Back in January, I wished the iPhone a happy 5th birthday — and warned that its days are numbered. The comments, as they are wont to do, turned into an iOS vs Android flamewar. Commenter James B wrote:
Look at Apple’s marketing materials: the main marketing drive of the 4S is Siri (software). The 4 can run Siri – jailbreakers have proven that – but Apple doesn’t allow it to…because they’d sell less 4S’s. Screen DPI is unchanged, screen dimensions are unchanged. Camera resolution is up, storage is up (both standard things to increase in a new product cycle). The 4S now has a dual-core chip…like every Android phone released in the last 3 months. It’s still running 3G when every carrier is advertising their 4G networks and phones, and will be for a year. The 4S was not revolutionary from a hardware perspective, it was evolutionary, and their main new feature was software.
Once you start to understand that this is a software business, you will easily see where Apple is making the mistakes that will cost them this market segment in the long run.
Well, we’re not to the “long run” just yet, but I did ask James to “C’mon back on the evening of [April] 24th, and we can talk all about dying platforms.” He didn’t come back, despite a fairly lengthy post here yesterday concerning Apple’s quarterly results.
For the the iPhone, however, the interesting bit isn’t that profits were up 88% over a year ago — although that does seem like pretty big news for a company that is “making mistakes” which will “cost them this market segment.”
No, the interesting thing is how Apple’s Android competitors are doing. Former smartphone darling HTC reports that profits are down 70%, “thanks largely to the launch of Apple’s iPhone 4S.” Samsung is the distant Number Two in smartphone profits, but even second place might not mean what it used to:
Verizon, meanwhile, said it sold 6.3 million smartphones, 3.2 million of which were iPhones, over the quarter. More than half the smartphones that Verizon sold were iPhones. Verizon, too, posted healthy mobile data revenue of $6.6 billion.
AT&T posted an even bigger iPhone blowout. 75% of its smartphone activations went to iPhone, and more than half of all its activations were iPhones, including cheap-ass feature phones given away for free. Sprint can be said to be surviving, only because of iPhone sales. But what about overseas, where consumers can be even more price-senstive than here? “Greater China saw iPhone sales 5 times the level of the year-ago quarter.”
Again, not bad for a dying platform.
On the Android side, Jay Yarrow writes that “It looks like the mobile story for 2012 is not going to be so good for Android. It appears as though the operating system is in choppy waters, and is suddenly facing a lot of trouble.” Yarrow makes a good case, and I highly recommend you read the whole thing.
Which brings us to this blurb from GigaOM:
For developers, consumers and even carriers, Android seems irreparably broken. But Google will not fix the platform anytime soon, because despite its fragmentation problems, the company is getting what it wants: massive amounts of user data.
Google still makes most of its money selling cheesy banner ads, and it shows.
Meanwhile, Windows Phone is getting its big push, thanks to Redmond’s deep pockets — and Google’s missteps:
Microsoft has in the past acknowledged that it pays mobile developers to help them create apps for its Windows Phone platform.
That practice is now even more alive and well as both Microsoft and Nokia struggle to make a dent in a competitive marketplace with Windows Phone and the new Lumia lineup, according to the New York Times.
Microsoft has eagerly contributed money to developers, anywhere from $60,000 to $600,000, to help build apps. That’s the type of cash the developers themselves could never raise on their own.
While I like the Metro UI, I remain wary of Windows Phone’s chances after the less-than-stunning debut of Nokia’s top-of-the-line models. “Good” isn’t good enough in this highly-competitive market. Maybe WP8 will be a breakout hit this fall, but it’s far from a sure thing.
The Apple haters seem sure that Android will somehow bury iOS. It’s hard to see how that happens, since iPhone is only half of the iOS hardware ecosystem. The other half is the iPad tablet — and Android has simply failed to compete in that field. Meanwhile, Apple enjoys a virtuous cycle, where iPhone buyers become iPad buyers (and vice versa), and developers enjoy selling to both in a un-fractured App Store.
Me, I think there’s room for at least two major mobile platforms in such a rich marketplace. There will always be Feature Geeks demanding an “open” OS, even if they have to jailbreak their phones to make it that way. There will also always be an even larger market of people who want a nice touchscreen phone they don’t have to pay a lot of money for. Android fits both bills nicely. Windows Phone might find a niche in the bottom end, too, if their OEMs don’t flub another launch. Or maybe Android’s problems will open a door for Redmond to walk through.
The competition, of course, is good for everybody.
But unless Android tablet makers can figure out how to compete, and unless Windows Phone 8 is a hit in phones and tablets, it’s difficult to imagine a scenario where anyone breaks Apple’s stranglehold on mobile profits. Sure, “in the long run,” every platform eventually fails — which includes Android, too. But so long as Apple is making the big money, iPhone will remain alive and healthy.
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