Apple and iOS will not become a smartphone monopoly

I just read this article on Techcrunch about why -allegedly- iOS will dominate the burgeoning smartphone O/S market.

It won’t.

As I said in the comments, I can’t agree with this analysis of the market.

Even from an instinctive point of view, without referring to the market numbers, it is highly unlikely that a high end desirable brand like Apple will become the dominant player in the mobile space. I’m unconvinced they even want to.

Apple will continue to have a disproportionate impact on the direction of the market and likely remain the fanboy and girl object of desire and admiration for the foreseeable future, but do not mix this up with the realities of the wider market.

In addition, Apple remains a more desirable piece of kit for laptops and desktop use with PC’s, but has never been dominant – the arguably inferior Windows O/S has.

Once you do look at the numbers, the likelihood of Apple and it’s iPhone O/S taking an equivalent position to Windows monopoly on desktop, seems even less realistic. Firstly most of the growth in mobile subscribers over the next 3 years will be in developing countries. Second, the bulk of the upgrades from feature to smartphone of western users, will now come from the un-tech savvy. They will believe what the shop sales person says, or just pick the brand of phone they are used to and had before. iPhones will even be out of the reach cost-wise of many Western users, on lower incomes.

Apple is vastly profitable, it does not need to own the entire market and were it to try to it would likely not be the most profitable of operations that it is.

In addition, open ecosystems are more likely to dominate and the Android O/S is free to install. This is without even discussing RIM’s new O/S, or Samsungs Bada (Samsung is the worlds biggest manufacturer of phones).

With only 30-40% of the US and UK population having a smartphone, there is a huge amount of growth to come – but with 3-4 times the number of phone subscribers due to have smartphones, than there are current internet users globally, it is extremely improbable that the phone O/S war will even be just a two horse race, in the next 3 years, or even 5, IMHO.

More reading? I wrote about Android versus Apple some time ago here:

Most People Now Realise Android Will Win

Judging by this recent poll which the eminent @quixotic ran on his LinkedIn pages, it’s clear that general thinking has caught up with those of us who have been arguing open Android was always going to win over closed Apple, with Android being the clear dominant future for smartphones.

The results from Reid Hoffmans recent poll are pretty clear

People argue of course over how open Android really is, but that is missing the point. It is, for better or worse, more open and lower cost (being free for most licensee’s) than Apple’s IOS; and in this race that is all that matters.

See the full Android versus Apple poll here.  Just incase that one wasn’t enough, a second Android versus Apple poll I stumbled across thought the same thing.

 

 

Paranoid iPhone

Let’s face it. Most panel debates at conferences are boring. So whenever I’m invited to sit on one, I try and speak more as if I’m down the pub to ensure I say what I really think.

Heroes of the Mobile Screen in London last week was no different and resulted with my confident declaration that “the West Coast is drunk on the iphone” seconds later being pinged around the Twittersphere.

In Hong Kong the mobile commentator (and pen of Communities Dominate Brands) Tom A Hinonen  wrote a hugely detailed blog post, agreeing. Closer to home atleast one well known tweeter declared “He’s right”. Always nice to get positive feedback!


Valley investors are equally intoxicated and certainly for the next 6-12 months, if you’re running a mobile internet start-up you’ll be judged on your iphone app even if that is not strategically your final destination.

Since early 2008 I’ve been making bets that Android will over take iPhone in handset numbers by end of 2010 and go on to become the dominate mobile platform of the wider Western world.

This multinational lime green invasion force is home grown from California’s Google, but even now Silicon Valley is very much still iPhone Valley. This particular manifestation of the bubble effect of the Bay area has been compounded by some historical baggage. Europe had (until the second coming) been leading the way in advances in mobile, from inter-country spectrum standards such as GSM, to SMS. So we have a more pragmatic view when it comes to smart phones and the fragmented graveyard of mobile operating systems.

iPhone might seem perfectly placed to maintain it’s early blitzkrieg advances on the mobile battlefield, but it’s missing some heavy artillery in functionality (multi-tasking) and as a lone backer of the unified iPhone army, gambles the mixed blessing of control, closed ecosystem and superior design against the disorganised firepower of open-source and an impressive array of allies from the ecosystem, including a 400 strong Motorola Engineer Android army.

Apple can always improve the functionality of course (and will) but choice and competition has rather a good track record against early innovators – even if those leading the charge had superior technology.

The Apple Mac was and still is very much second place in market share to the inconsistencies of PC hardware & Microsoft Windows. Those who remember DIP switches or Windows 3.0 drivers will remember just how painful “compatibility” used to be, yet Windows has still dominated since.

Phil Libin of the excellent Evernote sighted the iPod as proof Apple could dominate a market. No question, the iPod is the Walkman of its time, often copied rarely equalled, it has achieved ubiquity; but a music player is not a phone. It has one job: to play one music format. Furthermore, you can buy that music from any store. How successful would the iPod be if you could only play Apple AppStore music on it?

The very fact Google has managed to get the assorted faculty of Mobile Operators and Handset Manufacturers to work with them at such speed gives you an idea of just how seriously they take the iPhone threat. Giants have been awakened.

Furthermore the wildcard of Microsoft, which has thus far entirely failed to respond appropriately to the inevitable future of mobile, replacing desktops and laptops within a handful of years, may yet awaken and surprise us all … or as it did with the Internet, the web and search, it may do too little, too late once again. I’d argue in fact, it is already too late, at least for any chance of dominating the first decade of real, usable, mobile internet device.

iPhone no question provided the first unasaleable proof that if you give users a mobile internet device which is easy to use with flat rate data, they will embrace it like a their lost child.

But the ubiquitous platform in years to come will not be minimalist white and black and named after a fruit, it will be a Picasso Michelin-man with gangrene. You read it here first 🙂

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The iphone is good … but not that good.

As Paul Jozefak rightly points out on his blog, it is truly unreal that after all the bitching about lack of cut and paste, they have still left it out. Maybe it will be a Christmas present from them instead 😉

That aside, I still rate the iphone as a fantastic piece of engineering. As a net device, or for apps, its truly fantastic. But as a phone, it truly sucks. Its still better than a Windows Mobile phone, but that isnt good enough – nor should that be a measurement of success!

The iphone came down from Heaven and thus they were all in a clammer.
(know this artist? I’d like to leave credit and link – please leave a comment if you know)

If a phone is going to be “a phone” then it has to do one thing well first: Be a phone.  That means decent battery life, and easy one hand operation for making calls. If I cant retrieve someone from my address book, in the dark with one hand (this is a test, not a regular use case for me 😉 and get the right number atleast 50% of the time, its a FAIL.

My life is too rushed, too busy, too many calls to be faffing around with both hands, head dug into my phone screen.

Lastly, there are other more subtle problems– Why do I have to go back to the SETTINGS screen to do basic config changes which I should able to access from with the current mode? Why cant I add a photo into an email, FROM the email I’m writing, rather than START from the photos gallery?…..I could go on.

The iPhone is already hailed as the coming of the new messiah. In many ways it is, but I’ll wager now that given how closed Apple has a tradition of being it will never dominate the future of the smartphone market, atleast not in terms of number of handsets. For that you should look to Android, Googles new open alliance. If it is truly open and is embraced by operators -mostly likely out of desperation in retaliation to the iPhone- then it will most likely trounce the iPhone.

Currently, I’ll have to carry my beloved Crackberry 8800, the best phone Ive owned in 5 years, and find space in my clothing for the beautiful but flawed iphone, too.

  • Want to know about phones? use GSM Arena – fantastic free and well updated resource on phones old and new. Not an ad, I’ve just used it for years and its a great site!

The Mobile Web Existed Without The iPhone …and still does

This is an extended article, to an original shorter response I made to Roberts post here.

The iphone is without question, a game changer for mobile internet. It has woken up not only VCs to the mobile internet, but given the often arrogant and lacklustre stakeholders of the entrenched mobile industry a serious kick up the arse. I think the iphone is great; but you cannot get away from the fact it will remain a tiny percentage of the mobile market for many years to come.

Should VCs invest in iphone-only startups?

What I took away from the Mobile Web Wars last Friday, before the August Capital party, was that VCs might not invest in an iphone-ONLY startup. Im not surprised. They estimate 10 million units by early next year? Thats very small numbers if you’re going to ONLY serve those customers. It’s less than 10% of Facebooks user base. Infact, name one company which has sold for big bucks which has only 10 million users? That would mean a startup would have to reach 100% user takeup for their app to be highly valuable.

I have been frustrated, as many before me, that VCs have the particulars they do about investing in certain types of businesses and have the expectations they do for success – which in turn demand a big market and big ideas which can make big money; but I understand, because that is the game they are in. If you have to make your money back on your fund from only 5% of your portfolio, you have to make sure that probably 100% of your portfolio has atleast the probable chance of making it big – i.e. a 20, 50 or 100 times return.

We [my company, Rummble] are developing an iphone app for Rummble. Why? because we know we can deliver a compelling user experience, that it will work when users install it and that iphone users are typically early adopters or gadget lovers who embrace new technology. They are IT literate and are heavy web users. With an iphone, they take that mobile.

However, we’re also launching a Java app, to serve a vast block of the mobile user base out there, who have phones which will run Java apps.

Startups must consider carefully what I call the three R’s of mobile development: Reach, Resources, Return.

  1. What reach does the platform youve chosen to develop on, give you?
  2. What of your precious resources will it take to develop and support that platform? How does that Reach/Resources calculation look?
  3. What return does your target platform represent? i.e. how will you realise a return, where is the platform most popular, will stakeholders of that platform prevent you from (or take commission from) you realizing a return?

Consequently, bloggers – especially those with the ear of the startup community – should encourage startups to invest their development resources VERY carefully; for example, Google Gears will be supporting many platforms – I guess including iphone – and if they deliver on their promise, provide standardised hooks into the hardware, from the browsers, to access location api, camera, filesystem, etc, from the phone web browser.

The Valley cant afford to be so introspective with mobile, as it has been able to with the traditional Internet

Lastly, as a European, the valley – and many of its bloggers – are notoriously U.S. or atleast Western centric. The iphone IS FANTASTIC! I agree it is! But look outside your own back yard – Japan has been doing amazing stuff on mobile, without Apple, for a long time. India is skipping fixed line internet and doing all sorts of stuff from their non-Apple mobile phones. I’ve been using the mobile web on my Blackberry and before that on my other phones, for years.

The point is that people talk as is the mobile internet didnt exist before the iphone; and maybe for those people as individuals it didnt. But for millions of people it has – and although without question the iphone provides a fantastic user experience (its main reason for its success IMHO), it is expensive, proprietary and has a small install base. That said, I’m waiting for my upgrade to the 3G version 🙂

The mobile internet IS the internet of the future

The mobile internet will, in the future, dwarf the fixed line internet and become the norm. It will make the fixed line internet (and I believe, most laptops) seem like the quaint anomalies of history – where the internet began. You’ll come home, plug in your 1 terabyte iphone-equivalent to a large screen and keyboard and simply unplug it and leave the house or office when you go. I believe I’ll be doing this within 5-7 years.

Those startups keen on building a global – or even U.S. – dominating consumer brand for their service, would be wise to look at what is going on in the rest of the world, where in some places the mobile internet is already ahead of both the U.S. and Europe.