Posts Tagged ‘android’

Android Catching iPhone

February 5th, 2010 2 comments

Actual customer usage is the best leading indicator of success in the marketplace.  Usage begets usage, and is the source of the most important ingredient for success: happy customers.  When it comes to Mobile OS’s, the best publicly available proxy for actual customer usage of the kinds of things mobile startups care about (ie, use of apps, browsers) is the AdMob monthly ad request data.  This is end-users voting with their time, and demonstrating that they are seeing true utility from these platforms.

% of World Wide Ad Requests, for Android & iPhone only.

There is a great two-horse race between Android and iPhone, with iPhone clearly advantaged by their head start, and Android with better momentum and a broader set of devices coming to market.  Steve Jobs may be able to continue to wow the market with great selling devices, but the long term trends favor Android.  As long as Google continues to support the effort, Android is the clear favorite in this race.  Either way, it will be a great race to watch, and we in the mobile space are hugely fortunate to be the beneficiaries of the opening of the mobile space driven by Apple and Google.

I hear my friends in Europe reminding me that Nokia/Symbian is still important, and that we Americans have a very parochial view of the mobile world.  Perhaps.  Or, maybe we’re just excited to be the center of the action for the first time in the history of the mobile industry.  But, the data shows that activity on Symbian has been essentially flat over the time when Android and iPhone have seen tremendous growth.

World Wide Ad Requests. Android & iPhone Growing Robustly.  Symbian Essentially Flat.

There are clearly initiatives in the works at Nokia/Symbian attempting to change this trajectory–including a potential wholesale shift to Maemo.  Nokia is to be congratulated for recognizing the problem and for demonstrating a willingness to consider bold steps to address it.  And, if one were to bet on any big company to successfully make a transition as big as this, perhaps it is the company that transitioned from being a rubber boot manufacturer to a mobile phone manufacturer a couple of decades ago.   But, Maemo is too little too late for Nokia.  By the time a meaningful number (tens of millions) of Maemo devices are in the market, Android and iPhone will have completely dominated the Mobile OS space.  The basis of competition in that space is about the apps and services that can be provided to the end-user, and it will be just about impossible for a new platform to reach parity given the huge head start Android and iPhone have.

The sooner Nokia commits to Android the better.  It would allow Nokia to focus on their strengths of handset physical design and manufacturing prowess. Besides, the OS game in Mobile is much different than the OS game in the PC world.  “Owning” the Mobile OS isn’t the monopoly opportunity it was in the PC business.  When Google open-sourced Android, they gave away the ability to collect economic rent from the OS platform.  This change is so fundamental that all the old business thinking around OS’s is obsolete.

Apps as Basis of Competition in Mobile

November 20th, 2009 No comments

In the old days–you know, more than two years ago–the basis of competition in the mobile space was primarily the price and industrial design of the phone, and secondarily the quality of the network it was running on.  Obviously, these bases of competition strongly advantaged handset vendors with great design and manufacturing capabilities like Nokia (and sometime Motorola), and operators with great networks like Verizon and Vodafone.

But this all changed over the last couple of years.  Thanks to the innovation around the iPhone (and secondarily Android and RIM), I would argue that the basis of competition has become the mobile applications and services.  This change in basis of competition is incredibly important.

  • It opens up the opportunity for young companies to interact directly with the end customers (as I outline in “five open paths“)
  • It creates a huge problem for Nokia, whose tremendous strength in industrial design and manufacturing prowess (lower cost of goods sold) have become secondary selection criteria.  It is stunning that iPhone, in just two years, is now producing more operating profit than all of Nokia phones (Reuters article).
  • It creates a huge problem for Verizon, whose tremendous strength in running a locked down, high reliability, network has become a secondary selection criterion.  Not only is Verizon losing subscribers to AT&T at an alarming rate; they are losing their BEST customers to AT&T at an alarming rate.  Because of the surprisingly small costs of actually hauling voice and data traffic over mobile networks, the lifetime profitability of a $100/mo subscriber is much more than 2X that of a $50/mo subscriber.

Look at the reactions from Nokia and Verizon.

Nokia has put an admirable level of focus on Ovi, but the natural fragmentation brought on by their relatively autonomous handset project groups is hard to address, and the Ovi message boards are mostly populated with complaints about getting such-and-such application to work with such-and-such phone.  I applaud Nokia’s apparent attempt to transition from Symbian to Maemo, but it begs the question: why not go to Android instead?  By the time Nokia has any critical mass in the marketplace with Maemo, they will be a handful years behind Android, and will be hopelessly behind when it comes to the apps and services subscribers want.  Android would allow them to play to their strengths in manufacturing and industrial design, and get the apps that subscribers are demanding.

Verizon has finally reacted, with a couple of completely open handsets (the Droids), with more on the way.  They will likely continue to get rave reviews on their network quality, until such time as explosive usage begins to cause cell capacity problems.  I use a Moto Droid as my every day phone, and it has some wonderful capabilities, and some significant rough edges in the software.  If Verizon can keep their commitment to openness, their network quality could still remain an important secondary selection criterion.