Who would have thought five years ago that Apple & Google would be dominating the smartphone market in 2011?
Also serves as a reminder that no matter how high Apple and Google are riding right now, it is still a volatile business and it's not hard to imagine two or three other companies emerging in the next five years to seriously challenge them (like Facebook, for instance).
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I love that Google brands one phone a year as being the hot new shit, but having Samsung, HTC, LG and the like make 3 to 5 phones each quarter simply makes the space crowded. I understand people want a selection with different features, but most of them do the same thing and if it's tough for techies like us to tell the difference it's gotta be confusing for Joe Public.
This brings me to my next point: Apple is always going to dominate the cash flow as long as Steve Jobs doesn't piss people off too much and Google and smartphone manufacturers spread themselves so thin. Only having 1 device to support allow Apple to focus their marketing and engineering to either have the best features or market like they have the best features. Android supporting companies need to narrow their focus to make 3-5 phones a year instead of 15 phones a year.
Maybe having rotating franchises like the Incredible and Droid X will work to keep costs down and make things easier for consumers. "Oh what's this? It's like last year's Incredible? My sister had that one and she liked it. OK, I'll get the new one!"
Instead of "Droid Bionic? Droid Pro? Droid Charge? Motorola Photon?Evo 3D? Evo Shift? Inspire? Infuse? Captivate? Atrix? WTF? What's the free one?"
Windows phone needs to market heavier and work with Nokia to really make something special. There's plenty of room for them to enter the market and make money, but they have to be in stores and they have to market heavy like Google and Apple.
Public appearance of Windows is that if you can't afford Apple you get Windows. Or if you don't like the Apple culture/price you go with Windows because there's nothing else out there. It's usually not something you choose. Making Windows Phone integrate with the desktop OS and Xbox 360 is great. The former is only going to sell enterprise phones and with the costs of cellphones ever rising, those business people are likely to either stick with their shitberry or just integrate their personal phone as a business phone. The latter is may sell phones, but it's going to be slow and many people are already used to a smartphone OS and don't want to change because you can't transfer apps or other purchases.
Funny huh? As a self proclaimed nerd thinking that the iPhone was key to his favourite oS, android!
Within the next 5 years, smartphone and Tablet penetration will approach all-commodity volume, worldwide. Both Apple and Google will look to blue sky territory to sustain their current growth rates.
Looking at Apple, it's hard to imagine that they will uncork another iPhone-type product within 5 years. Not impossible, but on the heels of the iPhone and the iPad, it's hard to ID another category killer. Possibly a TV or gaming product? In either of these living room categories they will face a competitive environment that is vastly different than mobile segment was when the iPhone was introduced. It will be difficult to sustain high margins in hardware businesses as product lines inevitably expand to include lower price points in established categories. Sure Apple beat Palm and Sony at their own game with the iPhone and iPod, but it won't be easy to do it yet again with the same categorical dominance and growth curve and margins that the iPhone, iPad, and iPod have enjoyed.
Looking at Google, it seems like they are approaching the category from the other side of the market - Moto's hw margins actually have the potential to trend up. And Moto's STB business combined with Google's data and analytics could provide the basis for a compelling living room proposition that has the potential to rival Apple TV (particularly if Google offers a more effective business model to the content community than the iTunes steamroller). In addition to phone, tablet, and tv, Google also has nearly unlimited opportunity and ability to address mega-verticals beyond the consumer-oriented categories that Apple has generally specialized in.
Google may have mothballed their Energy and Health initiatives to fully execute on mobile in the near-term - however they have expertise and data in these areas that could position the company to (re)enter entirely new verticals with a disruptive value proposition.
And as others have noted, the new Google - Motorola combo enables Google to create value in new segments backed by the same (ok, similar) end-to-end control that Apple is famous for.
It's hard to find significant weaknesses in Apple's business today - however Google's business seems to have greater elasticity and upside, which is only fortified by the Moto acquisition. Over the next 5 year cycle I expect to see Apple and Google skirmish on multiple fronts - well beyond the smartphone segment.
It's hard to short either company, but with Apple facing growth and margin pressure (as well as unnecessary design challenges entirely of their own making), the advantage should go to Google on the long haul. Time will tell if Google can execute and harvest.
Google has some real talent, but its obsession with giving stuff away is causing it to fight with one hand tied behind its back.
I was a Blackberry user and thought my Blackberrys were great. When I give Android a try I was blown away by the difference. The rest of the world is figuring that out as well and things are changing. A few years ago I was even buying and selling RIM stock and making money. Today I wouldn’t touch that turd. I see RIM making really bad choices these days and I don’t see them coming back. They’ve had some opportunities lately and they’ve failed to capitalize on them. RIM might be going the way of Palm and if a new player buys them they better cut out the cancer before it infects them as well.
I’m not sure what the one way is that everyone seems to know, but there’s apparently more than one way to skin a cat. Apple and Google have certainly proven that cliché to be true in the world of smart phones. More recently, and to a lesser degree, Microsoft has as well. It’s pretty obvious that Microsoft has taken a little different approach and positioned Windows Phone well for a potential shift in the mobile market. They have the best chance of making a big change in the landscape in the near term.
Tablets are the key. There is a lot of room in the tablet market and progress there opens up opportunities in the phone market. Apple has the current strong hand. They’ve executed well and early, where mistakes are more easily forgiven. Google (I love Android), on the other hand, hasn’t executed as well but I see them as an example of what the market will bear. People seem to be want to buy tablets and a decent percentage of them, for one reason or another, don’t want to buy an iPad. Tablets are still the next big thing for a lot of people, at least in the near term. Blackberry and webOS would be in much better shape right now if their tables weren’t giant failures.
The tablet is where Microsoft has to kick ass. The Nokia deal is huge, to be sure, and I’m not convinced that Windows Phone will do well without Nokia doing well, but the Windows 8 tablet is crucial as well. Microsoft seems to know this. They’ve recognized the viability of the tablet and, maybe after an executive temper tantrum or two, they seem to have figured out that their big push into that market had to wait. It feels like they’ve figured out that Windows 7 won’t work and they’re wisely waiting for something better.
The only thing for certain is change. More clichés, but this one, at the very least, is apt.
There are nascent projects such as Mozilla's recently announced Boot to Gecko and MeeGoo which is now under the care of the Linux Foundation that will offer manufacturers license-free, open source alternatives (to Android) to experiment with and that could glimpse of things to come: as mobile hardware continues to get more powerful and as mobile broadband connections become faster it's conceivable that a mobile OS built entirely around web apps could emerge and succeed as a viable option as this is a track distinctly different from the one Android and iOS are on.
Microsoft and Nokia will make a solid go at trying to gain market share next year and we'll have to wait and see how that plays out. RIM also still has a chance to right their ship but the window of opportunity is shrinking.
Just as likely we'll all be blindsided by something that comes totally out of left field as we have been just week but both Google + Motorola and HP - WebOS...
My bet is on Apple winning. Google faces problems from patents on one side and the GPL on the other and then there is fragmentation.
Google has to live on the advertising crumbs from the giant Android banquet. But Google would earn almost as much if other non-Android platforms used the Google services.
This has turned into a two-horse race. But only one of those horses has a rider.
$12Bn is an awful lot to spend to reduce Samsung's legal bills.
My guess is the Moto acquisition is perhaps a shift away from the advertising model and a lurch in an Apple-like direction. As manufacturer and software deveioper.
They have just decided to drop their entire consumer PC business. Because market-share without significant profits just isn't worth the hassle.
Along with a much greater selection of quality apps, very strong dev support, huge selection of games and the fact that I could jailbreak my iPad2 within 5 minutes of ownership via a simple website pdf exploit (which has now opened up a whole new world of themes, tweaks and unofficial jailbreak apps!) the iPad 2 was an easy choice for me.
And this is coming from someone who actually loves Honeycomb tablets, open source software and Android in general. However the laggy performance of most Tegra 2 devices, and the pathetic selection of native 1280x800 apps in the Android market still screamed BETA to me. I use Google for practically everything else so when the time is right I may still jump ship, but there would have to be a hell of a technical advantage for me to simply disregard all my software for a new ecosystem (having to buy many of the same apps I owned on iOS all over again!)
Maybe in the future, manufacturers and developers will decide to distribute truly universal apps (for software that exists on all platforms), or at least a discount or something, giving you a cheaper version of an app you've previously bought for another platform (wishful thinking I know....)
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