MacDailyNews Take: No, thank Jobs.
Paczkowski reports, “Needham analyst Charlie Wolf says that’s impossible, because the smartphone market lacks the necessary conditions for a winner-take-all outcome. For one thing, the smartphone market doesn’t yet have a so-called killer app, a modern day Lotus 1-2-3 that would tip it towards a single platform. For another, there’s little applications lock-in. Most smartphone apps have very little learning curve and are far too inexpensive to tie their users to any one platform.”
MacDailyNews Take: Google Android offers the same messy, inconsistent Windows PC “experience,” but without any cost savings, real or perceived. Windows only thrived back in the mid-90s because PCs (and Macs) were so expensive; the upfront cost advantage roped in a lot of people, who were, frankly, ignorant followers who did what their similarly-ignorant co-workers and friends told them to do. Microsoft still coasts along on that momentum today.
The fact is: Apple’s iPhone 3G 3Gs costs just $99 and the 3GS 4 goes for only $199 in the U.S. with a 2-year plan. I’d call any Android device the “Poor Man’s iPhone,” but you have to spend just as much, if not more, to partake in an increasingly fragmented and inferior platform. There’s no real reason to choose Android, people settle for Android. “I’d have bought an iPhone if Verizon offered them.” Just look what’s happening in any country where iPhone is offered on multiple carriers. It’s a bloodbath.
Apple offers consistency to developers of both software and hardware. Just look at the vibrant thrid-party accessories market for iPhone vs. the Zune-like handful of oddball items for Android. If you make a case or a vehicle mount, does it pay to make 14 different Android devices that number under 1 million each, or to make one or two for what’s rapidly approaching 100 million iPhone/iPod touch devices? As Apple’s iPhone expands onto more and more carriers, Android’s only real selling point (“I’m stuck on Verizon or some other carrier that doesn’t offer the iPhone”) evaporates. – SteveJack, MacDailyNews, December 23, 2009
Paczkowski continues, “So if the smartphone market isn’t going to evolve into a winner-take-all situation with Android the winner, how will it evolve?
“We believe that Google’s land grab strategy should enable Android to end up with a 40%+ share and that the iPhone’s share could reach 25% as Apple (AAPL) signs up additional carriers,” says Wolf. “Nokia’s (NOK) share is likely to fall from 39% currently to 20%, although over time it could fall even further. BlackBerry’s share should also fall to around 10% while Windows Mobile share should remain around 5%. “
Full article here.
Cody WIllard writes for MarketWatch, “Can you imagine what would happen to Apple’s marketshare if the second-to-the-latest iPhone were offered even at pre-pay virtual network operators like 7-11 and Circle K and so on so that even those folks looking for a free, pre-paid, no-commitment plan could walk out of their bodega with an iPhone for $49? $29? Models at least two generations old could be free?”
“The downside of course, is that taking a marketshare-at-almost-any-cost approach at Apple would hurt earnings estimates for the next couple years and the stock would likely struggle for that time period,” WIllard writes. “But could you imagine the margin leverage that Apple would enjoy in just two brief years from now when their marketshare would very likely be north of 30% for the entire billion-plus unit global cell phone market? 300 million iPhones sold in 2015? Half a billion iPhones in use by 2015?”
WIllard writes, “Assuming Apple’s much more likely scenario of continuing its current policy of taking big money payments to give exclusive rights and still take the market share its going to take, I figure Apple’s a $1000 stock by 2015 anyway. But if they were to go crazy for marketshare and even risk positive cash flows and even dig into some of that $40 billion checking account balance they’ve got, I think the stock might still be at $300 in 2013…on its way to $1500 by 2015.”
Read more in the full article here.
One thing that those old PC days and today’s smartphones has in common is piracy. In those days, everyone who owned a beige box pirated their OS and software so that they only paid for the hardware. Today, Android users are pirating apps and not buying them (even though apps are so damned cheap). One of the reasons why we have the term freetard.
Viruses and spyware will be a bigger problem for Android users for this reason. Considering how much personal information people keep on smartphones, the damage can be significant. I have over 600 phone numbers on my phone, most with home and e-mail addresses. Most people do not take personal security seriously. They risk their friends security as well as their own when they download apps from unknown sources.
No.
It is MDN Magic Word: dead
Short answer is no. Reason: fragmentation. Linux supposed to take over desktops by now. At least that’s what the big hoopla was about Linux desktops 10 years ago. Linux is nowhere in desktops, despite the fact it’s free. Reason: fragmentation. All of those hardware vendors that use Android platform will tweak the Android just a little bit to prevent customers migrating to other hardware makers that are using the same platform.
How long will Google support both Android OS and Chrome OS?
Well it is funny how even smart people get sucked into the idea that they want to prove they were right in the first place, even if they were wrong. Steve Jobs is a classic example of this. They had the chance to sign Verizen right from the start, but for some STUPID reason, call it hubris, they didn’t, and they GAVE Google the chance to come in and gain a nice sizeable chunk of marketshare from which to grow. Whatever.
The “STUPID reason” would be that Verizon turned Apple down. AT&T decided that they were willing to do the consumer-friendly things that Apple wanted, and Apple still has a nice sizable chunk of marketshare.
“a marketshare-at-almost-any-cost approach at Apple would hurt earnings estimates for the next couple years…,” WIllard writes. “But could you imagine the margin leverage that Apple would enjoy in just two brief years from now”
Oh yeh, selling for dime store prices has served Dell and the rest of the race to the bottom crowd really well. Okay, Apple would be selling maybe 2-year old models of excellent phones for low prices. But I don’t think that is enough of a difference to espouse this as the “Next Great Move” for Apple.
@ G Spank
Wow! You sure are an idiot!
I’m probably going to look like an idiot here, but I had a hard time determining where the piece ended and MDN’s take began. Or vice versa…
Release the Kracken Steve!
@G Spank:
Sorry, but you’ve not studied the history here. Remember that originally Apple took a percentage of each iPhone user’s monthly bill from AT&T. They eventually figured out that that system was just too complicated (even Apple has to learn the hard way sometimes). Verizon flatly refused to go along with this initial revenue sharing. Plus, 90% of the world is on GSM, so it made much more sense to make one version for (almost) the whole world when you’re developing phone which created such a massive paradigm shift in the cellular world.
Three years later they can now make a CDMA version, but they will have to distinguish it physically so people don’t buy used iPhones for the wrong network (this will probably happen anyway- this incompatibility is another reason Apple has stayed away from Verizon/Sprint for so long).
Let’s say this joker’s predictions come true, regarding the eventual “smart phone market share.” iPhone at 25% would mean Apple is making one-in-four of all the smart phones sold worldwide, with extremely high profit margins. Meanwhile, “Android” at 40% would be split up among ten or more manufacturers, all savagely competing with each other (offering things like two for one deals) and making much lower profit (if any) per unit.
> Will Google’s Android OS do to the smartphone industry what Microsoft’s Windows OS did to the PC industry
Actually YES. I don’t know about the eventual market share based on OS, but Android will turn mobile phones into indistinguishable thin-margin commodities; the main winners will be the wireless carriers and Google (if they manage to monetize “free” Android effectively). This is what Microsoft did to the PC industry. Meanwhile, Apple will continue to offer distinctly desirable (and profitable) iPhones to their share of the market, just as Mac OS X allows Apple to make Macs distinctly desirable (and profitable) personal computers. iPhone with iOS, only from Apple…
Also, this article ignores iPod touch and iPad, which also run iOS. iPod touch has no current competition (unless you call Zune HD competition) and iPad has no competition except some ugly Windows stylus-wielding “convertible” tablets, numerous “vapor” tablets that are “coming soon,” and a few Android-based shrunken tables (big smart phones). If you count them along with iPhone for mobile-OS market share, Apple has a much larger footprint.
Stock analysts and tech pundits have never understood the implications of Apple’s products, not now in the mobile space, nor back when they all said Apple was going out of business. Thank heaven for these idiots; by pushing down the price of AAPL in 02, they helped turn my nest egg into a fortune.
How about FaceTime!
“Will Google’s Android do to smartphones what Microsoft’s Windows did to PCs?”
Nope. Completely different markets and devices.
1. Microsoft had a stranglehold on the enterprise market which at the time made up the vast majority of the PC market share. This was primarily due to overall hardware and support costs. That monopoly in the enterprise moved into the consumer market as PC prices fell.
2. People cannot build their own smart phones and install whichever OS they want. Which was a huge catalyst for helping Windows enter into homes; every corner computer store could build their own Windows PC’s and offer support for them. These shops popped up all over the place in the 90’s.
3. The Android platform is much more fractured than Windows ever was. Microsoft had an interest in making sure new versions of the OS were backwards compatible with older versions and ran on older hardware. Google and the carriers have no reason to care about this. Google gets ad revenue regardless of the version, and the carriers have a larger interest in getting users to upgrade to newer phones and plans rather than updating the OS on old hardware.
MDN you keep trotting out this “Just look what’s happening in any country where iPhone is offered on multiple carriers. It’s a bloodbath.” and citing the UK. Sorry, but it ain’t no bloodbath. Android phones are selling well here and gaining ground fast.
I think the growing perception is that AT & T sucks, Apple’s got a problem Consumer Reports can’t recommend, there’s an inexplicable anti-Apple bias- despite the fact that it is Google who’s the Evil One, and Android is the future regarding choice and even , eventually, apps.
This is all totally BS, of course. But I think most people in this country now are idiots, anyway, and I’ve been very happy with all my Apple products no matter how many they’ve sold.
@ G Spank:
Apple offered the iPhone to Verizon, but Verizon insisted on restrictive measures like installing its own software on the iPhone, and Verizon would not sign up to carry the iPhone sight-unseen.
ATT didn’t do the “consumer friendly” thing; ATT did the smart investment: It agreed to carry the iPhone sight-unseen and even to try a new compensation model Apple was pushing (which was dropped a year later, mainly because it and exclusive deals were ruled illegal in European countries like France). ATT took a chance with Apple, but really ATT took an opportunity for itself to gain millions of smartphone customers who could not switch to Verizon. ATT was playing the subscriber number game, and it still is.
Apple now has the power to refuse Verizon’s demands, although both companies need each other.
@BSOD
BINGO. Nail on the head.. But that will not stop people from being stupid.
Just a thought,
en
One would expect that someone paid to opine for money about such things would have some insight, experience and knowledge about the subject instead of just pulling it out of their arse.
This isn’t 1998, Apple is a healthy company and Google is going to be facing down some serious lawsuits concerning infringement of software patents owned by Oracle & Larry hates Google and has billions to burn- unlike Sun, the previous owner of said patents. He has filed not for damages but a recall of the Android “OS” (read theftware). Apple and others could stomp all over Google whenever they are ready.
Google is doing what MS did. Copying the look and feel of the UI and giving it out free. Undermining companies that have to make a profit for products in order to continue to be in business.
hell no. iPhone 4 stopped the android trend in its tracks. one quarter of BOGO Verizon Android phones does not a trend make.
Android could never get the kind of market share that Microsoft Windows did. Windows had absolutely no competition to speak of. Microsoft would bully or buy out any company that stood any chance of threatening its empire. Google and Android isn’t powerful enough to do that. So, Android will never see any 70-80-90% market share because there are enough competing OSes that are pretty close to Android’s capabilities. I’ll be happy to see the iPhone hold 20-30% smartphone market share. Apple can easily make a lot of revenue off that percentage for years to come.
MDN: “Just look what’s happening in any country where iPhone is offered on multiple carriers. It’s a bloodbath.”
I did and cannot find any numbers.
Please direct me to a story with countries that have the iPhone on multiple carriers and show sales stats.
This would be great to make the Android fans shut up.
No. Because there already is a universal platform, and it’s the browser.