Is it VHS vs Betamax, Mac vs PC, or Coke vs Pepsi? The current multibillion-dollar mobile-market war is a confusing tangle of software makers, hardware makers, and network operators. This isn’t what a theorists would call a perfect or even very clean competitive market, but it does seem to be delivering a regular flow of better, faster, more usable products to the people of Earth. It’s a privilege to be in it.
This piece is provoked first by the general hubbub; not a week goes by without someone trumpeting a ludicrously-huge number of handsets or activations or subscribers. It got intense enough that Fred Vogelstein tried to clear the air recently in WIRED, ending with the plea “let’s get our numbers straight”.
John Gruber read Fred and wrote “I think the mobile market is going to be more like the console gaming market, with a handful of major players each with a 20-40 percent slice, rather than the monopoly-dominated PC market.”
Then there’s Tomi Ahonen’s typically lengthy and rambling Understanding Smartphone Market Share? Battle not for phones, is for platform! A word about Tomi is in order; many think him completely loopy, and I think he’s spectacularly wrong on many fronts, not least his failure to notice that recent Nokia high-end phones are turds; that Symbian is by current standards stupid and ugly; that essentially all serious phone-based Internet usage these days is sourced from iOS and Android devices; and that “Smartphone”, in the sense he uses it, is a meaningless term. But give him credit, he’s a first-rate stats-and-numbers hound, and often points out things that are omitted from the mainstream Apple-vs-Android narrative. And, it (*cough*) ill-behooves me to criticize anyone for long rambly blog entries.
Anyhow, here are some things I believe.
The Numbers Are Really Big · Insane, I mean. The billion-plus phones sold per year. The number of active subscriptions, which is greater than half of the human population. The number of new Android devices that check in with Google every day. The line-ups outside Apple stores for every new iOS device. The hundreds of thousands of apps. The ridiculous number of new ones that flow into Android Market every day. Everywhere I look, I see something astounding.
This is the big league; bigger today than the computer industry ever was, and growing fast. This is as fierce a concentration of R&D heat and manufacturing virtuosity and distribution wizardry and marketing mojo as humanity has ever seen.
It’s Hard to Measure · So, um, who’s winning? The answer is, nobody knows. To start with you’d have to agree on what to count. Mobile devices? That fit in a pocket? With good Internet access? That include a telephone? Or, looking in a different direction, network subscribers?
And then you’d have to work out who’s playing, actually. We have integrated companies that do hardware and software: Apple, Nokia, and soon, they claim, Samsung. Also players on the hardware-only (HTC and Motorola) and software-only (Google and Microsoft) sides.
Let’s make it simple and focus on the really profitable and interesting part of the market: portable devices that are first-class Internet citizens. Which is to say, anything running iOS or Android.
That ought to be easier to count, right? Apple and Google regularly chest-thump about how many of this was sold or that was activated in any given time period. But the numbers aren’t directly comparable; Fred Vogelstein zeroes in on some of the problems and concludes that iOS is running at nearly 7 million devices a month; his reasoning looks sound. He also asserts that that’s more per month than the Android total. If I say anything on the subject, it might be taken a little too officially, so I won’t.
And it’s more complicated than that. Quite a few (don’t know the number) of those iOS devices are replacing existing iOS devices; more so, I bet than is the case for Android (don’t know that number either). But then some of the devices that have been replaced are sold on Craigslist or given to Aunt Effie or whoever (don’t know that number either).
So I’d rephrase Fred’s plea: “Let’s get the numbers right, and be honest about it when we can’t.”
My Take · Me, from what I see, I think that the number of new iOS users per month is huge, and the number of new Android users is also huge. I think who’s ahead varies from month to month and place to place.
Most important, I think that both the numbers are too big to ignore, and thus the near and medium term futures of both those platforms are assured.
Who’s Number Three? · I’ve asserted several times in this space that two is probably not the ideal number of mobile-software platforms. So, who’s next? The candidates are Symbian, Blackberry, Windows Phone 7, Bada, WebOS, and Meego.
What do you think? I’m rooting for WebOS or Meego to become a player, but at this point wouldn’t be surprised if it’s a two-platform future for a little while now.
Thus I think there’s a good chance that while Gruber’s right about the no-monopoly bit, he may be wrong about the several-times-20-40% bit, at least in the Net-phone market: for the next little while it’ll be two players, with market shares something like 80/20 or 60/40 or 50/50.
The Networks Matter Most · Whatever you think of Tomi Ahonen, he makes one really important point: Having good hardware and software matters; but having good network partnerships maybe matters more. For example, if you’re thinking Android-vs-iOS in the US market, you totally can’t ignore the AT&T-vs-Verizon side of the question.
This is one factor that might bring a third platform player into a position to compete respectably with iOS and Android; in most markets there are more than two network operators with substantial market share, and since they mostly offer about the same service quality at about the same price, software platforms are among the few tools they have to differentiate themselves.
Cheap Phones? · Whether you call it a Smartphone or an App phone or an Internet phone, you’re typically talking about an expensive high-end device. Which, despite all the impressive numbers, is a small corner of the global phone market; the volume and the head count is in the phones owned by the people whose income tends towards the world’s average.
So far, none of those are very Internet-enabled. iOS will never address this market unless Apple makes a conscious decision to shift its strategy away from profit maximization to market-share growth. I sure wouldn’t if I were them.
Android might. It hasn’t so far, because of a conscious strategy so far to aim Android at the high-end market; it seems a no-brainer that the best way to establish a platform is to grab the high end and then migrate down, rather than the other way round. Moore’s Law, y’know.
These people may not spend as much per person per month. But in aggregate, they simultaneously represent Internet phones’ greatest growth opportunity, and their best chance to improve the planet. So I’m waiting for the day when we can aim Android at the rest of the people in the world.