature of success will be different from iPhone and I predict customer satisfaction for both of these classes of Android users will fall significantly short of iPhone's ratings.
WaltFrench
Dec 3rd, 2009
I think you underestimate Apple's willingness to fine-tune their phone platform to meet disparate needs.
First, Apple is not in love with AT&T; they made a business decision to give them an excloo in exchange for the control that Verizon was unwilling to cede. In fact, a VZ/AAPL marriage would have been rocky. But on non-exclusive terms, they might yet find common ground.
Second, you already assessed the geek opportunity; I'd throw in the jailbreakers and increase nothing by 50%. Not much reason to get excited about it once Apple goes wide.
Third, the iPhone IS more expensive, but a pittance against two years of service. Now that they have a huge share of the smartphone market, Apple has some economies of scale — in hardware, in 3rd-party apps, and in negotiations with the phone co's.
Finally, I'll wager that you soon see a dramatic turn of events in the corporate IT world. Firms are cutting committed programs wherever possible. In-house support is very expensive and oftentimes the apps look barely better than 1-2-3 (DOS 3.0) era stuff that makes everybody feel out of it. Given a decent turnkey system (a big part of the latest iPhone s/w upgrade was for exactly that), firms would be thrilled to lose the expense, inflexibility and quality issues that they now face. Very few firms can cost-justify inhouse expenses in our downsizing world versus paying say, $15/month per user plus MAYBE an inhouse app store.
Few remember it, but the iPod faced some reasonably good technical competition when it first surfaced. Apple realized that if they wanted to commit the resources, they could own the market, and the iPod Touch is NOTHING like the aging iPod 1.0 in my bottom drawer. Apple now faces an ten-fold bigger opportunity, has set the world afire with one (maybe with the Touch, two) models, and you think they're gonna try to extract every penny and not reinvest in targeting the competition?
andrewlunde
Dec 7th, 2009
I've seen this many times before. BetaMAX vs. VHS, PC vs. Mac, Netscape vs. IE and now iPhone vs. Android. The biggest factor is INSTALLED BASE period. Unless there is some other incentive(first to market, higher profit margin, etc.) when the installed base shifts enough, the developers will follow. Until then, they will wait.
-Andrew
billfrench
Dec 10th, 2009
“… and you think they're gonna try to extract every penny and not reinvest in targeting the competition?”
Actually, what I think is pretty simple – Apple will continue to focus on their target audience as a premium product provider because that strategy seems to be working well. Even in the face of rapid (and potentially significant) market adoption of Android, what benefits would there be to engaging in hand-to-hand combat at low margins? Apple seems to target buyers, not competitors – they prefer to carve out uncontested market segments rather than going where the bloodier fights are.
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May 17th, 2010
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