Android Or iPhone? Wrong Question
The gist of the article is that Google's Android strategy is obviously the best and they're going to dominate the Smartphone market and make Microsoft-y pools of money that Sergei Brin, Larry Page, and Eric Schmidt can all dive into Scrooge McDuck style.
It's a good article, but I think it makes a mostly obvious point. I don't know if I've ever heard it argued (intelligently) that Apple is trying to sell the most phones -- or even that they will -- they're just trying to sell the best (in their opinion) phones. To trot out a very tired car analogy (but still a good one), BMW or Mercedes-Benz aren't trying to sell the most cars -- they leave that to Toyota or GM. They're trying to sell the best cars in the portion of the market in which they compete. No one is going to write an article declaring that -- gasp -- BMW doesn't have a strategy to sell the most sedans and play it off like it's news or surprising. Yet, here we are, with an article declaring it as surprising that Apple's strategy isn't going to sell the most smartphones.
For some reason, people can wrap their heads around this strategy in nearly every product category, but can't when it comes to Apple. To understand how ludicrous it can be, let's stay with the car analogy for a second. Let's say a financial analyst who follows the auto industry declares that, "Mercedes-Benz needs to release an under $10,000 sub-compact car or else they're going to get killed by Kia and Chevy -- who both make sub-compact cars for under $10,000."
Can you even comprehend the concept of a 98 horsepower Mercedes-Benz sub-compact car to compete with the Chevy Aveo? Of course not! It's insane to even consider. It would destroy the value of the Mercedes-Benz brand. Let's be honest here -- some folks buy a Benz for the sole purpose of being able to say that they drive one -- for the prestige. How likely do you think they will be to buy another Benz in the future if someone can get one for less than $10k? Not very. BMW and Lexus would be ecstatic if that were to ever happen.
Yet, analysts were coming out of the wazoo saying that Apple needed to release a netbook. A piece of plastic-y shit with a cramped keyboard, junk screen, and slow processor is going to convince people that Apple is the way to go? Uh, no. Apple refused to release a netbook, and analysts declared that they were going to get killed in the market by netbooks.
Instead, Apple has had their BEST-EVER financials in EVERY quarter since then, steadily increasing their market share. Those analysts sure had it right!
Yet, here are we again with someone declaring that Apple's not going to dominate the smartphone market, as though it's news. Well, color me surprised, because I never thought -- nor hoped -- that Apple would be the number one smartphone maker.
The only product category I can think of where Apple is the clear-cut market leader is the MP3 player market. That's less a function of Apple running a different strategy to become the market leader, and more because the competition was so absolutely inept when it came to making an easy-to-use, attractive, and functional product that Apple was ceded that market almost by default. Apple didn't do anything different with the iPod versus any other market they competed in, the market just reacted differently. The iPod has never been the cheapest, but the experience was far superior. When the market was in a growth state, the iPod / iTunes / iTunes Store ecosystem was light years beyond anything else available. Competition has caught up now, but it's too late -- the iPod and iTunes are well-known brands, everyone knows how to use iTunes, plus many folks have bought songs from the iTunes Store and are locked in.
The competition is MUCH stronger in the smartphone market, with two strong competitors in Google and Palm -- with Palm taking an Apple-like approach (integration), and Google taking a Microsoft-like approach (leave the hardware to others). Apple will never dominate the smartphone market like they do the MP3 player market, and I think they're very aware of that fact. The competition is too strong, and they have a limited addressable audience with the AT&T exclusive deal (which I expect will stay in place well into the future). Whether or not Apple sells the most smartphones seems to be somewhat irrelevant -- it's not their strategy to begin with. Their financials sure seem to be doing okay in spite of this fact.
The only product category I can think of where Apple is the clear-cut market leader is the MP3 player market. That's less a function of Apple running a different strategy to become the market leader, and more because the competition was so absolutely inept when it came to making an easy-to-use, attractive, and functional product that Apple was ceded that market almost by default. Apple didn't do anything different with the iPod versus any other market they competed in, the market just reacted differently. The iPod has never been the cheapest, but the experience was far superior. When the market was in a growth state, the iPod / iTunes / iTunes Store ecosystem was light years beyond anything else available. Competition has caught up now, but it's too late -- the iPod and iTunes are well-known brands, everyone knows how to use iTunes, plus many folks have bought songs from the iTunes Store and are locked in.
The competition is MUCH stronger in the smartphone market, with two strong competitors in Google and Palm -- with Palm taking an Apple-like approach (integration), and Google taking a Microsoft-like approach (leave the hardware to others). Apple will never dominate the smartphone market like they do the MP3 player market, and I think they're very aware of that fact. The competition is too strong, and they have a limited addressable audience with the AT&T exclusive deal (which I expect will stay in place well into the future). Whether or not Apple sells the most smartphones seems to be somewhat irrelevant -- it's not their strategy to begin with. Their financials sure seem to be doing okay in spite of this fact.
Why the obsession with best-selling, anyway?
If best-selling was equivalent to best...
... Microsoft Windows is the best OS
... the Toyota Camry is the best car
... Wal-Mart is the best place to shop
... Avatar is the best movie ever made (and Titanic is the second best)
... Cable TV is better than Satellite TV
... the Ford F-150 has been the best truck every year for the past 30+ years
... Applebee's is the best restaurant ever
... McDonald's hamburgers are the best hamburgers ever
and so on and so on.
Look, if Android wants to be the best-selling smartphone platform, go right ahead.
I'll keep using my iPhone, even if it's not the best-selling and most popular.
I'll keep using my Mac, even if it's not the best-selling and most popular.
I'll keep watching my DirecTV, even if more people have Mediacom cable around here.
I'll keep watching IndyCar racing, even if more people watch NASCAR.
I'll keep going to local restuarants, even if Applebee's has a full parking lot every night.
I'll keep cheering for the Cyclones, even if more people in this state cheer for the Hawkeyes.
Growing up, The Bruce said something to me that has stuck with me:
"What's popular isn't always right, and what's right isn't always popular."
Ain't that the truth.
