I think one of the things that even brilliant guys like Fred underestimate is that Apple offers an end-to-end ecosystem that people aspire to join while Android is the default choice for smart phone carriers that don't offer the iPhone. Android will likely have greater market share, but will it be the portion of the market you want to build for?
My view might be clouded because I work in an industry where 45% of revenue comes from 5% of customers. Will the bulk of dollars available from smartphone/tablet customers come from the market share leader or the profit share leader? My guess is the latter.
Even if Android wins in smartphones, I'd bet iOS will continue to own music, tablets, and TV and TV could be bigger than the rest combined.
Apple's products are expensive. Since Android is open, you can have android on a cheap $10 toaster or a high-end $50,000 car. Apple's closed ecosystem provides a nice environment for those people who are in it, but the vast majority of mankind cannot afford Apple products. Many, many more people can afford Android products purely because the variation in price is so huge.
So, while Apple may be happy owning the majority (all?) of the high-end device market, you will start to see Android running on nearly everything out there. I wouldn't make any bets that iOS will be "better" for developers as the future rolls in.
re: "Since Android is open, you can have android on a cheap $10 toaster or a high-end $50,000 car." This feels like Java (and Linux to some extent too) all over again (given Android's underpinnings, not surprising).
Linux is free, and I gave up count how many years were supposed to be the 'year of the desktop' for Linux. As widespread as it may be - embedded in loads of devices - the 'pay for' OS - Windows and OSX - have continued to dominate. May Android end up being the Linux of mobile devices? It's nearly everywhere, but typically only the first choice of a narrow geeky few, whereas anyone else that uses it does so not out of choice for that aspect of the product, but for some other reason. (How many Tivo users do you know who really love Linux and bought their Tivo because it's on Linux?)
I'm wondering if Android will end up being this generation's J2ME, with similar fragmentation and hardware vendor control.
Android is a Linux. There are more than 300,000 Linux phones being sold every single day. I think it's fair to say that 2010 was indeed the Year of Linux on Your Pocket Computer / Your Phone.
A very limited, US-centric view. Yes, in the US (and Canada) people buy subsidized phones and even here that hasn't stopped Android.
In much of the rest of the world, people would be expected to pay 2-3 monthly salaries for an unsubsidized iPhone. Or they could pay 1/2 or 1/3rd for a decent Android phone and do the same things. Now do you understand the point of the article?
Which countries are you referring to, exactly? In Australia for instance, an iPhone is about $630 AU, a Droid 2, $650. I think it makes sense to compare phones of similar capabilities.
India, China, Eastern Europe, Latin America... take your pick.
When I go shopping for a phone this year, I'll be comparing the iPhone5 with the latest dual-core 4+" 1280x760 Android monstrosity, then drop 600+ on either. When the newly minted middle class in those countries goes shopping for a phone this year, they'll look at a reasonable 3.5" 480x320 Android for $150-200, compare it with some aging Nokia dinosaur and make their pick. The iPhone is not going to be figuring into their thoughts very much.
Anyway, you asked me 'now do you understand the point of the article'.
I think I already did, thanks, and as far as I can tell, Android being at a particularly advantage overseas vs. iOS is neither the point of FW's post or the article he linked to. In fact, all he said is '. And many of these devices will be running Android, not iOS'. As far as I can tell, HN has seemed to turn this into "Android will be devastating iOS because people in Kiribati can't afford an iPhone!!". Okay, but that isn't what either article was asserting.
Well, if you follow the link in Fred Wilson's blog post, the title is "2011 will be the year Android explodes". FW is merely agreeing with that original point.
I think Fred's point was that it's an entirely new market opening up. As you say, a middle-class value-conscious market. It will be a huge market, so businesses need to get out in front of it. But replicatorblog's point (as I understand it) is that iOS will still own the high-end of that market, and that segment is worth more $$$ than its number's suggest. If you're in control of the high-end, you can exert undue influence on consumer mind-share and developers. That matters for something.
Anyway, IMO this is not an iOS-vs-Android issue. New markets are going to open up, Android will be there. iOS will still be a cash-cow. Win-win, everybody celebrate (except Microsoft)
The answer to that is the GP's: "In much of the rest of the world". Australia is considered to be a rich, "Western" nation. Much of the rest of the world is poor, not rich. They do not have Apple stores or, in many cases, fast wired Internet connections. You've got to break out of your mind's box where thinking that Western countries dominate; in terms of population, they don't. At all.
> I think it makes sense to compare phones of similar capabilities.
What about in places where the iPhone isn't for sale, directly? What will you do then? If you would like an example, take Tanzania. They have wireless networks, but (to my knowledge) no iPhone.
The vast majority of the world cannot afford iPhones, but they are able to connect to wireless networks.
I understood the point of the article, but I have trouble believing that Android manufacturers will be able to build something people will want to buy for $100 that Apple won't be willing to match.
I have a phone that's at the same price point as the iPhone (Samsung Galaxy S) but there are lots of phones at the other end of the price spectrum such as the HTC Magic, Dream or Tattoo or maybe the Motorola Quench or Backflip. All phones that are half the price or less than the iPhone/Galaxy S.
That's not really my point, though. You're looking at 2010 prices. The discussion is about the future of the market. Since Apple controls the entire ecosystem of their products, including the price, if you want an iPhone you have to pay Apple's price. If you want an Android phone, you can hunt around for a really cheap one.
I get that the prices are very close right now. But since the can only be 1 or 2 models of iPhone out at any time and there can be thousands of Android phones, it is inevitable that Apple's iPhone will be more expensive than the cheaper Android models. Of course, the iPhone will probably be cheaper than high-end Android phones. It goes both ways. But since there is choice, Android will offer the cheaper option.
True, if you're comparing 'an Android phone' to an iPhone, the Android phones are cheaper. For phones of similar capabilities, they're more expensive. As you have to pay $70 a month minimum for two years to get one of these phones, though, I don't see that $80 for the phone is very different than $180.
> As you have to pay $70 a month minimum for two years to get one of these phones, though, I don't see that $80 for the phone is very different than $180.
That only happens in the USA and Canada. Maybe that happens a bit in other countries, but really, not much. No more than 10% of the world buys phones like that. The USA is not a model for the rest of the world in the mobile space; they're quite backwards actually.
Android phones sell for $200 without a contract in most countries.
Why does every conversations about smartphones end up with an argument between Apple and Android? A) There are more than two options (you can't predict the future) B) That's completely unrelated to the article. Yes he mentioned an android phone as an example, but this kind of growth will be universal. People have learned that fighting over vi and emacs is pointless, please learn the same lesson here, your opinion doesn't please everybody.
Not many people have caught onto the fact, but Android has already exploded massively. It's a moving target, but during the same time that RIM, Apple and MS shipped their flagship products (iPhone4, BB Torch, WP7), Android outsold them all combined. With Nokia mired in Symbian-MeeGo nowhereland, there doesn't seem to be anything on the horizon to slow down that momentum.
Despite all the hand wringing over "fragmentation", the fact is that Android scales and adapts wonderfully and this will be the basis for its dominance. Consider the new wave of cheap Android smartphones coming - with what other OS could a middle-aged Indian man upgrading from an old crummy nokia be just as satisfied as me - a geeky dev who loves the latest and greatest and has gone through a dozen smartphones?
I agree with FW that 2011 will see a huge explosion in smartphones. 2010 was already a huge boom. But the interesting potential lies in the billions of people in the developing world, can they be enticed to join the smartphone world with cheap smartphones priced under $100? I think they can. Virgin Mobile has an Android device for under $200, no contract and only $25/month for unlimited data and 300 minutes. That's enticing, and it's probably just going to get cheaper. Android has the price point where it can lure people in to a smartphone from a regular phone, and it has the platform where it can keep most of the people. The big question to me is what is Apple's response going to be? Is Apple just going to sit there and let Android take the low-end market, or is Apple going to proactively respond and release a lower end phone, ie., iPhone Nano, that can compete with the low-end Android phones? The same thing in tablets, will Apple release a 7" tablet to compete with the low-end Android tablets?
To be honest, I am a little baffled that they haven't already. Around this time last year I wrote about why Apple would use a 960x640 screen in it's 4th iPhone* and I naturally expected a product line split. It would have made perfect sense to have a top-end 4" 960x640 phone and a low-end phone using the old screen, less RAM and other money-saving components.
Perhaps they wanted to hold off another year protecting their high margins, knowing that even in the developed world, a lot of people would have brought the low-end iPhone instead of the high-end one? In any case, it would be interesting to see if this summer they'll introduce a lower-end iPhone or if they'll continue to be an exclusively top-end provider.
I naturally expected a product line split. It would have made perfect sense to have a top-end 4" 960x640 phone and a low-end phone using the old screen, less RAM and other money-saving components.
Since the 2009 introduction of the iPhone 3GS, when the iPhone 3G went on sale for $99, they've done exactly that. A year later, the 3GS followed it at that price.
The downside is that when the 3GS was finally discontinued, it was two years old and had 1/4 the RAM of the then-current iPhone 4, leading to maintenance trouble for the OS and app developers.
I read your blog post from Dec 2009 and your predictions were pretty dead on. Please write another post for your predictions in 2011 for the iPhone and iPad.
Even on a geeky site like swombat.com, mobile traffic is still only 12% of the total. Android has a long way to go. I doubt it will achieve all that in 2011.
Just because everyone can access the web on their mobile doesn't mean it will become their main channel to it. I have mobile devices too, but 99% of my web browsing is still on my laptop, and until/unless I need to be super-mobile all the time, that will remain the case.
> I have mobile devices too, but 99% of my web browsing is still on my laptop
Right. That's because you can. In much of the world, there is no such thing as a high-speed wired infrastructure that lets you purchase $1000 computers, plug them in and go. Most of the world does have a wireless network though, and there are already nearly 1 billion 3G phones connected to those networks.
You and I are not good examples of the new market that will exclusively access the Internet through mobile, so it may be hard to see that it's going to happen that way. But it will.
laptops can run on wireless infrastructure just as well as smartphones can.
I'm typing this on a lenovo ThinkPad x60s. Value was $400 a year or so back when I got it. Less now, obviously. There are serviceable netbooks for similar prices new these days. I'm using the verizon brand cellular modem, which works fairly well (but is also pretty expensive, because I'm an American.)
If I was some guy in africa or china or what have you, this netbook/cellular setup would not be any more expensive than a iphone, and really the only downside vs. the iphone is that you've gotta plug the netbook in more often than the smartphone; on the upside, it's much easier to get the sort of work I do done with a real keyboard and monitor. Of course, this varies. for communication that doesn't need to be instant and traditional computer work, the netbook is unquestionably better, save for the battery life issue. If you need instant on or work while you walk capability, then the smartphone is your best choice. It's a tradeoff... I'm just saying that right now, the high end smartphones don't have a price edge over the low end netbooks.
Smartphones are getting better; fast, but they are still a long ways from being as functional as a good netbook. As of yet, a good smartphone and a good netbook are about at price parity. (if this article is right, that might be changing; I can see situations where saving a couple hundred up front would make dealing with a smartphone vs. a laptop worth it.)
But he's not talking about the masses in the industrialized world, he's talking about the masses everywhere else. Where the cell phone is already the dominant platform, they'll just get smarter phones and more internet access now.
This may or may not affect a particular business/website, but it's a trend that's worth being aware of.
You're missing the point. The point is that there is still a huge portion of the world who do not own computers, do not have an internet connection, and have never used the web before, ever.
What's the entry point for those people? Likely it's the smartphone, due to reasons of price, local infrastructure, and distribution mechanisms.
good points. yet apple has options. the iPad was priced very aggressively out of the gate, to the point of having no real competitor even now.
the iPhone pricing is muddled by the carrier subscription costs. which incidentally are the best/most profitable large business in the world right now.
the iPod touch has no competition even after years in the market.
my money for 2011 is that apple continues to be the money/profit leader. not android
I don't get it? Are you being derogatory here? If he is investing in the obvious and it's working so well either others find it not so obvious or maybe it only looks so obvious after the fact.
No, not at all intended as a slight against FW. Rather, against most everyone else. The majority of investors and columnists are surprisingly clueless, but as FW actually knows what he is doing, he is heralded as being especially savvy.
slight prediction here: apple may introduce a 3g plan for a next generation of iPod Touch, strongarm AT&T or Verizon in to offering a decent unlimited data plan, and start pushing facetime (and possibly skype) over traditional 'phone' functionality altogether. Yeah, why would a carrier cannibalize their own voice network? Perhaps they won't, but they might for the right amount of cash (isn't it always about cash?)
My view might be clouded because I work in an industry where 45% of revenue comes from 5% of customers. Will the bulk of dollars available from smartphone/tablet customers come from the market share leader or the profit share leader? My guess is the latter.
Even if Android wins in smartphones, I'd bet iOS will continue to own music, tablets, and TV and TV could be bigger than the rest combined.