asymco

One thing I've wondered though is what % of users of smartphones will actually use them as designed, i.e. more than just for calling, texting or email. Although hard to measure (sometimes through the proxy of web usage) isn't it more important to measure the true usage of smartphone features? Calling, texting and emailing is impossible to monetize for manufacturers (carriers can) whereas app stores, in app advertising and in app purchasing are where vertically integrated manufactures can add revenue and hence profit. Even if iPhone caps at 20% if it's actually engaging users at a much higher percentage than others (50% or higher based on web use and app downloads) then by design AAPL wins the race. I personally think you're being too conservative at 20% as well. As the next wave of smartphone buyers jumps into the pool although their first smartphone will be a major change, they may subsequently want the one that they see their friends and colleagues with engaging with more.

"I still hold that 20% smartphone share is possible for the iPhone."

I think Apple has much higher aspirations than 20%.

First, in 2010 Apple discovered that more people wanted iPhone 4s and iPads than they could make. This despite the Antennagate scandal and the fact that the iPad was a brand new product in what was essentially a brand new category. I don't believe Tim Cook will ever let that happen again. He's learned his lesson. If the market is growing at 70, 80, 90 percent a year then Apple's productive capacity needs to grow FASTER than that.

Second, the Apple lineup is now almost an integrated whole. People are not going to own an iPod Touch, an iPhone or an iPad. They're going to own them ALL. The iPod Touch and the iPad virtually own their categories. There is no way that they are going to leave the iPhone behind as they scale to greater and greater market heights.

Third, we still haven't seen what the iPhone can truly do. Its been constrained by carriers. It's been constrained by production. It's like a high performance race car that is being run on cheap fuel and driven on unpaved roads. When the playing field is even – when Apple can make all the iPhones the world desires and sell them on all the carriers that desire to sell it – THEN we'll see just how far and how fast iPhone sales can go.

I think it's OK to compare iOS numbers to Android numbers, but those doing the comparisons (and reading them) must realize it cannot just stop there. The reason is that the ability of individual manufacturers to make a healthy profit is going to determine who can stay in the game, not how much overall market share Google can claim. You had a post a while back which stated that those vendors who are flocking to Android are, almost by definition, the market losers. I think what drove Nokia to Microsoft (besides a sudden, coincidental influx of ex-Microsoft execs) was, in part, a desire not to be lumped into that group. All Google has proved is that by corralling enough losers the rancher can rack up some decent numbers. But which cows will be able to survive?