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The fate of mobile phone brands

The violence with which new platforms have displaced incumbent mobile vendor fortunes continues to surprise.

  • Nokia’s Symbian platform has gone from 47% share to 16% in three years
  • Microsoft’s phone platforms have gone from 12% to 1%
  • Other platforms have gone from 21% to zero
  • Although far less dramatic, RIM’s decline from 17% to 12%  is causing acute pain and anxiety

This while entrants have grown share in spectacular fashion:

  • Android from zero to 48% (A two year period)
  • iOS from 2% to 19%
  • Bada from zero to 4% (two quarters only)

 

The picture of platform share over time looks like this:

 

The platform volume growth is shown in the following graph:

Shocking

Or is it?

The surprising thing is that it should not be surprising. When the iPhone re-defined the basis of competition (at the beginning of the time frame of these charts) it unleashed forces which are still spinning the industry into a new configuration.

In that context, Android is a natural consequence. As iPhone created a threat, the response from all other vendors (other than Nokia and RIM) was to seek something that would sustain their business. Android was salvation.

It enabled the pursuit of better margins and hence better returns. So much so that Android offers the escape up-market they have always sought. It enables vendors to abandon the profit-free feature phones to low-end entrants like ZTE and Huawei.

LG, Samsung, Motorola and Sony Ericsson all took the bait. They are racing as quickly as possible to turn their feature phone portfolios into Android portfolios. This is certainly something that Google also wants to see happen and has been planning all along.

However one of the consequences of the modular (aka “open”) approach is that the low end disruptors gobbling up low-end share are also motivated to move into the Android business as soon as it comes within reach.  The only reliably predictable consequence of Android will be the postponement of displacement of the existing brands by the low-end entrants.

Is this fate unavoidable for all brands?

Clearly some vendors see the trap. For all its apparent failings, Nokia saw this outcome and chose to attempt a “Hail Mary Pass” with Microsoft. The strategic point being that because they no longer had faith in their ability to execute on an independent platform, they would pick a platform that gave them at least some control or leverage. There are serious risks and problems with this approach–something which has been covered here already–but the bet being made is a clear rejection of the slippery Android slope.

RIM is trying to resist with QNX which is a similar approach but timing may also be the undoing of this strategy. HP’s approach with WebOS and Samsung’s Bada are also hedges to avoid this fate.

And what about Apple?

Apple is always skating in a different direction. iOS needs to be seen as not so much a phone platform but a computing platform. Given what we know, iOS was always conceived as the future of computing. Voice, after all, is just an app on iOS. So my expectation is that Apple’s iOS will continue its attack on the mobile computing market, skimming (or carving as the case may be) profits from the phone business to sustain its ultimate target of reclaiming the computing universe.

By this thinking iOS lives only by improving more rapidly than anything else in dimensions that redefine the basis of performance. In other words, doing more of what the iPhone did in the first place to set off this disruption.

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  • CndnRschr

    Several (most major) Android OEMs are hedging on Windows Phone 7, at least as a back-up but maybe as a long game. At some point, this is going to become an acute problem for Google. There is not much opportunity cost for Android OEMs such as HTC leaning towards WP7 as they are already paying Microsoft for the privilege of selling phones with Android. While its certainly less than guaranteed that Nokia will be able to efficiently convert Symbian users to WP7+, there will be a bump to Microsofts user base once Nokia starts releasing phones. That may lead to the tipping point against Android – nudged along by the Oracle suite and the decaying margins as low end makers enter the Android fray. As WP7 critical mass increases, so will the ecosystem.

    Apple is happily charting its own course. It is not immune to the vagaries of phone leadership but is investing in the "retention plan" such that the cost to switch of an invested iPhone ecosystem user becomes too much. Of course, this is also true of iPad users (and will begin to impact AppleTV owners). At some point, commitment costs/benefits of users so much favour Apple that they are, in essence, lifers.

    • Frank

      It's incredible that Nokia dumped Symbian given it's market share, even if it is dwindling.

      The strategy of Qt on top of Symbian (mid-range) and MeeGo (high-end) seemed a great strategy, even better with Qt on feature phones too, and would have seen Nokia's Symbian fans move up to MeeGo, with the high-end MeeGo devices helping fuel the range of apps available on Symbian devices too.

      Instead Nokia gave it all up for an "ecosystem" with 1% market share and one that it will, in reality, have little or any control over despite claims that it will be able to differentiate. Utter, utter, madness.

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

        Frankly, you focus on the artifacts instead of the essence of Nokia's situation. Their ability to execute competitive features on their legacy platform was severly compromised, as evidenced by the lipstick-on-a-pig products released in recent years. This was further complicated by shift in importance of third party developers for the vendor's success. Creation and maintenance of a top-notch software development platform (languages, APIs, tools…) proved to be out-of-reach for even the most software savvy phone company – Nokia.

        I believe the root cause of their inability to mount effective response is their internal, platform and portfolio fragmentation. This results in huge duplication of efforts and massive development/testing/support overheads and severly limits the speed of development. When Apple invaded their field, they simply competed in different sport.

      • Eric

        You're not considering what Nokia had in it's future strategy.

        Their "legacy" platform and lipstick-on-a-pig products (as you call them – not disagreeing) all pre-date Qt.

        Post Qt products (ie. N9/MeeGo, N8 etc.) are all very respectable and for Symbian, with more improvements to come with Anna/Belle. Qt has/had a lot of developer support, which would have grown even more with the synergies to be had between Symbian, MeeGo and even S40, but Nokia burned their developers when they leapt from their so-called burning platform. Not only did their customers desert Nokia at that point (almost always for Android and also iOS, but never WP7), but so did many Nokia developers (same destination as the former Nokia customers).

        Nokia had done all the hard work with Qt to get to the point where it could start to reap the rewards, but for reasons few can still work out they bottled it and threw it all under a bus. The most obvious reasons seem to be a huge rush to improve profitability by dispensing with the costly development and R&D departments, which leaves Nokia severely weakened and unlikely to make serious profit in the longer term (as most vendors do that own their own platform).

        Nokia could easily have wiped the floor with Microsoft and WP7 with the Qt strategy it had in place, but hired the wrong guy who seemed more keen to keep his old company afloat in the mobile business than do what was best for his new employer.

      • Leo

        I couldn’t have said it better. Was utter madness. Gave up my WM6.1 device for a galaxy S2 only last week. Was a tough decision as id been using windows phones 8 years

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

    “iOS lives only by improving more rapidly than anything else in dimensions that redefine the basis of performance.” (emphasis added)

    I've certainly had sentiments like this. But I thought that Apple would also attack the low end of the market, where presumably people are LESS willing to pay for cutting-edge capabilities and sleek UI. Doesn't this logic you've posted here make the iPhone nano concept look like a distraction from Apple's focus on the leading edge?

    • asymco

      Depends on your definition of "living". The expansion into mid/low-range products is, I believe, tactical for Apple. They are certainly not discouraged by the market, but it's not the main motivation. Apple creates product as new market disruptions then back-fills into the existing markets. By this logic the new market product can be seen as "premium" or "high-end" because it tends to compete with nothing at all and can be priced accordingly.

      So my view is that Apple did not enter into the Phone business to become the new Nokia but will take on that role as long as it does not impede their ability to improve their products.

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

        This fact touches on another challenge smartphone makers and platform providers (Google) face when competing with Apple. Philosophically, Apple isn't directly competing in the mobile phone space. Instead it makes a small computer that has a phone app and that is making the single/dual-use devices like dumb phones, cameras, DVD players, and GPS devices less interesting. While Apple takes an overarching approach to being best at what it does (touching on many businesses areas) and then applies what it learns to lower-end markets, its competitors are only trying to match Apple for a specific product, their phones or their phone platform. This means competitors never really see what they are competing against when it comes to Apple and ultimately have much less development potential.

      • Anthony waller

        I think in the context of the future of iOS it’s helpful to examine both Apple’s history with device categories and Steve Jobs’s statements.

        As mentioned at D8 in June 2010, Jobs sees the future of the PC platform as a pickup truck – not everyone will need a more awkward utilitarian machine. Instead, many people will use something else. Some will still have PCs of course – maybe the PC will still even be the dominant platform. Consider that for many years, until maybe 2008(?) the ford f150 was the top selling auto in the us. Pickup trucks are still popular.

        But not everyone drives a pickup. And that’s where Steve thinks “the puck is going to be” so thats where Apple is skating.

        Now consider how Apple managed the “death of the iPod.” It used to be a huge part of their profits. They’ve hidden the decline with the iPod touch, a device where “music” is just another app. Even the nano now looks like iOS, and reflects the reality of a tiny music playing devce for specialized needs or fashion (wearing it as a watch) when all your other iOS devices have the same fuctionality.

        iMessage is a strong indication of where apple is going here. Unified messaging on all iOS devices. Carrier free. FaceTime brings video. All Apple is missing is some voice protocol (imagine if they had bought grandcentral and a sip company instead of google). Voice is hard. Legacy phone numbers, legacy regulation, 911, legacy text and mms support (google voice doesn’t even handle these well). But Apple is pointing at the future.

        There wasnt an iPhone “maxi” and an iPod touch “maxi” edition. There was just the iPad – with 3G, or with wifi. Contrast with the iPhone.

        Android still doesn’t have a coherent long term story like this. Where does Chrome OS fit in? Are android apps the future or web apps? Why aren’t there huge sales of an android iPod touch like device?

        Android has enormous success supplanting feature phones and cheap smartphones. It’s better than windows mobile 6.5 or most of blackberrys offerings, and nokia seemed to just melt away on their own. Android is starting to own the cheap (by first world 2 year contract standards) phone market.

        But iOS may own the OS world.

        Imagine a solid competitor to the iPod. The last gen Zunes would fit the bill – except pretend they sold enormously well and were popular. Where would Microsoft be now with this platform? Music is just another app. Apple dropped the iPod and nobody noticed, because they had their OS story clear, and the roadmap is obvious and compelling.

        There’s no easy roadmap from Zunes to a phone/OS. Microsoft has in fact dropped the Zune platform for all intents and purposes, and rebreanded it as an app on windows phone ( or perhaps they are calling it an “experience” ).

        Phone is just another app. Apple gets this. Android didn’t. iOS started life as an operating system for a “safaripad” and shares a lot of guts with Mac OS X. Or “OS X” as apple is branding it now – no “mac” or PC required.

        Android began as a phone OS, fir phones, an “open handset” project, with people who worked on phones. Good people. And they’ve done well. But the iPad caught them by surprise. So now it’s “phones + tablets.”

        Apple doesnt think this way. Apple already runs iOS on appleTV. They aren’t doing anything special with it, but it betrays their philosophy. (googleTV is a joke and can be ignored). Apple sees iOS as the future for all their devices.

        What will Google’s response be to the next iPad? Maybe there won’t be another iPad like product from Apple. But if there is, it will probably be very different from a phone or tablet, yet will still share apples “platform of the future.”

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

        (sorry for the typos, I commented on my iPhone and can't seem to edit now)

      • Dianne

        Um, there's a certain fantasy going on here, given that iPhone originally shipped without any support for third party native apps, and that was a core part of Android since day one. And Android has most certainly been designed with the phone being just another app, both in architecture as well as UI.

        Not to mention that Android was laying its own groundwork for supporting different screen sizes before the iPhone because iOS, and is today shipping not only on pure tablet devices but also pushing farther up into PC territory with things like the ASUS Transformer and native support in the OS for rich trackpad-based interaction (as well as mouse input as a secondary mechanism).

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

        Nice, but are those strengths or distractions?

      • Sander van der Wal

        iPhone originally shipped without third party native app support, but that doesn't mean that third party support was not part of the original iPhone plan. There isn't *that* much difference between in-house native app support and third party native app support at the API level for general purpose computers targeted at the mass market.

      • davel

        @Dianne

        If they were laying groundwork for different screen sizes before the iphone then why did it take so long to scale to tablets? why did they have to fork another branch to deal with tablets. if they did as you say it would be one code base and would extend seamlessly.

      • nathan

        They moved to another branch to set their tablet OS appart from their handset OS. You can't tell me the iPad doesn't look/act exactly like their phone does. Android wanted a different experience for a larger screen. And Honeycomb also is scalable(sp?) to phones. But Google hasn't released the code to the OEMs because they are still fine tuning it. Just pull up the code for Honeycomb and adjust the resolution. Boom it's now the same layout as what is running on their phones. The next iteration of Android will be more uniform for both handset and tablet devices. Plus Android is still in its infancy.

      • davel

        @nathan

        That is not what I have read. Also Android is older than iOS. My understanding is that 3.x is not phone capable. I was surprised when I heard about the code forking. It seems that from everything I read about Google that everyone does their own thing. So there is no code sharing and it is not as easy as you say.

    • Joe_Winfield_IL

      Not necessarily.  Last Week, Mike Abramsky from RBC capital put out a note after meeting with Tim Cook and Peter Oppenheimer.  Among other things, he grilled the two honchos about the cheap iPhone.  His quote (and I'm not sure whether it was Cook or Oppenheimer), was that Apple wouldn't release such a device unless it was an “innovative, category-killer experience” like the original iPhone.  Who knows what they are talking about, but it probably isn't just a watered down version of what we already know.  iPod Nano had a different value proposition than iPod classic when it came out.  It wasn't an iPod for those who couldn't afford the "real" iPod.  Instead, it was an ultra-mobile device that didn't have moving parts  (it may have been the first signal that Apple was moving to solid state storage across its products).  Many iPod owners bought it as a second device for working out, while many new customers were brought into the fold for the first time.
       
      Maybe "dimensions that redefine the basis of performance" doesn't involve cutting edge capabilities and sleek UI improvements in the sense that you are thinking.  If Apple can preserve enough of what is unique to iOS, the device doesn't have to be better, faster, lighter; it needs only to be different.  Apple could theoretically entice new users with a "gateway drug" of sorts by putting out a cheaper phone.  Also, much has been made about the lock-in benefits of iCloud.  In addition, the service will likely make migration up the product ladder exponentially easier than in the past.  These "gateway" buyers will have the opportunity to buy media that can be shared across the portfolio of products, and documents will never be lost again…as long as the next computer is a Mac.

      • tfaulk

        My guess would be the prepay innovation will be almost entirely reliant on iCloud. Flash certainly isn't the most expensive component, but they can cheap around the edges and eliminate Flash storage nearly entirely. Not only will it be cheaper, but it will necessitate a usage shift for the user, propel the user more forcefully towards cloud-based apps and storage. Thus the lower end model will actually be more of a gateway drug to iCloud than its larger, older sibling.

      • Alan

        Extending your thoughts Joe, what if their budget iPhone isn't an iPod Touch replacement but rather a turbo charged iPod Nano? Software SIM card, limited set of apps (but all purpose built), limited storage but plugged directly into the iCloud, gateway drug level platform draw, priced for the developing world and young children, and designed to be a fashionable, non-cannibalistic second phone for existing customers (Dick Tracy watch, anyone?).

        Now that would be a category killer.

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

        @Joe_Winfield_IL wrote, “… the device doesn't have to be better, faster, lighter; it needs only to be different.”

        If you mean “different” as “different gestalt than Android/WP7/… ,” I personally think that's the beginning of the end for Apple's ability to capture share, when it has to worry about “differentiation” instead of advances that excite customers to hire them, disproportionately.

        Maybe you meant, “different” from the top-of-the-line iPhone model, so as not to cannibalize their higher-price products, I likewise think that fails to meet different customers' needs, but focuses on Apple's needs. Also the beginning of the end.

        I think that “Different” needs to somehow mean, “tuned to clearly, and significantly different needs” of a different market than Apple currently serves. That might mean users willing to put up with smaller screens, less checking out Facebook friends, slower access consistent with 2G/3G networks, but I doubt it means fewer hours away from the charger or non-customizable apps (aka, a feature phone).

      • Joe_Winfield_IL

        Wow, what a thorough parsing of the word "different!" My iPod Nano commentary was meant to portray "different" as a product addressing a different customer. It will somewhat cannibalize the base, but should also greatly expand the addressable market. The Nano was an iPod for the gym, or for those who valued the candy colors or portability of the new body. Other than storage capacity, users didn't sacrifice anything by migrating from the HDD iPod classic to the Nano.

        I'm not smart enough to guess what the final product will look like, but I have a few general thoughts:

        -I don't think they'll change screen size. Jobs made a big deal about minimum size for iPad on a conference call last year. The same UX issues will arise on a very small touchscreen phone. Also, a smaller screen might require a different resolution, messing with app programmers.
        -I don't think it will restrict access to the app store or iCloud in any way. These services are what differentiate the iPhone from everyone else. Apple's not interested in weakening the halo.
        -I do think the screen will be cheaper. Lower brightness/contrast, inferior viewing angles, etc.
        -The body likely won't be all glass and stainless steel, but instead will likely feature some cheaper materials. I wouldn't be surprised if they go back to the rainbow of colors like with iPods. A cheaper phone is less likely to be protected in a case, and the colors will be very visible on the street. This type of visibility would play to the vanity of a good chunk of users, especially younger ones.
        -It will probably borrow some guts from existing iPhone builds. This is practical not just from a cost standpoint, but also manufacturing/supply chain. They can continue placing orders for existing parts while bringing on new capacity for the iPhone 5.

        As for pricing, I have no idea what Apple is targeting. In the US, the speculation has been $400 to allow for a "free" phone on contract. This is a nice break, but doesn't seem sufficiently low to grab the feature phone holdovers in developing countries. Also, the 3GS already does an OK job for the subsidized markets. At less than $50 on contract, it's pretty cheap. My guess is it will be cheaper than $400. At $300-350, it will be more in reach for unsubsidized buyers. In markets where subsidies are the norm, the carriers won't have to make up their full $400 subsidy, and can charge less of a service premium. If buyers could get the phone for free and pay less monthly for a similar experience, it will be a very different product than the iPhone 5.

    • name99

      "Performance" doesn't have to mean hardware and per-device costs.

      An example is iCloud. iCloud matches exactly what Horace is saying — it defines a NEW dimension along which computing devices are now expected to perform, namely the dimension of seamless synchronization between devices. At the low end, iCloud costs Apple very little — people with one iOS device and no mac won't use it much. But it define a direction and an aspiration that no other vendor currently matches.

      I've talked before about how the interesting part of iCloud is between-devices automatic sync, not the dropbox or music locker aspects. HOWEVER these aspects become interesting in the context of users with a single iOS device in the context of "sharing". A few different models suggest themselves:

      - "family sharing". Mom and Dad and little Tiffany can all listen to each others music. Naturally Apple will have to license ANOTHER round of agreements with the content vendors, and there may be some sort of fee associated with the ability to "pair" your Apple account with another account, but I could see this coming.

      - "guest" access to an iOS device. I sign in, on your iOS device, as myself, and get to listen to my music. I'm not sure this is very interesting most of the time, but I expect it's also coming simply because it fulfills a need we all may have occasionally — most likely in a scenario like a kid loses their iPod Touch and is now complaining.

      - Zune style "sharing" — I can push a song (or an app? a book?) I recommend to your device, and you get to listen to it three times, or use the app for a day, or read 20% of the pages of the book, before you can no longer access it.

      OK, so these are interesting business models. And how can their competitors easily compete? For the most part they don't have a strong relationship with the content vendors, on the legal side; and they don't have the infrastructure (APIs and backend hardware). MS is probably the closest, but they are so lost in the mirage that is Windows 8 that who knows what the heck they are thinking. If they couldn't execute in this space with Zune, why are things different now?

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

        There must be several dozen ideas like this that are queued up for productizing once iCloud takes off. My own personal favorites would be for Apple to pay the data charges for Apple-sponsored items such as iCloud downloads or ALL ads or videos with Apple sponsorship (ads that Apple shows). This provides users with a direct benefit in cost control while allowing Apple to buy data in bulk, even from the low-cost provider in any micro-geography. (I DO note that Apple has patented a system for real-time auctions of spectrum that could support this, the same way that AdWords would be useless without auctioned keywords.)

        But while these are great for the existing marketplace, they are maybe not the critical elements in the efforts to put a few billion iPhones into more price-sensitive markets.

    • Hamranhansenhansen

      The high-end is not the only leading-edge. The iPad may be the most leading-edge computer, but it is just a low-end Mac, a $500 MacBook. Apple's PC business is Mac+iPad … introducing a low-end $500 model is the best thing that ever happened to their PC business. They make less per iPad than per Mac, but they sell more iPads.

      If you look at the MacBook Air at $999 and iPad at $499, then look at iPhone at $499, you can imagine there is a missing $249 phone product that could be just as good for Apple's phone business as iPad was for Apple's PC business. The iPod touch is already standing-in there at $229, proving the case. It would sell 10 times as much with 3G and a $30 per month data plan.

      • EWPellegrino

        The cost of making an iPad is a fraction of the cost of making even the cheapest Air – and yet performance doesn't suffer because the iPad is running iOS – and so can operate well with a cheaper processor, less memory etc. etc.

        But the iPhone is already an iOS device, so there's no way to do a similarly cut down device that still acts as a piece of top end kit – any drastically cheaper iPhone must either have lower build costs or lower margins, probably both. Apple may be able to do it successfully but it's not simple.

    • poke

      A necessary component of developing iOS as a computing platform with telephony as one feature among many is moving away from the carrier subsidy model. Apple has been using carrier subsidies to fund the development of its platform but eventually will have to drop them and enter the prepaid market. I think a low cost iPhone is less about getting the low end of the market and more about long-term disruption of the distribution model. Best to think of subsidies as an anomaly and prepaid as business as usual for Apple.

  • davel

    It was recently reported that Google's battle with Oracle is not going well in the courts. How would Google being forced to license Unix and Java ( as well as potentially its licensees ) affect your calculus.

    You have repeatedly pointed out that only Samsung and HTC are profitable Android vendors. Would this cause Android to disappear or have its market share drastically reduced?

    This could increase Apple/Microsoft and even RIMM or HP's share of the market with the added cost of doing business with this ostensibly 'free' platform.

    • asymco

      I don't think issues related to IP will affect the trajectory much. IP litigation is like taxes or natural disasters. You just deal with it. It adds friction, cost and inefficiency but if the opportunity is big enough, these irritants are done away with.

      Of course, if the opportunity is not that great then the friction of doing business will be unsurmountable. That's the bet Microsoft is making. By adding friction to the system, the hope is that vendors will hop onto its platform(s).

      • JessiDarko

        If Microsoft is adding a $15 tax to each android unit, and Oracle gets the right to add its own tax, do you think it is going to be less than $15 per unit? And then, there's Apple. Every touch android device is violating Apple patents.

        Either Apple has full rights, in which case, android has to be removed from the market completely. Or the government steps in and violates apple's rights, and forces them to give android a license… I'm guessing Apple should be able to get $15 per unit, but given the amount of patents they have, likely they'd get $50 per unit.

        So, then the friction is android paying $45-$80 per unit in licensing fees. Do you really think that will be just an "irritant"?

      • asymco

        $15 per phone is probably the limit to what is tolerable as a license fee before the device maker decides to switch away from Android.

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

        @JessiDarko, there's some very informed and reasonable speculation about $ amounts at the FOSSPatents blog. From somebody who's been heavily involved in legal cases.

        If I read it right, Florian sees costs adding up to something like $20 – $30 per handset, but lots of game theory needed to leverage patent claims that work fine in markets with strong IP laws but NOT in China/Africa/SouthAmerica. Apple (AHEM!) might license rather than win in US/EU/JA and lose elsewhere.

        You might enjoy it. Walt says, “check it out!”

      • davel

        As a follow up to this it appears a German judge has ruled for Apple and banned the Galaxy Tab in most of Europe.

  • Roo44

    Two of the most interesting storyline’s will be how Apple keeps from being commoditized as the race to the bottom begins and how does the Android platform avoids a death of a million cuts from sharp pen patent lawyers.

    • David

      How is this really an issue? Even in the PC world, they aren't commoditized.

      • Hamranhansenhansen

        Yeah, Apple started making Intel PC's about 20 years after Intel PC's had been commoditized, yet Apple's Intel PC's are not commoditized.

        The way they avoid commoditization is the software and services. Mac OS and iOS are not commodities. iCloud and AppleCare are not commodities. Also design: Unibody is not a commodity, and Retina Display is not a commodity. Also brand: they have a brand that is so strong, people will buy simply to get the brand.

      • obarthelemy

        commoditized no, but marginalized. if they hadn't come up with the iPod/iPhone, Apple wouldn't have survived in the PC market.

        It'll be interesting to see if history repeats itself in the phone market: proprietary platforms (Mac, Amiga, Atari then, now iOS, Symbian, RIM, Palm) vs open one (Wintel, now Android). My guess is it will turn out the same once supply problems are solved: Apple won't fight on prices, and someone in the android camp will, even if they don't have the ecosystem to transform 10% margin on hardware into 50+% margin apps/content lock-in the way Apple does.

      • simon

        "if they hadn't come up with the iPod/iPhone, Apple wouldn't have survived in the PC market. "

        I think it's interesting to note that the fact shows that Apple remains profitable selling PCs whereas IBM and Compaq have both quit the market.

        And Symbian wasn't proprietary. It was "open." Ditto for Windows Mobile which was "open," but failed. Being open doesn't really guarantee success and being "closed" doesn't guarantee failure. My guess is that Apple will aggressively seek to expand into the lower end of the smartphone market just as they did with iPods. The market is already flooded with cheap smarphones but there will be plenty of room for Apple to expand.

      • gslusher

        "proprietary platforms (Mac, Amiga, Atari then, now iOS, Symbian, RIM, Palm) vs open one (Wintel, now Android)."

        Just how was/is Windows "open"? The vendors (Dell, HP, etc) can't alter Windows one byte. They can add their own stuff, but they have to leave WIndows pretty much alone. They also have to meet minimum hardware requirements–no more throwing in just any graphics card, expecting the user to figure out how to get it work with applications, for example. Windows is every bit as "closed" as OS X.

        Instead of "open" vs "closed," Horace's categories of "modular" (different companies produce the OS and the hardware) vs "integrated" seem to better fit the situation in both PCs and mobile devices.

      • David

        As many have pointed out, the "open" argument doesn't always lead to success and certainly not to profits.

        It has been a decade since the iPod and 3 years since the touch and we've yet to see price competition on that front. In addition, 15 years since Linux became truly viable and it cannot match closed, proprietary Windows or even MacOS for penetration.

        Cheap doesn't win the day.

      • Joe_Winfield_IL

        "If they hadn't come up with the iPod/iPhone, Apple wouldn't have survived in the PC market." This is like saying:

        "If Chairman Mao hadn't formed the Red army, China wouldn't have ever been communist."

        "If Xerox had never invented the ball mouse, we wouldn't have seen the advent of GUI-based computer interaction."

        "If Google hadn't come up with Page Count, indexed search wouldn't be a multi-billion dollar business,"

        "If Sherman hadn't marched to the sea, the US and Confederacy might still be two separate countries today. Hitler might have won the war without the US support"

        Who cares what would have happened in your made up scenario?! If you could change history to eliminate a significant event, it's impossible to know what the actual outcome might have been. This is a silly hypothetical.

        As for your Open/Closed argument, see: ancient Greek democracy vs. Roman empire. There are dozens of examples of closed systems dominating vs. open ones, but none underscore the importance of a central strategy better than Athens. In theory, the Athenian model was fair and allowed all equal rights. In practice, it was a mess; voters had too many disparate opinions to create unity, and most people couldn't be bothered to vote on every little issue. During times of conflict, this democracy was disastrous. By contrast, the Romans thrived in battle. With their central planning, they could allocate supplies, coordinate vast resources, and control their armies both tactically and strategically. History tells us which side won out and ruled the world for centuries.

        The moral of this story is: conflicts are much easier to navigate when you can make a decision. The only way for Android to mimic iOS seamless integration is for Google to wrest control from their OHA partners. Even then, licensing is not the same as a fully integrated system. But if Google ever decides to really take ownership of the entire Android experience, your whole "open" argument is bunk anyway.

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

      You don't have to look more than a couple inches down from the top of this post to see that the race to the bottom is being run full tilt by Android manufacturers.

      There's even some suggestion that suppliers — Samsung displays & silicon; nVidia's CPUs — are also pricing below cost trying to lock up market share.

  • Mayson Lancaster

    The OS market share stat that I'm waiting to see is the churn, or switch rate. I've seen a couple of times that surveys indicate low single digit of iPhone users plan switching to Android, while around 40% of Android users plan to switch, but I'm curious to know what's actually happening: are Android users coming to end-of-contract actually going iPhone in large numbers?

    • asymco

      There won't be much data for a while because the vast majority of Android phones (and iOS devices) are the first ever owned and are still in use by the owner. I would expect churn out of Android to be measurable in 2012 and consistent by 2013.

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

    Responding to both @davel and @Roo44, some speculation:

    Envision a scenario in which Google is forced to pay $25/device or thereabouts, to Oracle. As I recall estimates that this is Google's revenue per unit, this turns their net revenue stream to zero. They would therefore need to have the OEMs pick up this cost (as it would make their “open/free” mantra look foolish if they were to charge their patent costs).

    However, if the Microsoft licensing effort takes hold, Android now costs about $50/unit to license. This makes WP7 a bargain at twice the reported ~$15. If Apple achieves its patent suit goals (which are not for revenues, but to preserve exclusivity on Apple's look'n'feel), Android starts looking distinctly up-priced but down-market against its two strongest competitors today.

    In this scenario, Android's survival depends on Google dramatically out-doing Apple on exactly the business model Horace cited for Apple: “…improving more rapidly than anything else.” If it came to pass as above, it would be huge for Microsoft and Nokia, even allow RIM to get back into the game. Bada might carve out a niche (although who knows what evil lurks in the heart of it). But it could well be the end of the road for firms that've bet the ranch on Android, essentially all the firms on the AMP chart not mentioned yet.

    @Roo44, this does NOT depend on the “death by a thousand cuts” you asked about. Those are serious nuisances, well worth fighting even if you know you will lose, to be sure. But Apple has withstood many of them and Google can too, if it can keep its core business intact.

    And to all: while this seems a plausible short-run outcome, I'll leave it to others to consider how likely it actually is, and to conjure up the many other twists and turns we'll see even IF it comes to pass, in an industry where so many billions of dollars are at stake every year and technology, markets and business models are in such change.

    • davel

      @WaltFrench

      If Oracle wins their argument as you state the whole value proposition of Android for the vendors goes away or is seriously dented. Also it calls into question Google's whole foray into this arena. I do not know what Chrome's base is but I expect it is similar. In the end Google is about search and ads. Perhaps they just give up and work on their applications Office/Maps/YouTube/etc.

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

        Ummm, I thought I made just those points about Google and the Android OEMs. A fixed $XX tax on Android, per se doesn't seem to favor one or another of the Android group; it would affect Android's attractiveness as a platform vs other 3rd party products.

        Above, Horace seemingly offered his opinion that the IP battles are not likely to be consequential. As I write, news across the wire that the HTC Flyer is added to Apple's complaint with the ITC and FOSSPatents, reasonably cool-headed during the time I've followed the site, is getting more declaratory about the impact on Google. I guess we all wait and see.

      • asymco

        Not quite. I wrote *if* the opportunity is large enough then the IP issue is a speed bump. The condition is entirely dependent on whether there is profitability with Android. As IP pressure piles up, the condition is not met.

        The IP weapon is crude and has nasty side-effects but it's being deployed because Android is difficult to counter using conventional means.

        What I don't want to say is that IP will decide the game in and of itself.

      • http://twitter.com/virg1l @virg1l

        Aren't you ignoring the rest of the world? Samsung is hugely successful with Galaxy S II, without even selling it to US. Even if all those "doomsday" scenarios materialize for Android OEM manufactureres, they can still retreat out of the US, without going bankrupt overnight. Yes, US is an important market, but don't confuse it with *the* market.

      • EWPellegrino

        The legal battle is already spilling out to the rest of the world. Apple has won an initial injunction against the 10.1 tablet in Australia, Samsung has sued Apple in the UK and Apple is likely to retaliate there – we know it has British patents that are applicable.

      • davel

        And now Germany which encompasses most of Europe.

      • asymco

        Most, if not all of Apple's patents are registered internationally (or at least I should hope so as it's only marginally more burdensome to do it vs. the US). The rulings in the US are only for actions initiated there. There is no reason why Apple could not dispute its IP in any and all patent courts world-wide.

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

        FOSSPatents makes the case that while some efforts are EU-wide, most patents require filing in EACH EU nation's patent office, a non-trivial expense.

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

        Part of the reason that IP-oriented lawsuits are so expensive and clumsy is that they happen only AFTER firms have failed to reach the ordinary- or cross-licensed deals that have been a part of business since patents first started.

        EVERY handset manufacturer pays to license the patents for GSM, CDMA, LTE, etc., as needed, and wouldn't consider otherwise. (Sometimes their fees are actually a barter of similar IP, of course.)

        Even Google has licensed important patents, such as the one that supports AdWords. It's only when they got into a huge rush to gain dominant market share that they thought it the best business strategy to take what they needed and deal with a little messiness afterwards. I believe the “nasty side-effects” are actually inherent to the business strategy.

        “Better to ask forgiveness than permission.”

    • Steve Setzer

      As an IP attorney and longtime watcher of software litigation, I would suggest that we not read too much into the current patent lawsuits. Lawsuits always start out with many claims and end up with only a few (or none) remaining by the end. FOSSPatents sees everything as sunny for Oracle and gloomy for Google; the truth is probably far more nuanced. If I were a betting man, I would put down money that Oracle will not get a dollar from Android, for three factors: (1) patent claims that get thrown out by the Patent Office reexamination process before the trial begins, (2) patent claims that get invalidated at trial, and (3) Sun's past behavior with regard to those patents (open source Java, Schwartz statements, inaction in the face of Android Inc's known development efforts etc.)

      • asymco

        So you must be familiar with the NTP vs. RIM litigation.

      • Steve Setzer

        Let me correct my prior statement–often , not always.

        I follow cases in some specific areas (Blackboard), but I did not follow NTP much. It's definitely a mess and RIM made some major bungles (demoing with a newer version of the alleged prior art?).

        I realize that the Oracle litigation COULD hurt Google badly. But it's very early days in the Oracle litigation, and my opinion so far conflicts sharply with Florian Mueller's.. I did follow SCO, which started out with "billions" and has twice come to the verdict that "well, you actually don't own that." Google is more competent than THAT, anyway.

  • asymcofan

    "Apple’s iOS will continue its attack on the mobile computing market, skimming (or carving as the case may be) profits from the phone business to sustain its ultimate target of reclaiming the computing universe." A thousand times yes. The phone industry is fighting over the phone industry. Apple's vision, and playing field, is much larger.

  • asymcofan

    A follow-on thought: Not only has "phone" been downgraded from an essential personal item to an app on a more comprehensive device, but even "phone" as app is losing relevance. Texting has replaced much phoning, and, just as one data point, I rarely make calls or leave or receive voicemail anymore. Text and, when necessary, video calls, are the future.

    • gslusher

      Several of the teens I teach (riding) have said that about the only people they call or receive calls from are adults–their parents, for example. Among their friends, it's nearly always texting. One said that texting is "private"–no one else can see what she does. On the phone, she risks being overheard. Few of them have Internet-capable phones–their parents don't want to pay the data plan fee and they are concerned about privacy (e.g., if the phone is stolen), but they do use Twitter via SMS when they want to "broadcast" something. Their requirements seem to be texting, photos, and music.

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

    The more time progresses, Nokia's rejection of Android and their previous 'peeing in their pants' comment looks more and more like the right thing to do.

    I get the feeling they're playing the long game and Elop isn't as stupid as he first seems, Symbian to Windows bungling aside. Nokia are actively hiring developers for working on the N9's OS (be that MeeGo or Maemo with a twist) so there's a Plan B there.

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

      Well, I guess that's better than RIM making across-the-board cuts when they are in a similar race for survival. Still, one has to wonder how their efforts can pay off. The last demo I viewed on YouTube made it seem they have a lot to catch up on to make the smooth experience people tolerate these days.

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

        I guess you've not seen an N9 then Walt.

        Try http://swipe.nokia.com/

        Don't confuse Intel's MeeGo UI with Nokia's.

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

        I don't think enough has been said about RIM's outright insanity with the cuts to it's workforce. RIM management seems so out of touch with reality that they seem to think cost cutting tricks to appease shareholders is going to bail them out of their problems. Apple, and I suspect the other handset manufacturers, are adding staff as quickly as practical to take advantage of the growth of the market.

        RIM's real problem isn't one of timing, it is one of management, a management that is not living in reality.

    • Hamranhansenhansen

      Do you think Apple has a Plan B? No. Their Plan A is "make the best phone we can make" and their software is OS X and they just have to execute all day long.

      The game was already lost before Elop got there. Nokia needed to become a software company about 5 years ago. All this MeeGo Maemo crap should have been an internal Nokia OS effort with the highest priority, but instead, they made many hardware variations, all with bad software, and now phone hardware is commoditized, assembled in China, the software is the only value. So Elop had to hook up with a software company.

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

        Apple doesn't need a Plan B, it's their OS and their destiny.

        Nokia on the other hand DOES need a Plan B because their Plan A is to do what Microsoft tell them to do and hope enough USAians buy it.

  • http://www.informationworkshop.org Mark Hernandez

    After reading all this, it occurred to me that we should not take our eyes off the **characteristics of the customer in assessing where the platforms are headed, and how soon**. Here's the analogy that came to mind…

    When customers move from a feature phone to a smartphone, it's like moving from a rural farm to a big city, and they'll move to the nearest city, whatever is convenient in their eyes at the time (price?).

    And they'll be stuck in that city for a while (2-year contract). And if they're fine with where they live, they'll just stay there, as most people usually do. They've become familiar with it.

    Something strong has to motivate them to move to a really wonderful city, like Chicago, San Francisco, or New York.

    Google and Android might be like my hometown of San Diego, with no classical music station, little culture, and an awful hodge-podge of inconsistent and bad architecture from the 60's. Apple might be like Chicago — beautiful, consistent brick and stone look and feel, trees, deep in culture, architecture, history, food, opportunity.

    People might see Chicago on TV and want to move there, but something big has to motivate them to acutally move. It's not likely to be simply because it's designed better or looks prettier. Moving is hard, and expensive in many ways.

    The challenge is enticing people to move away from where they live to your city and then stay. Just because something is better isn't good enough. It's got to be a big motivator. (Of course, the best strategy is to get them to move to your city first. :-)

    The customer is not aware of, understands or cares about what we're talking about here. To really understand where the markets are moving, I think it's important to see the world through the customer's eyes. What do they see? (and on a culture by culture basis).

    I know most everyone knows this, especially Horace, but I'm just mentioning this to help keep things in perspective. A corporate strategy may have little effect on actually getting people to move.

    With so many people currently living in the city of Android, and many more moving there daily from the farm, well, you can take the analogy from there.

    • EWPellegrino

      Hmm, for that analogy to really hold the iPhone would need to get freezing cold in winter and roasting hot in summer while android stayed nice all year round. Oh and I'm now going to have to figure out what Apple product corresponds to the Bean – whatever it is would have a glossy screen.

      More seriously I don't think Apple has a problem pursuading people that they want to move to their city. For starters there's the iPad, which non-dogmatic android owners seem to love just as much as iOS owners. All of the purchase intent surveys I've seen show iPhone very high, generally much higher than actual sales – which would indicate that people want to move to Apple, they just can't afford to.

      • http://www.informationworkshop.org Mark Hernandez

        Ha ha! Touché my friend!

        Yeah, the weather here in San Diego is arguably the best in the nation. And since there's no snow here, I finally visited my friend in Chicago to catch a real "back east winter" — the day after the big blizzard of 2011 this February. But the first day I was there I slipped on ice and broke my wrist and I now have 2 plates and 8 screws in my wrist and could not type (i.e. work) for 6 weeks! My analogy has a major flaw!

        But the point still stands. My friend Claudio (a Brazilian who emigrated to the US) just bought his first smartphone, a Samsung Infuse (the one with the "tarantula" in the commercial) in spite of most everyone around him recommending an iPhone. He was so proud that he got Radio Shack to price match, and bought it for $50.

        He didn't care that over 2 years an iPhone's purchase price would cost him a little over 8 dollars a month. He's very happy with it. (I've played with it and it has a lot of "cool" to it, (really!)) He's also accustomed to a phone staying exactly the way it is (no self-upgrading of features along the way) for as long as you have it and you just get something better 2 years down the road.

        What did Claudio see when he went shopping for a smartphone? Why didn't he buy the phone we recommended? Will the Infuse become so irritating to him over the next two years that he'll get an iPhone? The modern smartphone landscape is only about 4 years old. What will things be like in 2 more years? Why is the curve for Android in Horace's graphs above expanding so rapidly and not leveling off? Something big has to happen to pull Claudio away from Android now. Our recommendations don't register with him.

        This is more about psychology, and much less about corporate strategy.

        And I believe that Apple understands the human factor better than anyone else, understands what's happening here with Android expansion, and is working on a solution. We just don't know what that is yet.

      • EWPellegrino

        Maybe the real analogy to Android isn't San Diego, it's London. Millions of people live in London, and for people from developing nations it's a beacon of prosperity. Many people who live in London love the place and would never leave, but many more do not and are stuck here for essentially functional reasons.

        Apple doesn't need to convert everybody who loves Android, they just have to provide a route out for the millions of people who use it but don't love it, who hate the cold soggy summers, the drunks urinating in the street, the insanely overpriced sandwiches etc.

    • name99

      I don't think this is a good analogy. It implies that switching from Android is a major hassle. I see no evidence of this. Switching from APPLE is a major hassle (and is only going to get worse), because Apple provides a whole lot of stuff the other guys don't. But switching from Android means giving up no essential apps, and your data (email, contacts, etc) can easily be accessed from iPhone. Rather than switching cities, it's like deciding to eat at Red Lobster tonight rather than Applebee's.

      Moreover, given what we have seen of Apple in the past, I expect this one-way "easy to switch-ness" to continue. In particular, I expect that if Android DOES become more sticky, Apple will provide software (the equivalent of what they provide when switching to a new mac, or switching from a PC to a Mac) to transfer your data from Android to iOS.

      The impression I get, from a variety of sources (blogs, friends, every day observation) is that
      - very few iOS users ever consider an alternative once they're part of the system
      - even naive iOS users use a few features of iPhone (for some it's mail, for others it's music), and are (slowly) using more as time goes by
      - Android users (especially the naive ones) do not seem especially wedded to their devices, and don't use power features. When I see an Android user doing anything but making a call, it always seems to be the stereotype you'd expect — the obvious male geek who enjoys screwing around with tech — not the sporty teenager, not the single mom, not the grandfather

      Of course we need data on stickiness, and it will be very interesting to see what Horace can come up with. But, honestly, I think few will be surprised if the data confirm what I've said above.

      • indian

         india

      • indian

         india

      • indian

        one key point being missed here is the large populations of Asia and emerging markets where price will play a key role and there from where i stand i see android with significant traction. for e.g. india sold 15MM smartphone 2011 majority being android next year 2012 expect anywhere between 30 – 45 MM and this will keep growing and android will soak this whole demand

      • indian

        one key point being missed here is the large populations of Asia and emerging markets where price will play a key role and there from where i stand i see android with significant traction. for e.g. india sold 15MM smartphone 2011 majority being android next year 2012 expect anywhere between 30 – 45 MM and this will keep growing and android will soak this whole demand

    • pk de cville

      Taking your direction:

      Suppose we talk about neighborhoods in the same city. Easier to move between, but each uniquely different.

      Android: Full of creativity and experimentation, but things break down more often and some blocks are just cheap and dirty knock offs. People living in the nicer Android neighborhoods might extend their lease, but they wonder if moving to iOS might be better; The ones in the cheaper Android neighborhoods might not have the $$$ to move upscale and are tired with dealing with repairs and disease (malware).

      Apple: Apple has one clean and cheery neighborhood. Maybe not as creative and diverse, but the people living there like its trouble free, clean, and safe nature. The motto: "It just works." Sometimes, someone adventurous tries Androidville out, but they usually return!

  • berult

    In 2007 Apple set in motion the dynamics of "thin client" artificial intelligence, riding the coattail of their iPod MP3 upheaval. There is simply no limit to formatting intelligence, awareness, cleverness; by definition, …if you happen to make it your business model, it will tend to self-sustain and grow as long as you provide it with the "ether", the medium, the language of existential 'consignment'. 

    iOS, on top of an iPod frame of mind, got the  ball rolling up hill from simple communication enabling processes to ubiquitously assisted thought processes. A momentous shift helped along by "mobilizing" Google's viral development model to blow the intelligence bubble quickly and irreversibly to a viably smart market-space configuration.  

    Very few really understand what is happening here. We're talking about augmented cognitive intelligence, …an  alerted mind …peaking out of plateaued doldrums, valleyed mind tricks, and tunnel vision queries. How many platforms are aiming that high on a corporate generic whim …all the while getting the timing just right for a most voluntary user commitment into long term inorganic intimacy?

    The iPod, smartly endowed with musical sense, is the precursor meme to smart platform therapy… …a tiny sphere of musical bytes bubbling over into an ancient philosophical construct, The Music of the Sphere… A particle broken into its component Universes, where have I seen that before?

    • obarthelemy

      I want some of what you're smoking.

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

        He's saying that the iPhone is the Cyborg Big Bang, I think. And he's smoking Positivist Scifi Post Structuralism. :D

    • RadarTheKat

      He's stating that Apple's products, rather than being mere enabling machines, capture the essence of various human endeavors/behaviors. IOW, Apple enables music, computing, communication, navigating, etc in just the way a human would want to interact in these realms/tasks. While Apple provides each user with essentially a task-based machine, the machine is the last thing any user sees.

  • http://www.ringcentral.com/features/toll-free-numbers/800-numbers.html 800 Phone Numbers

    It occurs to me that since Samsung and Apple both sold about 20 million phones last quarter if we're to believe Sammy's stats, your data above shows that Sammy's 20 million phone sales were far less profitable than Apples. Presumably that's because they were either at a different price point or they weren't all sold but part of BOGOF strategies. Maybe what we need to do is start to segment smartphone sales stats into high end, mid priced and low end phones. Just as Apple sells 90+% of laptops over $1,000 I assume Apple dominates the high end smartphone market.

  • yet another steve

    One small quibble: "reclaiming" the computer universe? For all of its high profile history, Apple has always been the scrappy upstart in the computing universe pre-iOS. Mac was always a minority platform, even in its early heydey. Or in your language… Apple was never the "incumbent." MS platforms have always dominated from the launch of the original IBMPC (which predated the mac.) Before that you have the Apple II days in which ALL of the PC makers of the era combined were simply scrappy upstarts in the computing universe. Apple's first taste of dominance wasn't in computing, it was in digital music.

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  • http://gplus.to/luke.lin Luke Lin

    "The only reliably predictable consequence of Android will be the postponement of displacement of the existing brands by the low-end entrants. "

    If the prediction above is right, it's applied to Windows Phone, too.

    By the way, the first bada phone was commercially released in June 1, 2010. So it did not take only two quarters and its market share is overestimated too much.

    • asymco

      It does not apply quite the same way to Windows Phone because Windows Phone has a cost associated with licensing. It also has higher obligations in terms of compliance with terms. But generally, you're right. Licensing an OS when the value is shifting to software is a difficult strategy.

      Regarding Bada, two quarters refers to the estimates available for volume shipments.

      Bada's share was estimated by Canalys last quarter and my own estimate here: http://www.asymco.com/2011/08/02/the-samsung-hedg

      If there are other estimates you are aware of, can you share them?

      • http://gplus.to/luke.lin Luke Lin

        Android has a cost, too. It's associated with patent licensing.

        In your estimate about bada's share in Q2'11 , the shipment of 2Q'10 is 1 million, which was 1%~2% in that period. And Samsung shipped other 4 million bada phones in 2H'10, which was 3%~2% in Q3&Q4.

        If bada phones could have a sale of 3~4 million in Q1'11 and 4~5 million in Q2'11, Samsung would not only have launched a new bada phone since last November. Samsung announced something interesting in bada developer conference in MWC 2011: 5M total bada phones in 2010 and over 10M total bada phones within 1H, 2011. I think many market research companies' estimates are based on this announcement. But they misunderstood it. The 10M total bada phones includes 5M ones in 2010. Keyword: total, it means installed base not a sale during a specific period because Samsung was talking to bada developers, the company needed a bigger number to encourage people to join into the bada platfom development.

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

    bonjour et bienvenu a toute et a tous

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

    Snapshots of current mobile OS and units are one thing… but I would argue that Microsoft is going further in terms of making Windows 8 a platform than what Apple is doing with iOS and OS X Lion.

    Microsoft is making a big gamble, but if they get it right, they will provide a much more level playing field than we're seeing now. Windows 7 has 400 million licenses. If they combine that volume with a single OS (which it seems like they are planning with Windows 8), then Microsoft's ecosystem will include desktops, notebooks, smartphones and tablets.

    • asymco

      Microsoft's plan is an attempt to unify all form factors with one OS. But what if users hire the products for different jobs?

      Microsoft's grand unification theory depends on flexible users and inflexible software.

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

        We'll see. But I can say after using all three mobile OSes pretty extensively, I like WP7 best. In my experience, Live Tiles offer the best notification solution system.

        The other big gamble is how seamless Microsoft balances touch with keyboard and mouse input… that's going to be tough.

        But if they get it right, I'll use it across multiple form factors and won't think twice about it.

      • Steve Setzer

        I would suggest that a key success factor is not the technology, but the teams behind it. By what we can read externally, Microsoft's WP7 development team is a very different group from the Windows 7 team, and I believe that if the next generation is all built on the Windows 8 platform then the Windows (non-Phone) team will dominate the discussion. If that is right, it seems very unlikely that Microsoft's Windows 8 project will reach the potential you're envisioning.

        In the end, we don't buy software; we buy teams of people—developers, support techs, writers etc. When you buy Windows 8, you won't be buying the team that brought you WP7. Which is a shame, because WP7 is brilliant.

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

        You bring some good points Steve. No question the OS and phone teams will have to work together in ways far beyond what's happened in the past. Definitely agree it's a tough problem to address. We shall see.

        And BTW, I share your sentiments on WP7…. brilliant.

    • davel

      We shall see about Windows 8. I have yet to see Microsoft have the vision and execution of Apple. I think Microsoft's mobile software is looking better from the vendor's perspective because you don't have the IP issues that seem to dog any Google platform offering.

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

    Lionel, old buddy. I have to disagree with you here. I know you are privy to Windows 8. But from where I sit, it's a tired old MS ploy. They made big noise on Windows7. Got an analyst to predict it will outsell iOS; the market then rejected it and now they are shouting "wait! wait@! the next one is going to be better. Remember Windows Vista? Here's my long view on Microsoft: http://j.mp/pt11Gz

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

      But Shel, Windows 7 *has* outsold iOS many times over :-)

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

      Shel: How dare you :)

      At least from what Microsoft has shared so far, Windows 8 will be different. What they've shown right now at least goes way beyond any kind of unified OS that Apple is currently doing. Here's my thoughts on Windows 8 based on what we know at this point: http://dell.to/jMeH2Q

      But since you've brought it up, I'm amazed at how well Microsoft handled the Vista to Windows 7 transition. Right or wrong they had some big perception problems to overcome. They did it, and IMO opinion delivered a Windows 7 product that brought a lot to the table. They've got an even bigger challenge creating a Windows 8 product that works across devices and that seamlessly integrates touch with keyboard and mouse.

      That said, I'm hopeful they succeed because like I said at the start of this conversation, between iOS, Android and Windows Phone 7, I choose WP7. Why? Live Tiles rock.

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  • Morten

    I highly doubt the 1% for WinMobile/WinPhone, when all the other major (and more thrustworty companies) estimates a 7-11% market share.

    • asymco

      Please cite these other estimates. The figure I use came from Canalys. I have not seen Q2 data on Windows Mobile/Phone shipment share from other sources.

    • EWPellegrino

      I think you're mistaking one set of numbers for another. These are Global sales numbers by platform.
      You are thinking of US platform population numbers. Completely different.

      Nielsen for example gives WiMo & WP a 9% of smartphone population figure, but only around 2% of handset sales – and that is US only.
      http://blog.nielsen.com/nielsenwire/online_mobile

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  • Get Real

    My recent choice of OS had nothing to do with the OS. For me, it's the cost of the service. Why should I pay AT&T or Verizon $130/month plus all of their ridiculous fees for two years? NOT! I bought an LG Optimus on Virgin Mobile for $40/month and no contract. Sorry, but the competition among carriers won the day. $40 is significantly less than $130. I don't care about the phone that much or the OS at all.

  • http://mymediainfo.com/ Renee

    In many ways Nokia and Android have switched places. Unless Nokia is real innovative real fast, it doesn't look like this is going to change any time soon.

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