Ganging up with Google Android against Apple's iPhone
Apple is currently king of the smartphone world. The iconic iPhone has doubled in market share since 2008, rising to 10.8 percent in the first quarter of 2009 from 5.3 percent in 2008, according to Gartner.
But Apple may be in for a Microsoft moment. Just as a steady stream of well-heeled competitors like IBM, Red Hat, and Oracle are aligning themselves with Linux as a way to undermine Windows in servers and desktops, so, too, are crowds starting to form around Google's open-source Android in the smartphone market.
Linux: the bete noir of proprietary operating system vendors.
Samsung, LG, Motorola, and others are placing increasing stakes on Android. Indeed, BusinessWeek reports that Motorola has "one bullet left in its gun" and this bullet is Android. It can't afford to let the "iPhone killer" draw blanks. "Motorola's handset business depends on Android," as ZDNet's Larry Dignan suggests.
Importantly, Android is growing in the area that defines the iPhone's success more than anything else: applications. BusinessWeek's Stephen Wildstrom says that "Android is now a contender" in large part due to its growing array of third-party applications:
The Android Market is surprisingly well-stocked, considering the relatively small number of Android phones in use....[W]ith support from Google and from handset makers desperate to come up with something that can mount a serious challenge to the iPhone, Android could become a major player.
And not a moment too soon. With Apple iPhone margins as high as 60 percent by some estimates, the market already seems ripe for an open-source competitor to bring prices down while improving choice. I love my iPhone, but as Android-based phones become smarter and slicker, I just might change camps.
It appears that I'm not alone. The "droids" are popping up everywhere:
As with Linux in the server market, the smartphone industry is filled with second-place competitors. Most of these have a strong interest in banding together behind a Linux-based solution, in this case Android, though there is also momentum for Linux-based LiMo and non-Linux Symbian.
It may take a soup-to-nuts, integrated solution like the iPhone to create a market, but it takes an open-source solution like Android to foster choice and lower costs.
Game on.
Follow me on Twitter @mjasay.
Matt Asay brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. Matt is vice president of business development at Alfresco, a company that develops open-source software for content management. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. You can follow Matt on Twitter @mjasay. 
while all the other windows äh android handset makers will be committing a collective suicide in the long run at a fierce rate to the price bottom (as you can observe at the moment in the pc-realm), apple will reap hordes of cash quarter after quarter.
history repeats itself and it feels good to be with aapl and the winning business-model.
There will be a shake-out of device makers. Android will likely have a niche at the low end (a big niche). Apple, RIM and Microsoft will continue to fight at the higher end. The question is where Nokia will fall.
And ellroy is right - Android will simply lead Apple's competitors over the cliff as they battle each other in the self-destructive quest for "lowest price."
The Apple business model is often profitable but self-limiting and has proved itself to be every year of Apple's existence.
Apple has one tenth the market share of Microsoft, but its worth is 69% (!) that of MS. It is worth considerably more than Dell and HP combined. It is bucking the trends both in computer sales and smartphone sales. It's is one of the healthiest and most valuable companies on the planet. Where do you get self-limiting!!!?
The Apple business model has created a $6 billion cash cow out of nothing in two years and already captured 10% of the smart phone market is still pretty much unlimited in growth potential and has proved itself in only two years of Apple's existence.
There, I fixed it.
1) Apple has only one iPhone, for all intents and purposes. While Android, Palm OS, and other smartphone OS might bring better phones and actually capture more the market, they will be diluted and so it will seem like they have less of a market share. No one phone is going to be able to take the iPhone market share because of that. Doesn't mean they aren't successful, but the iPhone will stay the dominant single smartphone for awhile I think
2) The tight integration Apple has with the iPod Touch and the easy flow from one to the other will allow them to continue to dominate. You don't have to be a iPhone user to use the App store. This allows Apple's App store an advantage that no one else in the industry has. It means a broader base for developers which means that their App store is going to be more developed than anyone else.
That's just my opinion.
Device manufacturers using Google Android must address the non-phone market. I believe Creative is actually working on such a device, but it's vaporware until it ships.
Also, it's worth pointing out that Apple has the iTunes Store (music, video, etc.). It's not just about the apps, it's about ALL digital content. No one is even close to the iTunes Store. Remember that the iTunes Store drove iPhone/iPod touch sales for a whole year.
While sales of the traditional iPod models is now declining, owners of those devices already have a pre-existing customer relationship so when they upgrade to the iPhone/iPod touch, the switch is pretty seamless.
The Android Marketplace will have to evolve into a big box store like Apple's iTunes Store and think about the big picture, beyond peddling smartphone apps.
If AT&T is unwilling to compete with others for applications and services tied to those applications then Apple needs to open the iPhone to all services. Apple's biggest mistake was not making the iPhone open for all cell services in the first place. Instead their tied themselves to the anchor that is AT&T.
Unless an application is found to be destructive in some way (spyware, virus, etc.) Apple has no business blocking it. We the buyers and user's should be able to decide what we install and don't install on our phones. Apple just needs to make sure that applications behave themselves, meet interface standards and don't do anything to comprise user's data or security.
Robert
The mac equivalent would be: "The application 'Photoshop' can not be accepted because it duplicates the existing functionality of the built in app 'MacPaint'. The apple app review process is Android's best recruiting mechanism.
And I speak from first hand experience. I took the best idea of my lifetime to the iphone/ipod touch first. At 35 days, I don't even have the courtesy of a rejection. But as best as I can read the tea leaves, my delay is probably because I dared to reinvent "MacPaint" [not going to give away anything about my app] (and if successful? I would have simply helped Apple sell more iPod touches, the way developers for years, helped apple sell macs.) If so, my app is headed to Android... and Windows!
In fact, the Android people at Google need to remake the 1984 ad!!!!!
Having a tightly controlled system also has huge advantages that many forget. The customers get quality control, the devs get built in DRM, distribution, billing, webhosting and advertising with an unheard of (before iPhone) 70% profit margin. If you think that's a crap deal, Android, Palm and Zune would love to have you on board. And BTW, they have a lot of the same restrictions because they also have to work with same incompetent telcos as Apple.
But Apple will not let any app threaten the core functionality of Safari, Mail and iTunes on the iPhone. That's just the way it is. Yes, that is a limitation but Apple learned the hard way with MS Office, Adobe Premiere and Photoshop that strategic apps best not be left in the hands of competitors who will sell you down the river come crunch time.
But I would like Google voice on my iPhone!
- by roboticsnerd August 22, 2009 7:58 PM PDT
- I would bet that in the near future Google will have cross functionality between I-Google, and the android platform, and there are loads, and loads of applications for I-Google. also, The My-touch is set up in such a way that it could probably run other phone emulators if someone worked hard enough on it, it might be sluggish but the I/O hardware is there. i would guess that when the Next official Google phone is released that it will start to dominate.
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