The common thread among the Android fans is that Google is the agent of disruption of a hated operator business model. Since disruption is well understood (though not by many) it is fairly easy to evaluate this hypothesis.
The problem with disrupting network operators is that disruption can only happen when the underlying service/product they provide becomes “good enough” i.e. more than what customers can absorb. A new basis of competition emerges and we all know what happens.
Here’s the problem: since mobile broadband is by all accounts not good enough, it cannot be disrupted. Operators are very critical in building out this new mobile computing future and they are investing and will reap rewards. Bitpipe models will only emerge after 4G when there will be ubiquitous high speed networks and competition will shift away from coverage and more to price and convenience of plans.
What is happening instead of operator disruption is that mobile voice which is more than good enough is being disrupted. Businesses built around mobile voice (e.g. handset vendors who have not developed a viable business model around data) will simply evaporate and their profits will condense around entrants who have mobile computing platforms.
Google is moving on this opportunity but they are not executing in a way that ensures they control the future platform due to the their being on the wrong side of the modular/integrated dichotomy.
Android will disrupt but I expect it will take 10 to 15 years. The life cycle of a new global network generation rollout is about 10 years. We’re in the middle stage of the 3G cycle that traces its beginnings to early this decade. 4G will take another 10 years.
More than half of the 3.5 million smartphones shipping to France this year should be iPhone variant, while Apple should account for about 20 percent of the entire cellphone market’s revenue. The company’s popularity will have helped smartphones as a whole more than double their share of France from 7 percent in 2008 to 16 percent this year.
A Google spokesperson confirmed for eWEEK that there are 16,000 Android free and paid apps, not 20,000 as others previously reported. (iTunes App store is around 120k now with over 130k apps having been “seen”).
A few more data points re. Android:
- There are 5 Android instantiations of varying distribution through the first two weeks of December: 1.1, 1.5, 1.6, 2.0 and the fresh 2.0.1. It seems Google is prepared to see that number go much higher. You can see the distribution of platform versions in a pie chart here:
- If a developer chooses only the most popular platform version, he gets to target about 54% of the installed base.
- Motorola’s Droid ships with only 256 MB available for app storage. Google Android does not support installation of apps to SD cards, so developers face a very real limit. Many of the most popular iPhone apps (games) easily exceed 100 MB, so not very many quality apps would fit on Droid (and some won’t fit at all: Magellan RoadMate app ($59.99) alone weighs in at 1.36GB). That’s why Droid only offers users three measly panels for displaying apps; users probably won’t even be able to fill up two before they run out of storage space.
Droid comes with a built-in turn-by-turn app Google’s Maps Navigation likely because no other nav app would come close to fitting into the Droid’s limited 256MB app storage space.
One observer has posted that WMM (Microsoft’s answer to iTunes App Store) has 520 apps in it now. The store launched in Nov 1 with 281 apps. That means there will be about 300 apps added in the first two months. The growth rate is therefore about 150/mo.
This has to be the slowest growing app store among all the contenders, though Palm may also be similar.
By way of comparison, iTunes App Store is growing at about 10k apps/mo. with Android about 3 to 5k/mo.
How does this make sense coming from the company that is known for “developers, developers, developers” and is the largest software company in the world?
My bet is we’ll see the same thing in Korea. In both Japan and Korea the incumbents mounted campaigns against the iPhone and mustered means at their disposal (including major newspapers, TV and government agencies) to hinder Apple’s entry.
The reality however is that captive customers in those economies have always yearned for better products. There will always be a segment of the population that is informed about alternatives and will buy what works, at the expense of purchase decisions based on nationalism. It’s that group which will influence behavior over time.
This is how Toyota won against GM in the US.
This is active users in the US only.
iPhone now tops WinMo and is second only to RIM. The only line that is going down is the dumbphone category which lost 10 million users.
Those users were mostly switched to RIM and Apple. RIM gained about 4.3 million users and Apple gained about 3.5 million.
Android user base still lowest of all platforms and increased by about 0.6 million. They are likely to beat Palm however next few quarters. At this rate however it’s very hard to see an installed base that is going to challenge Apple for a long time.
Palm gained 0.44 million. Symbian gained 0.41 million. WinMo gained 0.3 million.
With a 1.4 multiplier for iPod Touch, the platform would have 12.5 million users, pretty near RIM’s base. We might see that tipping over next quarter.
In other news:
- Nokia shutters flagship Regent Street store in face of Apple retail’s domination – December 08, 2009
- Nokia sees flat market share as Apple gains – December 02, 2009
- Nokia Chief Strategist: Apple will remain a niche player in smartphones, just like in computers – November 30, 2009
- Nokia to cut another 330 R&D jobs – November 20, 2009
- To understand market share vs. profits, look no further than Nokia vs. Apple – November 11, 2009
- How Apple passed Nokia to become the world’s most profitable handset vendor – November 11, 2009
- Strategy Analytics: Apple passes Nokia to become world’s most profitable handset vendor – November 10, 2009
- Nokia sues Apple claiming iPhone infringement of Nokia GSM, UMTS and WLAN patents – October 22, 2009
- Nokia posts loss of 559 million euros on weaker smartphone sales – October 15, 2009
- Nokia’s earnings plummet 66 percent – July 17, 2009
- Jim Cramer: The problem with Dell and Nokia is that no one wants their products; Buy Apple – July 17, 2009
- Nokia’s failures vs. Apple’s vibrant iPhone platform puts market share at risk – June 24, 2009
- Nokia Ovi Store launch a complete disaster – May 26, 2009
- Nokia ships 19% fewer phones in Q1, bleeds more share – April 16, 2009
- Nokia axes 1700 jobs worldwide – March 17, 2009
- Nokia halts sale of iPhone killer; 5800 handset plagued with major problems – March 02, 2009
- Nokia hops on bandwagon, unveils knockoffs of Apple’s iTunes Store, App Store – February 16, 2009
- Nokia profit collapses 69% in fourth quarter 2008 – January 22, 2009
- Nokia’s profits plummet 30 percent – October 16, 2008
- Nokia’s fatally flawed ‘Comes With Music’ service no Apple ‘iTunes Store killer’ – October 03, 2008
- Nokia fumbles iPhone lookalike-not-workalike launch in U.S. and Europe – October 02, 2008
- Nokia sputters that iPhone ‘not worthy of discussion’ – August 13, 2008
- Apple takes top spot from Nokia on AMR Research’s 2008 Supply Chain Top 25 list – May 30, 2008
- Nokia shares slammed in wake of miss; Nokia CEO calls Apple iPhone ‘niche product’ – April 17, 2008
- The knockoff parade continues: Nokia exec shows Apple iPhone lookalike ‘Tube’; dismisses Apple – April 08, 2008
- Nokia previews blatant Apple iPhone knock-off (with video) – August 29, 2007
- Nokia CEO challenges Apple over iPhone – February 13, 2007
As I mentioned, I expect the green line to extend above 100 million in 3 to 4 quarters from where it currently ends.
The number of games per platform. All approximate.
- Nintendo DS 600
- Sony PS3 600
- Microsoft Xbox 700
- Sony PSP 700
- Nintendo Wii 1000
- Google Android 3,000
- iPhone/iPod touch 22,000
If IDC prediction of 300,000 iPhone Apps by end of next year holds and if the ratio is preserved at about 20% games, then there could be 60,000 games on the Apple platform by next year. It’s doubtful that the other platforms will grow by more than 10% in the same time frame. Are there any implications if one game platform has more titles than another? It’s interesting that all the other platforms are in the same order of magnitude.