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Two turkeys don't make an eagle, but no penguin will ever soar.

Vic Gundotra of Google tipped off the world two days in advance that on Feb 11 Android would play no part in Nokia’s strategy. To be sure, Elop said that Nokia didn’t choose Android because of “differentiation challenges and commoditization risk” (begging the question of how these challenges and risks are mitigated by licensing another openly available OS).

But I won’t weigh the merits of one module vs. another. Rather, the more pertinent discussion should be on why license instead of build. Clearly, Nokia threw in the towel. Not because they could not build, but because their building processes could not create greatness.

But can greatness ever come from modularity? I’ve argued that it can’t. I’ll maintain that argument as long as what is being built is not good enough. In other words, as long as innovation remains relevant, improvements will be absorbed and rewarded. Once innovation exceeds what can be absorbed, the basis of competition will shift to convenience and price which are best served with a modular business architecture.

Android is a fast follower. The first Android prototypes looked like Blackberries because that was the input paradigm of 2006. When capacitive touch was shown to be a better input method, Android reacted swiftly. When app stores created a new medium Android reacted swiftly. When the iPad demonstrated that computing can be done in new settings, Android reacted. At such time when there will be nothing to follow Android will be the king of the last commoditized innovation, but as long as there is something worth inventing Android will be there to reproduce it.

This is not a judgement, but an observation: Nokia and Microsoft may not make an Apple but neither will Android ever create the future.

  • http://maheshcr.com/blog Mahesh CR

    "In other words, as long as innovation remains relevant, improvements will be absorbed and rewarded. Once innovation exceeds what can be absorbed, the basis of competition will shift to convenience and price which are best served with a modular business architecture."

    In those two lines are perhaps an entire semester worth of product/market strategy lessons. Horace you should start a business college!

  • Benedict Evans

    Yes, Andy Rubin should be happy this morning. Now he has two platforms to copy ideas from.

  • noogie60

    I wonder if one day if Android could one day become like Frankenstein and attack its creator.
    As most of its code is open source I wonder how likely is it that someone will come in, fork Android and build a better more innovative OS from that?
    In fact I wonder why Nokia didn't go down that path – it would have left them with a greater control of their destiny than a tie up with MS

    • Ted_T

      Excellent question!
      The best answer I can give is that Elop has no faith in Nokia's in-house development ability.

      • Sam

        A better answer is that Elop is a Microsoft guy. And Nokia just replaced their head of US operations with another Microsoft exec. This was essentially a takeover of Nokia by Microsoft, not a "partnership". There was zero chance that Microsoft would install Android on their Nokia division's handsets.

      • Barney

        An even better answer is that Oracle's patent infringement lawsuit against Google's use of Java in Android is well funded, will go on for a long time, and stands to warn off potential suitors like Nokia on attempting just such a thing.

        Microsoft is free and clear and has a much better path towards localization for the emergent markets Nokia is invested in.

    • PatrickG

      I think that Nokia could look at forking Android – or creating another Linux fork to rival Android, but they were/are running out of time. They hoped to slow-down Apple's incursion into mobile technology with the lawsuits, which has not (yet) proved successful. So they had to think and think fast. How to regain smartphone segment parity in the short-term to buy time to develop for the long-term especially since handheld mobile computing is the next wave. Become another mildly differentiated/commoditized Android handset maker? Nope – not going there: the slope under the race to the bottom is much steeper there. Apple won't partner with them – the only one left was Microsoft. But the night is still young and the market still unsettled. Nokia would be smart to hedge their bets for the long-term, OS-wise.

    • famousringo

      In some sense the monster is already loose. There are Android variants in China with no Google search or other Google services.

      I don't think they could be called better or more innovative, though. Yet.

  • rattyuk

    Out of interest do Vic Gundotra and Tim Bray's tweets open them or the company they work for to some kind of SEC investigation? These were leaks.

    • asymco

      Plausible deniability?

    • hahnchen

      Seriously? No, no they won't. They knew what was happening inside Google, and guessed what was happening inside Nokia. Which just confirmed what everyone else was guessing.

      That Nokia were to give up.

    • http://twitter.com/UtestMe @UtestMe

      Investigate leaking metaphors? Don't think it's possible

    • rattyuk

      How about being taken down for being really really really smug?

      • Joe_Winfield_IL

        Unfortunately, it seems par for the course. SJ was widely criticized for his "rant" on the earnings call a few months back, in which he trashed the competition. But he was speaking in fact, using real data and user research. By the end of his comments, I had decided it was time to buy more stock; he had laid out a case for the future domination of iPad that made sense.

        By contrast, the snarky comments out of camp Android are immature at best. I'm not sure what these managers hope to achieve by sending out 140 character messages teasing two of their competitors. There is no strategic or tactical purpose to send out barbs, especially 48 hours before the news officially breaks. It is the equivalent of an athlete trash talking before a big game, and Google should chastise its employees for their stupidity.

      • cjackson

        To me it sounded more like a petulant child lashing out at someone who spurned it.

      • Joe_Winfield_IL

        Good point. I was searching for the right metaphor, and you nailed it. With a 2 year old at home, I should not have struggled to come up with petulant child!

    • 2sk21

      It does seem to be very unprofessional behavior from Google however.

  • sha

    "I’ll maintain that argument as long as what is being built is not good enough"

    a bit of personal judgment there, careful :)
    some people prefer WP7/Android over iOS you know (not much I agree but you get my point)

    • asymco

      My point is that iOS is not good enough. No phone is.

      • newtonrj

        or – the art of innovation is superior to the pursuit of profitability, popularity, & production. Cheaper paridigms exist, larger competitiors thrive, and scaled manufacturing techniques trump those of Apple. But the sexy high-ground belongs to Cupertino not Mountainview, Redmond or Espoo.

  • Luis Masanti

    In the May 1968's students and workers revolts at Paris, the graffitties written in the walls told the messages that that popular manifestations beleived.
    One of my best is: "Action should follow creation, not reaction."
    That reflects Apple vs. almost-all-the-others behaviours.

  • timnash

    Nokia needed a response to Samsung's expansion plans. WP7 could be a way of showing carriers that Nokia can still engineer good smartphones and take advantage of Microsoft's marketing budget to reestablish the Nokia brand in North America.

    If MeeGo gains traction on tablets and Intel makes a good smartphone chip, then Nokia can abandon WP7.

    • http://twitter.com/aegisdesign @aegisdesign

      In the meantime, all of Nokia's developers on Qt have given up on Nokia.

      • http://twitter.com/fteoOpty64 @fteoOpty64

        Yeah, they had the time to make something useful out of it. And what did they come up with ?. This is a crying shame.

    • http://twitter.com/fteoOpty64 @fteoOpty64

      "If MeeGo gains traction on tablets and Intel makes a good smartphone chip, then Nokia can abandon WP7."

      No chance!. Meego has not made any significant progress for a long time and cannot make mucj headway if the reference hardware is no where near even alpha form!.

      • Peter02l

        You are absolutely right. Meego cannot deliver because Intel cannot deliver in the mobile space.

  • Ted_T

    Horace, how do you think this deal with alter Android's future?

    Clearly had Nokia gone with Android that would have been a huge plus for it. But it is not clear to me how this alliance vs. Nokia going it alone changes thing for Android.

    • dchu220

      Nokia has a huge channel distribution network. Once you get out of the developed countries, Nokia is everywhere. Nokia could really help WinMo fight Android in the lower end of the smartphone market.

      • not_a_chance

        Not a chance…
        Nokia's smartphones running Windows Mobile will be more expensive than the slim versions of its competitors in the developing world because of hardware requirements. The only market segment where Nokia has a slim chance of success with WinMo is the Business space in the US and that's a big question mark.

      • xtarburst

        +1 for that, but remember this Nokia + Windows could mean that by pushing a lower specs requirements will boost WP on the lower end, and that's like lifting a finger for Nokia, WIndows knows this and there's possibilities.

  • Matt

    Google has one area in which it innovates and it makes its mobile platform unique. Cloud services. Android has the best access to cloud services as google is one of the best providers. This is an important advantage going forward and will be android's key differentiator.

    • Hamranhansenhansen

      Most of Google's cloud services are available on iOS, and the ones that aren't have Apple analogues. Android's key differentiator is cheap.

      • Sevket Zaimoglu

        The existence of Android ensures that Google's services continue to be available on iOS to customers, that Apple cannot arbitrarily lock Google out of its closed universe.

        Furthermore Android is not cheap. Google Nexus S produced by Samsung sells for £499 in the UK, the same price for an iPhone 4. A dual core Tegra powered LG Optimus 2X or Motorola Atrix would be more expensive than an iPhone and people would still buy them, because they are far more superior.

    • Coward_the_Anonymous

      Google has got good ad-cloud with ad-services accessed through adaware.
      Most people don't care yet, but it will change in 5-15 years.

  • http://twitter.com/hugoboom @hugoboom

    Vic Gundotra's comment left me thinking of Ben Franklin's comment on the choice of a Bald Eagle as the national bird of the United States of America. I wonder how Gundotra's comments mesh with Franklin's words …

    “For my own part I wish the Bald Eagle had not been chosen the Representative of our Country. He is a Bird of bad moral character. He does not get his Living honestly. You may have seen him perched on some dead Tree near the River, where, too lazy to fish for himself, he watches the Labour of the Fishing Hawk; and when that diligent Bird has at length taken a Fish, and is bearing it to his Nest for the Support of his Mate and young Ones, the Bald Eagle pursues him and takes it from him.

    With all this Injustice, he is never in good Case but like those among Men who live by Sharping & Robbing he is generally poor and often very lousy. Besides he is a rank Coward: The little King Bird not bigger than a Sparrow attacks him boldly and drives him out of the District. He is therefore by no means a proper Emblem for the brave and honest Cincinnati of America who have driven all the King birds from our Country…

    I am on this account not displeased that the Figure is not known as a Bald Eagle, but looks more like a Turkey. For in Truth the Turkey is in Comparison a much more respectable Bird, and withal a true original Native of America… He is besides, though a little vain & silly, a Bird of Courage, and would not hesitate to attack a Grenadier of the British Guards who should presume to invade his Farm Yard with a red Coat on."

    • KenC

      I thought the turkey's bravery was more like stupidity!

  • Fred

    The RF cultured companies cannot compete with the software Computing companies, as mobile voice and text shifts to mobile computing, applications, and services.

    Nokia is an RF company. Microsoft is a Computing company. Hence the marriage.

    At its essence, RF companies live in a world of H/W design,decibels, intermodulation, signal to noise ratios, fade margins, and front ends. Computing companies live in a world of C, C++, objective C, server farms, databases, the WWW, and an Internet of things, applications, and services.

    More examples of RF companies: Motorola Mobility is an RF company, struggling to become a profitable mobile computing company on a borrowed platform; it’s an intermediary and fleeting strategy at best. LG is an RF company without profit. Samsung is an RF company, which hedges its platform bets. HTC is an RF computing which understood mobile Computing early in the game. RIM is an RF company with email. They are hardware, faced with the prospect of thin and thinning margins.

    Examples of Computing companies: Apple’s core is computing. Google is a computing company. At this point in the ramp up stage of the smartphone S curve, they are the early winners in mobile computing, applications and services, although Google still needs to produce a profit from mobile.

    Microsoft is a computing company. HP is computing company. Can they catch up to mount a threat to Apple and Google in mobile computing?

    As we consider Mr. and Mrs. MFST NOK, some questions arise about this shotgun marriage of necessity. Will the egos and cultures allow for blissful honeymoon and harmony or will it be cat fight? Who will wear the pants? Pa Microsoft has a history of “embrace, extend, and extinguish.” Ma Nokia has history cranking out the volume. Who will dominate? Who will submit? How quickly can they be productive? Can consensus and committees compete against a single, strong willed leader?

    • r00tabega

      Another distinction I noticed in your list: All of those computing companies that look like the current mobile leaders are based in the US. And aside from Microsoft, all are Silicon-Valley companies.

      • Fred

        Yes. The computing companies are in Silicon -Valley. The concentrated and large brain trust of computing resides in the Valley – universities, businesses, and work force. It bubbles computing creativity, innovation, and disruption.

    • davel

      Interesting categorization. However, Microsoft is not really an innovator. They are a follower. HP although it is a computer company is a hardware company and not a software company. So the question for them is will they let PALM follow its whim?

  • http://www.italinteriors.com Grateful

    I started visiting your site a month after it launched and visit everyday.
    After all this time I needed to say thank you!
    Thank you Horace! And
    Thank you to all the readers(excluding the thankfully few trolls) who comment and spark discussion and exploration of ideas. Thank you for all of insightful reflective and inteligent questions.

    When I visit
    I see the chaotic gets organized,
    I see the ignored items being exposed as critical,
    I see the skill of a performer being taking the spotlight not her outfit.

    And most importantly I see, from Horace and readers, a level of analysis with impartiality and tack that has not only influenced by business decisions but has changed my view or approach on many personal desicions.
    I suspect there are many other reader like me, who do not comment but still feel part of, and engaged, in the discussion.
    So again….Thank you!

    Carlo

    • skellman

      Long time reader, first time poster. Could not agree more, Carlos.

    • asymco

      Your words are very kind and appreciated. Thank you.

  • Noori Records

    I've still to see the first iOS device to do everything Android devices do. Android is leading innovation here, not otherwise.

    • Joe_Winfield_IL

      Can you explain further? I'm not saying you're wrong, but a few examples would help.

      • Noori Records

        There are lots of places over the web that write at length about this – just look for any article comparing iOS with Android, and you'll probably get more info than what I'm able to quickly write here. Anyway, when you see things like Motorola Atrix (see this video as an example: http://www.youtube.com/watch?v=mWEvWYbxLEo ) you'll see that Android is not only a "mobile OS", is a "complete Operating System" that can be used to do whatever you want with it – it is an innovation enabler, so those who opt for Android can use the innovations it has and also are able to easily innovate over them. In this (Atrix) case, Motorola chose to use Android as "one OS to fit all uses" (mobile, laptop, TV…) and do so in an integrated way. But others can innovate in other directions… Now if we want to just see "what's available now" by comparing both OS's, then you'll just have to see what features are available in one and another operating system. How's NFC and LTE capabilities in iOS? When will iOS have a decent model of tethering (one you can choose to tether anywhere, to any computer, without having to sincronize your iOS device with *your* laptop with *your* iTunes, and that lets you do things as use your iOS device as an AP)?

      • Joe_Winfield_IL

        The Atrix is an interesting device, and I'm anxious to see how the market receives it. But to compare anything that ANY Android device can do against iPhone is silly. I agree that the breadth is impressive with Android, but Apple has no intention of making 500 different devices to cover every permutation of features possible. By your definition, iOS will always be deficient.

        As for your specific list:
        *Android doesn't do NFC. They will soon, and so will iOS
        *LTE is a carrier function that didn't exist in the wild when iPhone4 came out. It will likely be included in iPhone5.
        *Tethering works today, and hot-spotting is included in the iOS 4.3 beta currently being bug-tested. Sometime very soon, iTunes moves to the cloud. With this move, tethering to any computer will be easy. But the hot-spot feature is easier than tethering in almost all cases, as it does not require a physical connection.

      • http://twitter.com/gravpulldotnet @gravpulldotnet

        Joe, your answers do not refute the fact that Android is ahead of iOS in many areas.
        -Android does do NFC already. My Nexus S does it right now. Vaguely rumored for future iOS.
        -LTE is both a carrier function and a feature of each ecosystem via enabling hardware and software. 4G is available and has been for some time on Android. It is completely unknown when it reaches iOS.
        -iOS devices must be synced via a computer. Android devices can by synced in other ways including through the cloud (I can buy an app on the web-based market and have it sent to my phone) and via wifi (DoubleTwist and many other apps).

      • Joe_Winfield_IL

        *You're right on NFC. I forgot it was Gingerbread; I was thinking it was a Honeycomb feature.
        *LTE didn't exist in June. "4G" is a bogus marketing term, and it means different things to different people. Android had WiMax phones last year, and iOS likely never will. But the first LTE Androids are just now coming out as a result of the carriers' networks going live.
        *I haven't plugged my iPhone into a computer since the day I bought it. I have bought 100% of my apps directly on the phone, as I did with my iPhone 3G. The only time a plugin is required is for an OS upgrade. Yes Android pushes its upgrades over the air, but most phones don't support most upgrades universally. I will take the iPhone physical update with knowledge that my phone is instantly eligible for every update for at least 2 years. The alternative is an Android that requires OEM software updates along with each new Android release.

      • Joe_Winfield_IL

        And for the record, Android has some software advantages. Free turn-by-turn maps, really anything location-based, is a huge plus for Android. Voice features are stronger than anyone else. If you use Google's cloud services and applications, Android is superior to anything else.

        You're digging in the wrong spot though when you promote things like network compatibility and camera resolution. Ultimately, the hardware specs just aren't materially better than iPhone in any meaningful way. Almost anything you can list is a function of timing, with the newest phones better than the ones only 6 months old. If we were having this debate a month into the future, you'd be harping about dual core chips and faster RAM.

      • handleym

        Joe is basically correct.

        Android is ahead of iOS in a lot of small ways when it comes to maps and location, and substantially ahead when it comes to voice.
        On the other hand, iOS is substantially ahead when it comes to media and (though a few might disagree) when it comes to tools, programming, and general developer infrastructure.

        It's true that Google is ahead when it comes to cloud. It's less true to say this is an advantage. Those who love this idea simply refuse to believe that those not in love with the cloud are serious, but I continue to think that cloud can be done a LOT better than Google, and that until it's done better it's not worth the hassle.

        Finally Google has the substantial advantage that it is possible, without going through illegal and problematic conniptions, to get an Android phone in the US that is NOT carrier locked and that therefore can be used with a disposable SIM in foreign countries. I think this is a lot more of an advantage than most people realize. Every American who goes oversees and realizes that everything they have become used to on their phone, from easy maps access to checking weather to replying to email on the go, is no longer available, is a customer who begins to think "fsck this, I don't care whether it's Apple, AT&T or VZW that are morons, why am I putting up with this?"

        (And BTW Horace, can you please fix the IntenseDebate login system? It used to work well, but now after an hour it starts complaining that one has to re-login again, and the procedure for doing that is really crappy and slow.)

      • http://twitter.com/gravpulldotnet @gravpulldotnet

        I think the basic point is that Android/Google is innovative in many areas, including major and important features we all agree on. It is not simply a fast follower although it surely has been regarding some things in the past. Noori's basic point is sound.

      • Joe_Winfield_IL

        There is an odd workaround for the IntenseDebate login. First copy your whole comment. Then click on your user name where it says "Posting as." This will take you to your IntenseDebate profile. Then just hit your browser's back button and paste the comment back into the box. For some reason it works without having to actually log back in, at least on my computer.

      • baychev

        i think you do not fully appreciate the differences between iOS and Android. iOS is a dumb man's OS, it does what steve has decided it should do, if you want some level of customization, you are holding the wrong device. Android on the other hand offers you alot of customization options, if you understand anything about mobile development, you would know that Android allows you to do much more and the apps for it are clearly supperior in functionality and OS and 3rd party apps integration.

        and the feature that the iOS is severely lacking in is voice recognition. phones are about voice and talking, iOS is about looking at it and thinking others are looking at you with envy. iOS is really about a misguided self perception of importance and coolness :)

      • perpetuity

        Mod troll -1

        Do you even get along with anyone?

      • Joe_Winfield_IL

        The benefit of a "dumb man's OS" is that they typical user is happy right away. They don't need a manual explaining the features, and they don't need an online community explaining the pros and cons of different customization options and hacks. Also, most users don't like to force apps closed when closing doesn't work the first time. Most users don't want a task manager showing all processes and power consumption. Keep in mind, these are phones. The typical user is replacing a feature phone with NO customization; the idea of apps is more than enough to make their device personal.

        Fortunately, there exist plenty of options for those who aren't typical. Anyone who wants to jailbreak their iPhone can do so easily, and Cydia is waiting for these users with open arms. Why on earth would Apple choose to design this type of functionality into its devices when 99% of users would do more harm than good?!?

        Trust me, I appreciate the differences. I appreciate that Apple has thought through the pros and cons and built a device that is as unbreakable as possible while maximizing utility. Android is so customizable that it can be used in a car's dashboard or a refrigerator. This stuff is really cool, but it doesn't make for a better mobile computing experience.

        Your final statement is full of contradictions. If "phones are about voice and talking," why are you so concerned with the ability to customize the UI and apps? If the fashion conscious choose iOS devices, great. They represent real, profitable revenue for Apple, and my holdings continue to appreciate. But you are the only commenter on this page talking about "self perception" and "coolness." You strike me as the guy who wears skinny jeans, long hair in your eyes, and stretched earlobes – all just to prove how much you DON'T care about appearances. In reality, the iPhone users are the folks dressed in normal clothes who just want to get things done without all the hassle.

      • baychev

        what, you iphone fanboys are not buying it because it is cool??? you certainly are not buying these phones because they are value for the money, they have reasonably priced plans or they offer you functionality you do not get elsewhere.
        a matter of fact is that the iphone owner's monthly bill is north of $90 which about 2 times the average cell user bill. if you are holding onto your apple 'holdings' too long the situation may get very precarious for you, the world is running out of fools that are willing to spend that much a month. have you heard of virgin mobile? you can get the same plan for $25 a month!

      • Joe_Winfield_IL

        I don't know why I can't resist a troll.

        An iPhone user's monthly bill is about the same as an Android user's monthly bill, and both are higher than average. The typical Android purchase today is a top-end phone, which costs about the same as an iPhone. There are cheap Androids available, but not with the feature set you are promoting. You can't have it both ways, at least not today.

        I have heard of Virgin Mobile, and it's the best deal on the planet for some people. I do international travel for my job, which invalidates the option for me personally. I also talk a lot for work, so I would be using the $60 plan, not the $25 one. But the rates on Virgin speak to Sprint's weakness more than anything else. Sprint figures "something is better than nothing," so they offer amazing prepaid rates on the brand that nobody knows is theirs. Most people haven't heard of Virgin's offerings though. They are loyal to their carrier and willing to pay a premium for the big brand. If they will pay more for the invisible network, it's not a stretch to see the same customers ponying up a premium for the actual device.

        But back to the main topic: the difference between Android and iOS is qualitative, not quantitative. Both will keep adding hardware and software features – these updates drive repeat purchases. Android will do better on plenty of the technology, and Apple will excel at media management. The key differentiator is "customization vs. uniformity." I'm willing to bet that many phone buyers will continue to favor a uniform, usable device over a technically superior device they can customize. I think that most people really don't want to make dramatic modifications to their phones. I could be wrong, but that's my opinion. Now I know yours, and we can agree to disagree.

      • baychev

        i agree with you that android lacks in the uniformity design and as a developer of an app in my spare time, i can say it is pretty annoying to consider the fact that some may have black others white status bar, some may have orange, others green yet others purple highlighting color. this is where google has to force its way.

        i used to have an iphone for 3 years, now i have happily moved to an android and will not be switching back. i can program and i can build upon this platform and the apps(!!!) already there. leaving aside the programing nerdy side, i can basically keep all my messages in one place, if you text alot and sometimes internationally, you'd know what a nuissance it is to have your messages scattered, what it is to be making calls from 3-4 apps and have your call logs scattered all over the place… at the end of the day, i want to be organized and that not to cost me a fortune, one iphone fanboy offered me a $199 monthly data plan from at&t (!!!), for people with like needs android is better, for people with needs that fit Steve's cookie cutter, there is iphone. i still struggle to understand why one would spend $2,000-$2,500 over the life of a contract to have an iphone that meets pretty basic needs when he can buy outright an android and go with virgin for less than half the price. btw, virgin is owned by richard branson, they have frequency leasing deal with sprint and in many countries in europe.

        and indeed i was hesitant to make the switch, i initially thought as well that the menu structure is somewhat confusing, unintuitive and not very well thought out, but i found out the widgets that put at your fingertips whatever you use alot and the fact you can place shortcuts even of menu screens on your desktop, stuff that makes you click alot less than on an iphone.

      • Joe_Winfield_IL

        I'm glad it has worked out for you. I'm too lazy to make the switch I guess. FYI, Virgin Mobile USA is not owned by Branson. It used to be an MVNO, but Sprint bought them out in 2009. They also own Boost outright.

        http://news.cnet.com/8301-1035_3-10297090-94.html

      • http://twitter.com/davidchu @davidchu

        "as a developer of an app in my spare time"

        Developing Android apps?

      • asymco

        Are you suggesting that people envy stupidity?

      • PatrickG

        One of the continuing issues I have with Rubin's Android under Google's control is that there is a definite time-limit to it's successful existence. At such as Google discovers another, better way to monetize the mobile space Android will be retired. Rubin I believe hopes that the platform will be ubiquitous enough to sustain itself somehow if that happens. It is early enough in the game for that to be a possibility. The other issue I have with Android the fact that it is not disruptively innovative, and therefore cannot truly lead by example. Everything about Android in comparison to any other smartphone/mobile OS is either n+1, n, or n-1 in terms of features. It's as if there were a pot of features over at the Mountainview Offices and Andy keeps pulling out a new feature or tweak for the next rev of the OS. We simply don't see – even in the benchmark Nexus devices anything that creates a wow-factor. Even rather interesting approaches like the Moto Atrix is derivative. Simply remove the keyboard and large screen from a netbook, enclose the "guts" in a dockable module with smaller screen squeeze in cellular RF chips. It takes an arguably 21st century device and gives it a retro 20th century twist. This is categorically not the innovation I was hoping for from the pre-Google Android develop promises.

      • http://twitter.com/gravpulldotnet @gravpulldotnet

        The Nexus S voice control and transcription features generate a wow from everyone. The widgets and integration with services like Google Voice are also wow — I can pick up my phone and see the first few text lines of transcribed voicemails right on my home screen. Very useful. I can make cheap international calls, etc. Android's Google Voice integration with mobile phones is a disruptive innovation. GV implementation on iOS was blocked then allowed but is not integrated as it can be on Android. Notifications, multi-tasking, cloud storage integration, tethering — Android led and iOS followed.

        I also think, as you're missing on the Atrix, that we're moving rapidly to a post-PC future where smart phones will eventually have all the computing power, connectivity and storage you need. I just don't understand how the Atrix, which has a blend of mobile and cloud operating systems and seamlessly docks and undocks, is not innovative. Overpriced, for sure. But definitely innovative. What about NFC? Already on the Nexus S.

      • Coward_the_Anonymous

        I don't know why i would want Google to scan my personal/business voice messages in addition to emails, searches, web browse history, RSS….
        When police or FBI would try to do it w/o court order i would sue them, but stupid people allow Google do it for convenience.

    • Pieter

      Not doing everything often is better.
      'Jack of all trades, Master of None' is something that pops into my mind.

      Saying 'No' is hard, but can give a product that is usable, instead of a disorganized 'toolbox'.
      See e.g. http://www.asymco.com/2011/02/09/why-focusing-on-

      • Noori Records

        Do you feel that Android devices are "disorganized toolboxes"? Because my experience is that Android devices, instead, feel like "better toolboxes".

      • cjackson

        I think this toolbar analogy is precisely the reason some people feel Android isn't on the same level as iOS. Most people don't want a toolbox – they want what a toolbox will produce. For those who want a toolbox, Android is clearly the better choice, but that's a smaller market. As someone else said, Android isn't competing on features, it's competing on price and carrier availability.

      • maximus

        Jackson :

        I think Android is winning on features and iOS is winning on usability , somewhere down the road both will eventually offer all of it.Surprisingly Android is winning in numbers : most people want an easy to use phone. So i guess android is closely in on usability with each iteration.

        Apple is winning on eyeballs , delight and money hands down and i guess because of its money power and integration will win in the long term.

    • KenC

      A ticklist of easily implementable features is not "leading innovation".

    • davel

      Please explain how Android leads in innovation?

      Google bought Android in 2005 ( info courtesy of wiki ), the iPhone was release mid 2007. The first Android phone was released more than a year later. Each iteration made it closer to the iphone model. They did away with the keyboards, went touch screen, copied many elements of user interface.

      I do not count support for features like bigger camera, or sd card or whatever. Those are device drivers that have been around for years. let us talk architecture. What architectural elements does Android possess that Apple doesnt.

      There may very well be quite a few. I do not follow Android as closely as others. Apple is also minimalistic and may choose not to include things for various reasons.

      But it seems to me the gold standard of smart phones is Apple not Android. The leaked letter from the new head of Nokia corroborates this.

      Need I mention Eric Schmidt was on Apple's board for years learning about product strategy and placement before the messy divorce?

      • baychev

        google leads in integration.
        if i want a messaging app, i can have 1 that reads, sends cheper(!!!) messages through a 3rd party provider and pops up quick reply boxes on my screen. on iOS i have a green, blue and orage app for each task, and i need alot of a time to figure out the sequence of a conversation that is scattered everythere. this is a shortcoming by design.

        voice. you want to do a voice search, speak a message or email while driving or drinking a coffee, no way with the cool iphone.

        openness of the apps, not only of the software: you can open a feature of your app to anyone else's. for example a travel agency or a sports club can accept reservations from a messaging app while the user speaks some of the details. i can go from a messaging app to google maps, to initiating a call without having different apps blink at my screen, and i can go a step back and try a different choice as well and not start over as with the iphone. hell, i can TALK over this phone at much better rates that i could with an iphone, my bill could easily be half yours.

        and frankly there is nothing significant that apple really invented with iphone, i had a mp3 player on my sony ericson in 2005 for half the 1st iphone's price, it had google maps as well, camera with flash (iphone did not have a flash till 2008), had tiger woods golf on it too.

    • FalKirk

      "I've still to see the first iOS device to do everything Android devices do. Android is leading innovation here, not otherwise."

      @Noori: Don't confuse doing everything with innovation. Sometimes the most innovative thing one can do is to remove a feature. Or many features. Sometimes knowing what not to include is hardest and most important part of good engineering. There is great power in simplicity.

    • Coward_the_Anonymous

      Google InnovationTM beta.

    • dchu220

      I've still to see the first Android device with great battery life.

      I'm not trying to be a wise ass, but Apple and Google have different priorities. Apple values battery life over everything else. Features that might hurt battery life are automatically cut. I doubt that Apple has not thought about many of the features in Android before, but they just haven't thought of a way of implementing it to their standards.

      Android is cool because Google is willing to put features in before they are fully baked, but I would not place them over Apple in innovation. Both companies have made many contributions.

  • Hamranhansenhansen

    The interesting thing with Vic Gundotra's statement is the XOOM is no eagle, either. It looks like Windows Vista running on a turd and they want $71 more than an iPad for it. Nokia/Microsoft devices are actually more profitable than Motorola/Google devices. How does Gundotra get a high horse?

  • ashok pai

    apple here is positioned as something of a sole innovator in the mobile space. apple had enough time and observe the market, and they have something no other manufacturer has – a a very loyal set of customers who will believe apple blindly and buy a minimum quantity. this is something no manufacturer has. also apple has its cocooned ecosystem for a very long time for its loyal user base to cling onto. they do have a great engineering team too and they dont have a hundred products – all these points are unique to apple, and I believe has helped apple a lot. ipad-ipod-iphone are all one product around which all innovation took place. they were also primed well at the point of inflection for mobility based hardware – ram/ screens/ cpu/ gpu etc.

    * before capacitive screens came in resistive had a fairly long time in the market and apple observed all its flaws to improve
    * there were rudimentary app stores – but they were all private, nevertheless app store is a step backwards, not forwards in the end. it sure is easy for users to pick an app from – but its limiting, and binding to a single entitity.
    * apple learnt from others mistakes – sony ericsson/ nokia/ motorola being the prominent one.
    * besides they had no baggage of failed pdas and phones – all the other companies have tried a mix of both and failed.

    so if android followed apple and reacted quickly. its equally, a case of apple following other's mistakes and innovating, looking at others. not pulling a rabbit out of nowhere.

    • davel

      Apple Newton a very long time ago

      • ashokpai

        yeah, credits to apple. i'm not dening apple cannot innovate, they do great stuff, their engineering is briliant. in fact they forced nokia and other point release manufacturers to play a new game. but its also not like apple's the only one capable of innovating, nor are they the only ones innovating

    • Kizedek

      The true facts about Apple's userbase completely belie your premise. People can't trumpet marketshare for Android or Windows out of one side of their mouth, and then completely turn around and out of the other side of their mouth denigrate Apple as a company that is only sustained by its loyal users and not because it makes products that many ordinary people actually want to use. Most people just know good quality and superior user experience when they see it — so give them a little credit.

      Let's assume "loyal Apple customers" are these poor deluded creatures who, for however many years, actually use Apple products pretty much whenever they get a chance, and pretty much in exclusion of every thing else. That means they don't just use an iPhone or iPod because "it's cool", it means they also "buy into" the whole OS, Mac platform, Mac software, etc. I mean, afterall, this is the charicature painted of these "loyal customers" when comments like yours are made: lemmings, fanboys, people under the spell of the RDF, etc. Well, this would be poor support indeed for Apple, which is now a 100 billion a year company!

      The group that best fits "loyal customers" has been historically quite small. Perhaps a few hundred thousand new Apple computer users worldwide per quarter. In recent years, this has grown to 3 million new Macs sold per quarter. Now, the funny thing is, a full 50% of this recent growth in sales is firmly attributed to NEW Apple customers, each and every quarter, who never previously owned a Mac!

      Neither do customer satisfaction surveys bear you out. On top of that, the iPod, iPhone and iPad are relatively new, and yet they are top in their classes, product for product, no matter how you measure the market, the competition or the region of the world. They sell, what, 10 million, 8 million and 7 million respectively per quarter — nothing to do with the historic Apple userbase of loyal Mac users who wouldn't switch a 5-year old Mac for a shiny new Dell if you paid them (my Mac is a six-year old, secondhand G5 PowerMac).

      What is never acknowledged is how the degree of personal choice plays out. Apple customers choose their products. The strength, marketshare and mindshare of Windows or Android or RIM can be largely attributed to the bulk purchasing and lock-in by corporate customers. Of course the 50,000 employees of a large multinational bank are not loyal Apple customers — they don't have a choice. People don't talk about the loyal customer bases for Windows, RIM and Android because the users may well switch when given the opportunity or when something better comes along. It's the buying department that is loyal to Windows or RIM or Android, not the user. And this could change in an instant, as we are indeed seeing more and more : when companies decide to take a platform agnostic approach in the IT policies for their employees, then many individuals choose Apple products, never having done so before. Usually because of word of mouth of a relative or friend who is a satisfied Apple customer.

      • baychev

        when ipod came about, i already had a creative mp3 player with twice the memory at 40% lower price. i had a friend who was contemplating and eventually bought an ipod. when i asked him what is that drove his decision, he said: it is cool, i like the thing you do with your finger on the button.
        when you compare hardware, it was inferior, it was restricted at the time only to AAC music format, sorry, your mp3s can't play, you could not transfer music to your computer make a copy for the car system.

        but ipod was a hugely successful product without being better in anything but 'the thing you do with our finger'. this is the customer base of apple, people that get obsessed over 1 feature and can do without all other options that are available to them. in the long run, they are hugely overpaying for inconvenience.
        iphone is similar, you can have all it offers plus more for just half the monthly bill, but $500 extra a year is no problem for people that are told iphone is the best and they do not doubt it because they have just bought one.

      • perpetuity

        Not true, original iPod played all my mp3 ripped CDs just fine.

        I don't have cheaper monthly plans for Android devices vs the iPhone. All my research shows comparable plans.

      • Allen

        Actually, my Sprint Evo plan's minimum cost is more than my iPhone 4's plan cost. Not by much, $10, but yes, comparable, and the Evo was the same price as the iPhone 4 ($199). I don't see how people can still say Apple is more expensive.

      • ashokpai

        "Apple, which is now a 100 billion a year company! "
        apple does not make that much – the market cap is that much. they are doing pretty good. I dint deny that.

        "The group that best fits "loyal customers" has been historically quite small"
        nevrtheless, they can make a bet that they have a captive base, that NO other company can make. it's a plus point for apple, not so much for others.

        "The strength, marketshare and mindshare of Windows or Android or RIM can be largely attributed to the bulk purchasing and lock-in by corporate customers."
        that's an over generalisation. window phone maybe, but not android – android customers are never corporate lock in customers, same with symbian for most parts – if you see asian market, corporate users are just a fraction.

        "Usually because of word of mouth of a relative or friend who is a satisfied Apple customer. "
        maybe. but there's also an overbearing press which feeds on anything apple news. when the going was good apple behaved as if it was the press's duty to report the good news. then came the moment of truth, because when the antenna gate happened, the same press went on with their business of reporting the antenna issues and suddenly apple was crossed with them for reporting the negative! cant have it both ways!

      • laserbeam

        So … Apple is doing "pretty good"? You can't give them full credit even when it's undeniable. One may argue about intangibles like "experience" but their financial data is publicly available.

        By the way, Apple's market capitalization is 330B, not 100B.

      • Kizedek

        OK, 80, then. They just had a 23 billion quarter. Let's say they do 20 per, here on out.

      • Kizedek

        "The group that best fits "loyal customers" has been historically quite small"
        nevrtheless, they can make a bet that they have a captive base, that NO other company can make. it's a plus point for apple, not so much for others. "

        It may be a plus point to have a loyal customer base. And they may even be counted on to buy some kind of "minimum". Nevertheless, this doesn't account for the success that Apple is having.

        So what would this minimum be? A million phones? A million iPads? Whatever number every other manufacturer is barely selling to their traditional markets if they are lucky? Markets where they are strong geographically, culturally, or through partnerships with carriers and corporate buyers?

        Everyone, Apple users included, thought Apple would be lucky to sell 4 or 5 million iPads last year. They did it in the first quarter it went on sale. Ended with a 7 million quarter.

        Obviously, consumers other than Apple fans are finding something compelling about the products! They are also recognising their is something about the products that causes one to be a fan of Apple; and it has nothing to do with blind loyalty or distortion fields: it has everything to do with customer satisfaction and innovation — Practical, useable innovation that one can see, touch and smell — not just a bunch of extra bullet points on a spec sheet.

        That is perhaps Apple's greatest innovation: making something look effortless, sweating the details, the definition of great design (the engineering as well as the style) being that the way it works just fades into the background, as though it couldn't be any other way; rather than the user having to focus on the way it works. (see videos of Jonathon Ive). Just because you and the pundits and the other manufacturers don't recognise the innovations of Apple, doesn't mean their success hangs on their loyal customers. There is a reason Apple has loyal customers. To act like this is somehow unfair, or that poor sales from others can be excused on this basis, is just peevish.

  • Mike

    Android will create one future: a future of low-cost internet-connected devices based on a broadly common highly open platform with far less carrier, manufacturer and even OS vendor control and much broader toolset access.

    Or do only 'technical innovation' futures matter?

    • cjackson

      If Android is supposed to reduce carrier control it's doing a horrible job so far. Carrier's have waaaay more control in Android than in iOS, to the detriment of Android users everywhere. Perhaps it's a rope-a-dope type of thing?

      Also, people don't buy phones based on how 'open' they are. They honestly don't give a damn about that stuff, I don't know why Android folks keep insisting that they do.

      • Mike H

        Two recycled arguments only tangentially related to what I said, and two mod points for them. *sigh* If you feel like responding, how about responding to the actual points I made?

        Android is doing a pretty good job of reducing carrier control. Just not in the ridiculously uncompetitive US phone market where you tolerate extraordinary abuse from your carriers. There is a whole world outside the US phone market, with more interchangeable, more competitive GSM carriers in many markets. Most carriers are just supplying devices, not piddling around much with firmware. In well-regulated and competitive markets, multiple carriers are shipping the same device without exclusivity, and with competition on price. The problem is the US phone market, not Android.

        And did I say, at all, anywhere in my very short comment, that people buy things on the _basis_ of how open they are? The market for android devices is growing based on the low barrier to entry for those devices. It's easy for suppliers to get in, and differentiate. People are buying those devices because they are cheap, or interesting, or small, or powerful, or they have a keyboard, etc. This is how a real market gets established.

        For instance, we've seen HTC grow massively off the back of Android, yet it is already threatened by Samsung, a bit player only a couple of years ago. Competition at work, because of a relatively open platform. Android is less tidy than iOS, but competition is untidy.

        The analogy is clear with Linux, which is the OS that is without a doubt most influential in the development of the internet. Low barriers to entry create interesting opportunities to lower costs, and novel products and technologies. Android will do the same, and is clearly already doing the same.

      • ______

        "There is a whole world outside the US phone market, with more interchangeable, more competitive GSM carriers in many markets."

        This has nothing to do with Android, and everything to do with GSM and the carrier business model. How is Android bringing this notion of interchangeable carriers to fruition? It was done with SE, Samsung, LG, Nokia and dozens of other unknown brands. It has nothing to do with smartphones.

      • perpetuity

        Actually I believe it has A LOT to do with government regulations and rules, not corporate governance of everything under the sun like we have in the U.S.

      • http://twitter.com/judsontwit @judsontwit

        The analogy is horribly unclear with Linux as you apply it to the web.

        The mobile phone product world in which iOS and Android compete has nothing to do with phone network infrastrcture — it is about the product that millions of real consumers use on their personal devices.

      • Mike H

        And not to rub it in, but blaming Android for making it possible for your abusive near-monopolistic phone companies to fiddle with your phone is a bit like blaming DeMarini for making it possible for you to be mugged by a guy with a baseball bat.

        The fact that a carrier can customise a device is a purely device-oriented, technological view of carrier control. The sheer commoditisation of Android (which Elop is running scared of) is bringing about the end of the days when carriers as a group could decide which devices did or did not appear on their networks, and the beginning of the end of carrier exclusivity – there are even hints of that in the USA's uncompetitive market – and this is a vastly more important change of carrier control.

        Android is reducing carriers to common commodity status at a much faster rate than iOS; the sales figures in the US alone bear this out.

      • Synth

        I don't think so. Android didn't make carrier stupidity possible but Google certainly doesn't do anything to discourage it. Apple didn't let Verizon put any crap on the iPhone.

        And BTW, do you honestly think that Verizon would have sold a Samsung Tab without a CDMA chip but with a GSM chip instead? And without a two year contract?
        Apple reduced Verizon to a simple brick and mortar storefront.
        Meanwhile, the Moto Xoom with Verizon, will require you to activate a dataplan before you can use your wifi. Can you even imagine Apple allowing that kind of nonsense on one of their devices?
        But Apple constructs Facetime to totally bypass the telcos.
        Meanwhile, Verizon is installing Bing on Android phones leaving Google out of the equation.

        Now who is the commodity?

      • http://twitter.com/judsontwit @judsontwit

        The march of technology reduces phones and carriers to a commodity status.

        People have bought Symbian and Android phones both in mass. Both push toward commoditization.

        Neither have anything to do with their openness — pay-licenses [Symbian] or free licenses [Android] are just ways to proliferate the software.

        Licensed software itself lowers the cost for phone production. There is nothing unique to Android *in regard to commoditization* except for its utter cheapness — and this only works best [my hypothesis] in markets not already controlled by tightly regulated oligarchies [hence, being much more effective at driving costs down in Asia on GSM networks so far than on Sprint, Verizon, and AT&T in the US.]

    • ______

      I don't think the point in this article denies the future you paint. In fact, it even suggests that this is the case:
      "At such time when there will be nothing to follow Android will be the king of the last commoditized innovation, but as long as there is something worth inventing Android will be there to reproduce it."

      Your low cost connected future is made possible by Android only because it is following in the footsteps of someone who has shown that this is possible in the form that we enjoy today.
      Your low cost tablet future (if ever – tablet prices aren't really low) is only possible because someone else showed you how to do it and let you know that people actually want it in the form you know today. Two things that modular architectures were unable to make and decide (for tablets), respectively, so far.

      It cannot be ignored that integrated architectures are necessary for major innovation leaps and that modular architectures are best for breaking down and commoditizing innovation created by integrated architectures. So yes, innovation futures matter. Why did this need to be said? Because as Horace suggests, a penguin calling out a turkey begs a friendly reminder.

  • Juliant

    Remember when Palm started to go downhill……….. when they started making WIndows Mobile phones!

    • Guest

      Palm went downhill because they kept mis-executing their plans. And because of bad execution, projects slipped and missed it's targeted window of opportunity in the market. Which ultimately resulted in poor sell-through.

  • Rob Scott

    I am happy with Nokia's decision. There is too much Android already! We do not need another monoculture. We had enough of that with Windows. An ideal situation is when we have 4 – 5 strong OS'es with almost equal share of units. So, I wish Nokia and Microsoft luck.

  • TomCF

    "At such time when there will be nothing to follow Android will be the king of the last commoditized innovation"

    This assumes two things:
    1. There will be a time when there is nothing to follow.
    2. Apple will either be unable or unwilling to sell a commodity.

    I think the latter is likely. It's not in their corporate culture (though that can change).

    I think the former will take quite a while. There are still a lot of hard problems to solve or at least make easier.

    • EricE

      "I think the latter is likely. It's not in their corporate culture (though that can change). "

      Huh? The whole iPod Shuffle/Nano thing must be a fluke then, because if those are commodity items I don't know what is!

      And as far as tablets go, the iPad is far more of a commodity item than anything any of their competitors have been able to talk about, let alone ship – starting with the whole "what you really want is a 7 inch tablet" routine. And even with a smaller screen (the most expensive part of tablets) they still are having a hard time competing with Apple.

      "Not in their culture" indeed – ranks right up there with the inane "Apple Tax" meme. I can't wait to watch the whole "Apple is too expensive" (which is pretty much what you are implying) crowds heads collectively explode as Apple exploits their tight integration and heavy investments in their supply chain to drive their costs down even further. If the "iPhone Nano" rumors are true, it's game over. Then again, all they really need to do is discount last years model to $99 and move on. A $399 iPad when the iPad 2 is released will generate a ton of interest as well. Apple certainly is not operating from a position of weakness when it comes to price – for whatever reasons!

      • TomCF

        "Huh? The whole iPod Shuffle/Nano thing must be a fluke then, because if those are commodity items I don't know what is! "

        The iPods are still part of a larger ecosystem, but lets call them commodities for the sake of argument.

        Do you think that the management that is so good at the current Apple will stick around for the commoditized Apple? Do you think their leverage due to its non-commodity offerings will still be there when they're all commodities? What fraction of Apple's revenue is commoditized? Apple can do just fine with commodities, but that's not who they are. I think the people will move on, or the products they sell will move on.

        "And as far as tablets go, the iPad is far more of a commodity item"

        That makes no sense. By what definition is the iPad a commodity?

        "'Apple is too expensive' (which is pretty much what you are implying) "

        I said nothing of the sort. I have no idea how you got from what I wrote to what you say I implied. I'm backing up the truck on Apple stock and options. I think it's undervalued.

      • baychev

        the iphone 4 when launched cost $190 assembled, now it is about $150… but sells for $600. you are paying $200 to get it, but are required to pay extra $360 in data usage and then some more for texting, and there is a termination fee surcharge for iphones.
        if you can indeed do math, you have figured out by now that 2/3 of the price is what apple retains, what they can squeeze out of the supply chain is really irrelevant to the final price. math illiteracy is the common denominatior of all apple fanboys, no question about tihs :)

  • http://twitter.com/pcad @pcad

    You can't mistake actuality for lack of possibility. And mobility has tons of possible directions to go.

    I think one vein of providers views new directions as features. Something to be checked off.

    The better vein (which incl. Apple) views it as behaviors. I think that Apple is studying the ways in which we can go forward. And that they know that by creating the right solution they can put their mark on it. The danger is when the biggest company ceases to be the innovator.

    Commoditization appears to happen very quickly in this environment.

    • EricE

      "The danger is when the biggest company ceases to be the innovator."

      I don't think size has much to do with innovation – Apple is the second largest company on the Street and yet they are still the primary driver of change and innovation in not just the desktop but now in the mobile space as well.

      Instead, I see innovation as driven by culture, and I know of no other company that is as customer focused as Apple. It's at their core and it shows!

  • Ashley

    I’m really enjoying this site: high quality stuff. I haven’t come across the word “absorbed” like this before, though. “In other words, as long as innovation remains relevant, improvements will be absorbed and rewarded. Once innovation exceeds what can be absorbed, the basis of competition will shift to convenience and price which are best served with a modular business architecture.” Is the innovation absorbed by customers or competitors?

    • ______

      By the market in general, so yes absorbed by consumers in that after a while the innovation becomes standard. It becomes standard because it is offered by competitors after an innovator shows that it is feasible and the market demands it.

  • davel

    This is not a judgement, but an observation: Nokia and Microsoft may not make an Apple but neither will Android ever create the future.

    I agree completely.

    Altho I did read an interview with the lead on Android. He had a clear vision for Android. If he is able to follow that vision Android is not a lost soul.

    • APai

      “but neither will Android ever create the future”
      the writing was on the wall 2 years back, that android was the new windows, and yet so many ‘experts’ failed to see the change in tide

  • lrd

    A clear vision for the future? Is that why Android's been forked for tablets already?

  • lrd

    Are people still going to be talking about Android when Apple's making $50 Billion per quarter and Google's stuck at $6 Billion?

    A lot of talk and very little returns!

    • ashokpai

      so, apple's making 200 billion per quarter ? where did you pull those stats from ?

      • ashokpai

        Ed: 200 billion per year (that's a hell of a lot of money)

  • Joop

    Apple followed Palm quite closely, look where it got them. No innovation from Cupertino, nor has there ever been.

    • laserbeam

      You're absolutely right. Apple just makes great products that people line up to buy. Other than that, not much …

    • Peter02l

      If your comparison is to Palm just before the HP purchase, then your assessment of Apple is 14 years too late.

      • Mike

        The original iPhone was very similar to the Palm T|X and several Treo models, in terms of its launcher, single tasking, form factor, desktop sync, input methods, etc.

        There really was very little about the iPhone that was original when it came out.

      • http://twitter.com/judsontwit @judsontwit

        Some quick wikipedia-ing shows that the Treo looks nothing like an iPhone, and the Palm T|X has distinct differences — including a resistive, aka "you'll have to use a pen" screen.

        I have used Palm Pilots however, and I'm assuming that if suddenly a Palm Pilot had a color screen, you'd also say it's "very similar to the iPhone".

        You're not conceptually incorrect. You're just very practically wrong.

      • Kizedek

        And the Palm PDAs only existed because of the Apple Newton, which was ahead of it's time.

  • http://twitter.com/n13 @n13

    I am looking at this from a software perspective. Apple keeps saying they're all about software – yes. That, and ideas, laser execution, etc etc.

    Android is a good architecture – it makes it possible to react to the challenges that iOS keeps pushing with every new release. It's a good follower, as you say – it's nimble _because_ it's a good architecture.

    On the other end of the spectrum is Symbian. I have never seen Symbian source – but I can say it's a bad architecture. Because it can't react quickly to changes. It takes forever to make improvements. Bugs abound.

    What about WP7 – it was a completely new design and as such, it would have been very easy to make it a great architecture. But, it looks like once again, Microsoft screwed up. Not a beep or a bip about WP7 on a tablet. Perhaps it can't be done?! The entire UI was designed with 3" screens in mind – can't be changed to 10". So I think Nokia went from one bad architecture to a less-bad but still bad one. Make no mistake – it's incredibly hard to make a good software architecture, and keep it good over the years is even harder.

    Apple porting OS X to the iPhone is, IMO, something insanely great. If there were 7 world wonders of programming, that would be one. It's crazy!

    I am happy about this because as long as Windows was winning, it seemed like in the real world, good software design didn't matter. These days, with every blow that Microsoft takes for its HUGE crappy hack that is Windows, good software design wins a little victory.

  • Alexkhan2000

    They were both forced into this deal. They really had no other choice. It's do-or-die desperation time for these behemoths. Combining two dinosaurs won't produce a mammal. This deal will obviously help Apple more as it really focuses more on stemming the Android tide from Samsung, LG, SE, HTC and Motorola than the iOS devices. Sure they want Apple's action as well but their main worry is Android. This deal buys Apple some time to come up with a more comprehensive market share strategy in the midrange to low-end segments of the mobile market. Man, you just couldn't script things better for Apple. It's really amazing to observe how Apple is playing the competition like a drum.

    • baychev

      margin compression is what is coming apple's way. they are making huge profits on these devices anyways, but the market share is shrinking and will be shrinking, that would not be seen by its fanboys until sales growth levels out.
      remember, it is PCs sales that are suffering most from smartphones and tablets sales, more and more people just don't need a PC anymore.

      • laserbeam

        "it is PCs sales that are suffering most from smartphones and tablets sales"

        More precisely, it is low-end PC sales that are suffering from tablet sales. Apple is the least affected; on the other hand the tablets eating PC sales are mostly iPads, so I fail to see your point.

      • baychev

        apple makes off like a bandit on every iphone they sell with about $400 markup over production costs whereas all other manufacturers cannot command even 50% markup and can only dream of 300% margins.
        my point on PCs is this: even if you have one lying around, when you get a smartphone and/or tablet you use it and the PC gets less and less utilized, then you can postpone its upgrade further by a year or two and if you buy a new phone/tablet again in the meantime your PC upgrade can wait even more. it is not like you consider to totally abandon PCs, but it nags you alot less when it is old but you are barely using it.

      • laserbeam

        A bandit uses a gun, or a knife. What gun is Apple using? What prevents other manufacturers from asking the same price? Other than supply and demand, I mean.

      • asymco

        Mac sales have outpaced PC sales (thus growing share) for 19 quarters in a row.

  • http://twitter.com/efernandez @efernandez

    Thanks for this post Horace, couldn't agree more and, definitively your point on modularity aproach/strategy is at the core of how mobile platforms have evolved, and is directly linked to success and stickiness, as seen over the past decade.

    regards.

    eduardo

  • Mike

    Capacitive touch is not a "better input paradigm", it's just a popular and fun one (and allows for better games). In terms of productivity, the old keyboard+resistive+pen as found on Palm and others is far better.

    • Traipsed

      Haha, good one. See you in a few years.

  • chandra2

    Horace: In another article you mentined "The question to be asked is not “CISC vs. RISC”. Rather, it should have been: Is the architecture the relevant decision point or is it the choice of partner?".. So why are we asking the same architectural question here in evaluating the merits of the partnership? The question should be 'Did Nokia choose the right partner?'….

    • asymco

      In the case of Apple and Intel, partnership was necessary since building microprocessors was not something Apple could or should have done at the time. At the time the decision had to be made, the computer had flipped to being modular (in contrast to the 1960 and 1970s when computers were integrated products.)

      In the case of Nokia and Microsoft, the implicit bet has been made that the smartphone is now modular (while Apple, RIM and HP are betting the opposite). The question today is whether business architecture for smart devices should be modular or not. The question in 1990s for PC makers was which modules would lead to the right level of competitiveness.

  • Sevket Zaimoglu

    Android is already creating the future. Android's notification system, widgets and multitasking is superior to iOS. I have several friends, some of whom use iOS devices while others use Android.

    Notification system: I receive an SMS or Whatsapp message on my HTC Desire while doing something else and I am notified in a nonobtrusive way. My iOS-touting friends' work or leisure is interrupted everytime they receive a message. It becomes annoying after 5 minutes. You will probably see Apple copying Android's notification system in the next iteration of iOS, but there won't be much fanfare.

    Widgets: Android's widgets are also a great innovation that iOS has no counterpart. I wake up in the morning and a glance on my phone's screen quickly tells me the outside temperature, the number of words I need to review that day for the language I am learning, the latest stock prices and exchange rates I am following. All in an instant. On an iOS device, I would have to individually get inside several apps and manually refresh each of them to get the same amount of information. It would take several minutes. Having dismissed widgets publicly in the past, Apple (or Steve Jobs) will not probably eat their words and incorporate widgets, but a loss is a loss no matter how you spin it.

    Multitasking: Android has true multitasking, while iOS does not have multitasking for third party apps. I frequently go out with a friend on long walks as exercise. We both use tracking software. I use Cardio Trainer on my Android, and he uses a similar app on his iPhone 4. While we are walking, if I receive a call, I answer it and we just continue walking. My app continues tracking our progress in the background. But if he receives a call while we are walking, we have to stop, because he first needs to pause the tracking app, answer the call, put it into background (as only iOS services can multitask), and then restart the tracking app. If he gets more than two calls during our route, I can't bother with his antiquated phone and just continue walking. Too bad for him.

    Isn't it funny that when others follow up on Apple's ideas, it is called "copying" or "stealing" but when Apple copies others' ideas it is called "innovation".

    • http://twitter.com/judsontwit @judsontwit

      You are a duplicate post under another username.

  • TimeisaB

    http://www.theregister.co.uk/2005/06/15/nokia_on_

    Nokia gets his own comment back. Tnx to Firelight's comment at phandroid.com for the find.

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  • http://maxcho.com Max Cho

    I think Nokia and HP are both interested in differentiation precisely because they don’t want to be responding to Apple, but instead break out ahead with a runaway success. It’s a riskier strategy with potential for bigger payoffs. It’s also a sign that HP and Nokia think the smartphone market is maturing. Counter-intuitively, the risky strategy is also only viable for the already established giants: they’re the only ones that can bankroll a bet this big. The small “Other” manufacturers that have been recently winning market share have to play it safe with Android.
    http://maxcho.com/2011/02/why-nokia-needed-micros

  • http://robrites.blogspot.com Rob Lewis

    Just stumbled onto this post, and I have to remark that your "wisdom" on innovation and commoditization is obviously lifted straight from Clay Christensen's work (e.g., The Innovator's Dilemma). Either that, or he stole from you.

    • asymco

      Clay was my professor at HBS in 1995 and we remain friends to this day. I am a member of the Forum for Growth and Innovation (http://www.thefgi.net).

  • http://twitter.com/peter_burke_ceo @peter_burke_ceo

    I think you assume that Apple will always be apple. that hasn't even been true in history as apple has had to reinvent itself numerous times, sometimes on the verge of total failure. Jobs created the present Apple. That's right. The ideas of one many created the present success story. When he leaves the company who is there to create the future?

    The only think true about the future is that it is impossible to predict. And that's why being so arrogant about a winning tech company today–given how fast technology changes— is bound to be a misguided view, when the future actually unfolds.

  • skeletaldrawing

    Apple is a fast follower. When Android and Palm introduced multi-tasking, they were quick to add their own version to iOS. When RIM added touchscreen based cut and paste to the Storm, Apple was quick to add it to to the next version of iOS. When integrated (and free) location and navigation services like Google Maps (and now Bing maps) became killer mobile apps…Apple was quick to let you use Google Maps? When Google made VOIP integration seemless on Android and then offered the service to iPhone users Apple was quick to… ban it until the government explained that was illegal? When Android created a true tablet version of their OS…um, wait, Apple hasn't done that yet. Well when RIM allowed developers to create novel themes for their devices…oh wait, Apple hasn't done that either. But when Android added powerful widgets APIs….sheesh, never mind. Apple's actually a pretty slow copier! And while they have had their share of innovations, pretending they have had any more than Android, Palm/HP, or RIM only demonstrates your ignorance of mobile OS development.

    Apple did indeed create some important innovations when it came to making touch computing workable for consumer electronics, but many other parts of their OS are wholesale imitations of innovations by its competitors; many other features simply don't yet exist on iOS.

    Apple's biggest innovation has been its ability to leverage and market it's early success in touch computing to lead the way at a major inflection point in the growth of mobile computing. Microsoft managed to do this in the late 1990s when they capitalized on their market positioning when personal computing took off. That didn't mean that Microsoft was the most innovative company of the PC era, and Apple's current success isn't because they are the most innovative in the mobile sector.

    Until you can provide level headed discussions of who has innovated which parts of an OS (here's a hint: all of the mobile OS providers have made substantial innovations, and every last one of them has copied the innovations of others) then the otherwise decent numerical analyses done here will always seem like so much fanboy drivel.

    • TomCF

      Many continue to mistake a checklist of features for design of a product.

      Apple was first to remove carrier demands from the phone hardware and software in order to make something better for the consumer. Apple does not innovate individual features, they design complete products. For every feature you can find in any piece of Apple hardware, you can find someone else who did it first.

      The iPod was not a hit because Apple was first to play MP3s from a portable hard drive. It was the first easily usable portable music player. Apple accomplished this by putting the consumers' interests first and getting the music distributors to get out of the way.

      Apple did the same thing with the carriers, getting them out of the way of the consumers getting a usable smart phone.

      Apple led the way again in tablet computing, carefully choosing which features, software and hardware mattered most to them. They're not always right, but they're right more often than the competition.

      Apple is conservative when choosing hardware and software. They do not use bleeding edge technology in their consumer devices. They didn't invent flash memory, touch screens, mice, trackpads, etc. They just put all the pieces together in a way that makes sense for most people, that works, and reduces friction between the consumer and the task at hand.

      • skeletaldrawing

        First of all, I'm not disputing that Apple innovates, so your list of Apple's achievements is totally beside the point. I'm disputing the idea in the original article that claimed that Android or other OSes can't lead because they don't innovate, which is categorically false.

        But you bring up several interesting points, so lets touch on them:

        Apple wasn't the first to struggle with carriers over what was on their phones, but they certainly were (and still are) the first to be so successful at removing bloatware from their phones. I also agree that Apple generally eschews cutting edge software in favor of making what they feel are cutting edge user experiences. I'd also agree that Apple broke open the tablet computing market, although I don't think I'd attribute that to excellent product innovation as much as I'd attribute it to them making an oversized iPod and leveraging the excellent developers they have cultivated in the iOS ecosystem. Seriously, iPads built their serious buzz (and sales) after the product was out for a while because of how well iPad-specific apps took advantage of the opportunity. And there's nothing wrong with that, but if you look at what HP/Palm, RIM, and Android are doing in terms of integrating a true tablet computing experience and don't think they are out-innovating what Apple has shown then you are not paying attention. Now Apple may well be working all-out on their own tablet-specific features for iOS (or maybe not) but from what's publically available Apple it pretty much doing the least amount of innovating in the tablet computing market right now, even if they got their first and have the current sales lead.

        It's _always_ a false dichotomy to talk about designing "complete products". Not to say that Apple doesn't talk up how integrated their products are, but they certainly also develop and market individual features as well.

        As for the iPod…it wasn't the first mp3 player, but it was the first mp3 player with an integrated music solution for your computer…complete with a legal music sales environment. I'm not sure the iPod was ever the best designed piece of hardware in the market (although it was no slouch) but they were selling the ecosystem to end users, not just the hardware. Also note that "being first" isn't the same thing as "leveraging market position at an inflection point". Microsoft didn't produce the first consumer-friendly OS for PCs (you may recall that Apple actually helped innovate much of that product space), but they were the best positioned when a market opened up for an OS to license.

        I do agree that Apple "put all the pieces together in a way that makes sense for most people". What Apple calls design involves two things: 1) Reducing the ways a consumer can use a device in order to better expose the most common ways to use it, and 2) making sure that their UI is very consistent across the entire environment (preferably entire product ranges). I think number 2 is a universally accepted example of good design. RIM did it very well on their normal OS (they slacked a bit on their touch screen OSes). Palm did it well. Stock Android does it pretty well also, but when vendors differentiate the product they can screw that up if they aren't careful. Number 1 is much more of a personal preference rather than an objectively better way to do something. I routinely use computing devices in ways not intended, and I despise iOS environments as a result. But some of my very talented friends (at least one of whom is actually a well known computer programmer) prefers iOS for the same reason I hate using it; he doesn't want to customize anything, he just wants a device that meets his needs on a smartphone as simply as possible, and in his case it does that.

        I believe this issue is frequently at the heart of emotional disagreements about which mobile OS is better, even though there isn't really a "better" here, just a preference for how you want to use your device. If the iPhone does what you want it to do, then it's lack of other options really does "reduce friction between the consumer and the task at hand". If you want to be able to do something the iPhone won't let you (which would happen to me freqently) then all it does is throw up roadblocks which aren't merely friction, they are insurmountable walls.

      • TomCF

        I misunderstood your post. Sorry about that.

        There is one kind of "better": Apple's margins. People are willing to pay more for Apple's devices. ;)

        Out of curiosity, can you give a few examples of things you want to do that your iPhone won't let you do (without jailbreaking)? (I'm not going to argue about them, I hate reading arguments about how what others want is right or wrong.)

      • skeletaldrawing

        You're certainly right that Apple's margins are better, and kudos to them, that's just good business. I'm not convinced it will stay this way for the next few years, but they're making so much money right now that you can't fault them.

        I don't own an iPhone (I have the latest iPod touch, and plenty of my associates have iPhones), but two things right off the bat; one, I simply have to be able to review Flash material for my job. I'm a consultant on media projects and much of it comes on Flash. Now of course those companies could supply the content in another way, but as an outside consultant it's not really up to me to tell them how to get the material to me. This may take care of itself in a couple years if more people switch away to other competing formats.

        I need HDMI out for similar reasons. Of course nothing in the Android OS is particularly friendly to HDMI, but because there are multiple competing vendors that are working to differentiate their hardware there are already several handsets that have it (by the way, for those interested in entertainment the current HDMI implementations would probably suck, although the generation of handsets just announced will fix that…so it's hardly been a compelling "advantage" for most people so far).

        As a final example, and it's either a small thing or everything, depending on how you view it, I really like to set up minimalist UIs that provide my with "at a glance" data, and images that suit my mood/time of year, etc. I interact with my phone often enough that I want it to be a reflection of how I work and to change to follow my interests. So I want a home screen that has perhaps a widget or two, and a dockbar that I can put the apps I most use on it, and I want it to be able to look interesting to me. I want it to look festive during the holidays, reflect my favorite team when the Packers go to the Superbowl, show off some of my own work when I go to conferences or educational functions, etc. And I want the default home screen in the middle of the other screens, so I can more quickly access my carefully arranged pages of widgets and apps that let me get to work (or play) more quickly. In fact, I'm currently envious of other Android phones because they include the ability to set up half a dozen themed layouts that you can easily switch between, so I could have one ready for work, for travel, for vacation, etc (apparently my phone will be getting this function in the next few months).

        I realize that all of these examples may be meaningless to many (most?) users, and others can be overcome by jailbreaking an iPhone. Much like arguing over whether pencils are better than pens (or vice versa) I'm happy to accept that either may be better depending on the task at hand, and that the world is probably a better place with them both around. I just stopped in to make my original comment because I generally like to come here for the financial analysis, but was disappointed to see a silly post on how one persons favorite mobile OS is the only one that can lead the way, because the others aren't doing anything but copying them (a paraphrase, but not a bad one IMO).

        I will say that I think Apple can only maintain its current level of profitability as long as it continues to define new product categories. Despite what's sometimes been written here I don't think Apple can maintain the lions share of the profits in smartphones as they attempt to compete on marketshare (and they clearly are planning to try). Likewise, at some point in the next couple years they will hit the same point on tablets. I hope by then they're ready to show us "one more thing" that also happens to be the "next big thing", because while I don't always love Apple products, I always love how they impact a market.

      • TomCF

        Thanks. Makes sense.

        I think the analogy is more like Apple made a Model T, and everyone (including Apple) is now making advances in transmission, stereos, armrests, etc. Then while everyone is competing with Apple in automobiles, Apple goes and invents an airplane, and everyone starts competing there.

        So I agree, Apple is not the only innovator, but they continue to lead the direction of the innovations.

    • http://twitter.com/davidchu @davidchu

      Hey Skeletaldrawing. I think you will like disruptive theory by Clayton christenson. It doesn't really matter who comes up with the innovation. Since apple is the market leader, they can flex their muscles and use that time to catch up to any innovations that their competitors adopt. Take a look at the market right now. They have already locked up 60% of the supply of touch panels. Their competitors are going to be forced to fight for the scraps by outbidding each other.

      In truth, Apple's competitors should be looking for the next paradigm shift to re-enter the market. Google has some promising things with their research in voice, but that has some intrinsic obstacles that probably won't be solved soon. Outside of that, everyone else is playing for second place.

      • skeletaldrawing

        I'm familiar with his work, and am generally a fan, but I think the "sound bite" version bandied about is an oversimplification. It's certainly true that being the market leader gives you more time to react to the innovations of your competition (and for that reason Apple has every right to think RIM won't retake them in the marketshare space) but there's more than one type of disruption. The Android strategy in touch phones has clearly been a disruptive ecosystem strategy, despite Apple having the initial lead in the area. Tablets may well play out differently, we'll have to see.

        I actually think Christensen's work is going to become less accurate over time. A big part of disruptive theory has to do with how consumers are actually pretty inefficient at choosing products that are best for them, so once a company gets entrenched as the incumbent they are hard to unseat because consumers aren't quick to realize when a competing product offers a superior choice. That's certainly true, but I think that IT changes and internet shopping are increasing the rate of efficiency by which consumers are able to pick devices that are best for them, share that data with other consumers, and convey desired changes back to the companies that make the devices. I've witnessed first hand this happening to Motorola the last 9 months; they are literally more open and responding faster in their handset development cycles than any previous time in their history, yet in the cacophonous world of internet feedback they receive mostly negative comments on how slow of unresponsive they are.

        Given this sort of environment, there are lots of other ways to be disruptive (e.g. major software upgrades). You are correct of course that Apple's competition should be looking for the next disruptive technology, but one of the advantages of the distributed development platform of Android is that companies are free to innovate at what they are best at. Samsung doesn't have to develop new software features (although they do work on skinning the OS) but can concentrate on inventing disruptive new display technology, battery technology, etc. Google doesn't have to develop hardware form factors, or pick the best trade off in terms of speaker size vs quality, they can just work on the software. Apple has to do all of these things itself.

        This is why Apple's first try at a new market is almost always more cohesive (by the way, it's not so much because they have better designers per se, but rather their design structure is done less by committee, in large part due to Steve Jobs himself being a principle designer). It also explains why they have trouble holding onto market share as markets mature. These economics are what lost Apple the PC wars, although (as Asymco points out in many articles) the mobile computing wars aren't being fought on the same landscape as the PC wars were, so "winners" and "losers" may not be distributed the same way in the market this time around.

        So in short, I mostly agree with you, but I don't think the implications are quite as clear cut as your post seems to imply.

  • JoeHTH

    "Android is leading innovation here, not otherwise. "

    Only if your consider ugly, clunky, unintuitive, choppy, fragmented mess of an OS to be innovation.

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  • http://twitter.com/TheMaker3 The Maker

    LOL @ the author 2 years later. Android is creating the future. You are a fool.

  • Yuvamani

    Reading this 2 years after you wrote it .. How wrong you were !

    • http://www.asymco.com Horace Dediu

      I see no error in what I wrote.

      • APai

        “but neither will Android ever create the future”
        I see android innovating more than the others, and the others following the same incremental changes android once followed. so why hold a grudge against android when it innovates ? is it that you think android is incapable of innovation ?

      • http://www.asymco.com Horace Dediu

        There are varying forms of innovation. There are sustaining, low-end disruptive and new market disruptive innovations. Each is successful in a particular point in the cycle of a product category and industry. Google is typically successful with low end disruption (e.g. Android) and Apple is successful in new market disruption. Both are also successful in sustaining innovation (non-disruptive). My assertion in this post is that Google will succeed with Android in the low-end but that they would not be able to create successful new market disruptions (i.e. new product categories.) So far that has proven to be the case. If and when Apple creates a new category, I expect Google to exploit it and expand it into the low end. I do not expect Apple to pursue low end disruption nor do I expect Google to create new markets. Incidentally, Microsoft has had the same modus operandi w.r.t. innovation as Google. All their successes have been in low-end disruptions and all their failures have been in new market innovation. For more on this trichotomy of innovation, see Clayton Christensen et. al.

      • APai

        I am not so sure. isn’t google playing a completely different game here ? until they dipped their feet into the hardware market (motorola/ nexus tentatively), they weren’t making money off android, unlike MS did with windows.

        companies are taking android and using it across all kinds of devices, across all ranges. if vertu takes android and makes an expensive phone, wouldn’t it be classified as something more expensive than apple ? apple has the entire stack, and I’d treat them as separate entities except when it comes to profits. and their success started with the ipod, and that spilled onto the phone, and the tablet – interest in Macs has come at a time when apple has had the highest sales in their consumer devices. to apple’s credit, they have timed their products right when the time was ripe for hardware. for example – their macbook air was with the help of frugal processors coming of age + running cool, good battery and some nice aluminium case making tech not easily available. they timed it to perfection, it wasnt like others had tried. sony has super slim viaos ages ago. their disruptions have been perfect timed products – to a very eager & loyal, captive market.