iPhone and Android: of integration and fragmentation

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Apple recently announced blow out Q4 2010 results: 91% growth in iPhone sales compared to SPLY, over 4mn iPads sold in that quarter, quarterly revenues topping $20bn and profits over $4bn. Given the negative publicity around iPhone 4’s so-called antenna problems and competition predicting a huge flop, a 91% growth is truly mind blowing. Ditto with the iPad – it has virtually created a new market and forced competition to follow suit with their own versions of ‘iPad killers’. Surprisingly, Apple share price slipped after the results. But then, Wall Street can be cruel.

What caught the attention of tech bloggers was Steve Jobs’ arguments against the Android platform and his potshots against Blackberry (RIM’s response was great). I guess much of this is posturing aimed at riling the CEOs of competing companies. Steve Jobs could very well have refrained from proclaiming that the likes of ‘Playbook’ will be ‘dead in the water’ on launch. He is most welcome to have a view but comments like this have a tendency to bite back. A senior executive at Microsoft called the iPhone 4 ‘Apple’s Vista’ at the height of ‘antennagate’. Steve Ballmer laughed out loud about the prospects of the original iPhone (“There’s no chance that the iPhone is going to get any significant market share. No chance”). Michael Dell’s infamous comment about shutting down Apple and returning money to shareholders must hurt when you know that Apple is trading at $300+ plus today.

Steve Jobs’ arguments (definitely not a rant; it was well thought, cogently put forth) against Android made sense to me. The crux of this argument with respect to developing for the Android market was this: given the proliferation of Android devices (of various configurations across several pieces of hardware) it will be difficult to provide one, consistent experience across all those devices. In contrast, the iOS provides an opportunity to provide one single experience. I am not  a techie, but the argument seems to make sense – at least to the Apple-fan in me. I don’t see the need to try anything beyond the iPhone, even though I have dabbled with Android phones (they were pretty good).  But I think such an argument will be lost on the general public: they would see the presence of so many different phone models with Android as a blessing. It’s a feel-good thing – having choice or at least believing one has choice, even if you have to put up with a bad or underwhelming performance.

In my view, in the long run Android will be prevalent on a lot more devices than iOS. In markets like India, with a booming mobile subscriber base the switch to smart phones will be aided by low-cost handsets which are likely to run on Android. I just hope Apple doesn’t get complacent with its success thus far with iPhone and take competition for granted. The iPhone market share in developed markets is likely to come down – I hope it just doesn’t get reduced to a small, niche market share like the Mac.

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  1. Karan Rajpal Reply

    Android devices provide an equivalent experience at at least 1/3rd prices. Any shortfall is adequately covered by difference in price. Early adopters in apples case have come to be a very large market. Will apple continue to find such a market is questionable. And Will they continue to have enough new features to have existing users upgrade? Apples dominance came at a time when there were no true smart phones. Android on the other hand is. Can apple continue to be value or does It become a luxury like the mac?

  2. Well said! Companies, bah. They should all team up and do something rather than fighting against each other.

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