Wednesday, October 13, 2010

Does Android Compete with iPhone?

The race is on, Android sales are catching up with iPhone, and we all know a race implies a winner. The question that's not as widely considered is how much these products actually compete?  First, Android is an operating system used by multiple vendors, so we need to consider Apple's iOS eco-system and what these respective products bring to the market.

If you are a cell phone maker looking for a low cost licensable OS, Android is a clear winner.  If you're a cell phone carrier looking to offer a family of attractive "smart phones" you can customize to add "carrier value", again Android is a winner.  But what do these respective products offer to the people who actually buy and use them?


- A cell phone available on multiple carriers.

- A flexible Internet communication device that offers mobile Web, Email, Maps, navigation, social networking, and the ability to run 3rd party apps.

- Lower cost in some cases but not others.

Android is a remarkable product, and if it weren't for the iPhone, it would be far ahead of anything else in its field, but the iPhone and iOS mobile platform arrived first.


- A cell phone currently available through some carriers.

- A flexible Internet communication device that offers mobile Web, Email, Maps, navigation, social networking, and the ability to run 3rd party apps.

- A best in class App store available in 60 countries.

- A best in class portable music platform (iPod).

- A best in class mobile gaming platform (iPod Touch).

- A best in class mobile tablet (iPad) that serves as a book reader, electronic publishing channel, and is well suited to other business applications.

- Best in class battery life.

- Best in class retail product support.

- A consistent user experience that is always responsive and not bogged down by crapware.

- A restrained design that does not overwhelm new users with all the things it can do before they experience finding and downloading software from the App Store.

- A vast eco-system of product accessories.

- A consistent upgrade path.

- A broadly supported mobile computing platform that offers a consistent target for mobile application developers.

The next question one might reasonably ask is which of these differences are sustainable?  The surprising answer is most of them.  Some are based on long term investments which cannot be easily replicated (iTunes + iTMS, over 300 Apple retail stores, Mac desktop, Xcode developer tool chain). Another big factor is profitability to sustain ongoing development and innovation.  Apple's vertically integrated business model has proven to be highly profitable at almost every level.  In contrast, Android development is largely funded by Google's Search business. Whether this business model can expand to support an iOS like eco-system is an interesting question.

Today, both Android and iPhone/iOS are clearly successful.  It is not my intention to predict a winner, but to point out how these products address very different market needs with relatively modest overlap. Both products have enormous growth potential. Android offers a powerful Internet enabled smartphone that is not locked down by a single vendor. iPhone/iOS offers a powerful, easy to use mobile computing platform that was not previously available.

As a smartphone OS, Android is a huge success. As a mobile platform OS, iOS has more developers and more software which is attracting ever increasing investment. When it comes to mobile touch screen tablets, there is only one well stocked App store with software designed specifically for the tablet format. If Android fails to attract significant tablet software over the next year, while Apple remains on track to sell over 40 million iPads, the difference will become more apparent.