The smartphone wars: Android thunders on

My prediction months ago that Android would pass Apple iOS in total share in the fourth quarter of 2010 is looking more prescient all the time. this ComputerWorld reports IDC’s conservative prediction that global (not U.S. share) will reach 16% for Android, 15% for iOS at the end of 2010.

More interesting is the report from ChangeWave that corporate IT buyers now favor Android over iOS in new purchases. The installed base of corporate iOS devices is about double that of their Android counterparts, but Android’s recent growth in that space is a factor of twenty larger than iOS’s. In fact Android is perceptibly eroding the position of market leader RIM’s blackberry line even among corporate IT buyers, RIM’s core market.

ComputerWorld also reports that a survey of 2300 app developers find them bullish on iOS as a short-term revenue opportunity but believing that Android’s long-term prospects to dominate the smartphone market are better, by 59% to 35%.

Part of this evaluation seems to be a revolt against Apple’s restrictions on app development and friction problems in its approval process. Perhaps just as importantly, worries about Android platform fragmentation are diminishing, with Google now reporting that over 70% of deployed Android devices are now running 2.1 or 2.2.

That 70% figure has another message. Smartphone customers appear to be exerting significant market pressure against phones that lag behind Google’s software leading edge. This decreases the carriers’ maneuvering room, making it more difficult for them to lock out features and generally more expensive to maintain customized skins.

In good news for MeeGo fans, the Gartner Group projects that the other open-source smartphone OS will, propelled by Intel and Nokia, keep ahead of Windows Phone 7 as both launch and struggle for recognition at the bottom end of the market.

On the hardware side, the Samsung Galaxy S phone’s simultaneous rollout through all four major carriers is complete. It’s being sold as AT&T’s Captivate, T-Mobile’s Vibrant, Sprint’s Epic, and Verizon’s Fascinate, initially running Android 2.1 but with 2.2 promised as an over-the-air update. This development is interesting on several levels, beginning with the fact that it marks Samsung’s emergence as a supplier not just of critical components such as AMOLED displays but of whole smartphones. Planners at Apple and HTC who have depended on Samsung as a critical part of their supply chain now have to sweat the fact that the company is likely to allocate its resources to where its profit margins are higher, likely putting a price and availability squeeze on its OEM customers.

The Galaxy S firmware uses a UI skin called TouchWiz which also runs on Windows Mobile, Symbian, and Samsung’s own proprietary dumb-phone OS. It hasn’t been getting good reviews, and on Android Samsung has taken interesting step of allowing users to disable it. In another move towards openness, Samsung has released its Android source code, and it is reported that most Galaxy S variants have unlocked bootloaders that make installing custom firmware relatively easy. The phone has been successfully rooted and CyanogenMOD support is promised for 6.1.

The picture isn’t perfectly rosy; AT&T’s Captivate disables app sideloading, and the Fascinate locks the search provider to Microsoft Bing. But I see the ability to disable TouchWiz and the unlocked bootloaders on the Galaxy S as part of the same development as the unskinned Android 2.2 on the T-Mobile G-2; the carriers are feeling pushback from reviewers and users that hate locked-down phones, and they’re gradually giving up on that strategy.

Another implication of the Galaxy S releases is that all the carriers are trying to develop depth in their Android product lines, offering both inexpensive and high-end flagship models. Compare the Epic to Sprint’s flagship EVO 4G, or the Vibrant to T-Mobile’s much-touted G-2. Samsung seems to be repeating its historic product strategy for dumb phones, which centered around being a technology follower rather than leader and trying to own the broad middle range of the market.

Actually, I think we may be seeing the beginnings of a shakeout on the hardware side. Android presented a disruptive opportunity for new players in the handset space (especially given Nokia’s failure to compete effectively in smartphones), but with the dust settling HTC seems to have been the only one to capitalize on it effectively. Samsung’s entry in force is going to make it significantly more difficult for new players to find room to compete. I think the big bets by small companies are increasingly likely to happen in the still-nascent Android tablet space rather than smartphones.

UPDATE: The developer mindshare predictions lead me to another projection. In 2011 the iPad is going to get seriously hammered by the wave of Android tablets now just beginning to ship. Developers are already planning for this, making it a self-fulfilling prophecy because the positioning of tablets means apps will be more important for them than apps have been for cellphones.

UPDATE2: It seems RIM won’t be going Android after all. They plan to go with QNX. I say stick a fork in ‘em, because a painful transition to yet another proprietary single-platform operating system is not anything a developer will willingly undergo when there’s a multiplatform open-source system grabbing market share at a furious clip.

UPDATE3: Seems they open-sourced QNX while I wasn’t looking. This improves RIM’s odds some.

106 thoughts on “The smartphone wars: Android thunders on

  1. I’ve been waiting for esr to write another Android post because I’ve been wondering what his spin on the Skyhook lawsuit will be.

    I guess I’ll keep waiting since he seems to be pretending it doesn’t exist.

  2. What’s your source for the unlocked bootloader on the Galaxy S? This would be surprisingly good news, but I’m coming up empty on confirmation.

    ESR says: One of the links in the article is to an Android community site reporting this. It’s corroborated by the fact that CyanogenMod already has ports and canned installation procedures for all five variants.

  3. You misread the first article.

    “An August survey of over 1,600 corporate IT buyers conducted by ChangeWave Research found that 16% of those polled said their firms were using Android-based smartphones. That’s a six-point jump since May, representing a 60% increase in three months.

    During the same period, the number of IT purchasers who said that their companies used Apple’s iPhone climbed one point to 31%, an increase of just over 3%.”

    That is, the totals are 31% for iPhone and 16% for Android. You quote the % market share for Android and the % *growth* for iPhone.

    ESR says: You’re right. I’ll correct the article.

  4. >I guess I’ll keep waiting since he seems to be pretending it doesn’t exist.

    Pfft. A failed company waging lawfare in hopes of a fat settlement because its products couldn’t compete is what it looks like to me. I concede it’s possible that Google might have done something genuinely evil here, but the evidence for that looks pretty thin so far.

  5. ESR,

    The launcher can be replaced on any Android phone/device in the same manner. Samsung does have the stock Android launcher pre-installed, which is nice, I guess, but most power users install either Launcher Pro or ADW, both of which have far more features and are really fast and flexible.

    In the case of the lock-downs of the Galaxy S devices, that’s all done by the carriers. It looks like on Verizon, all non-Droid branded phones are getting Binged.

    The biggest issue with the Galaxy S line is Samsung’s use of it’s proprietary RFS filesystem which causes a really laggy experience for any IO. Of course, this is now fixed with the one-click lag fix in the market, which roots the device and reformats the filesystem as EXT2. The speed difference is enourmous.

    More of these apps that automatically fix your phone will hopefully put nails in the coffin of heavy modifications to stock Android.

  6. >More of these apps that automatically fix your phone will hopefully put nails in the coffin of heavy modifications to stock Android.

    If the phone is that easily rooted from an app, probably Bing could easily be nuked as well. Maybe it really is time for somebody to write a “Decrapinator” app that dispatches on the smartphone type and undoes all the skinning and lockdown.

  7. ESR,
    I’ve been reading your blog for many years. Your reference to that survey of 2300 developers surprises me. This was a survey of 2300 developers who use Appcelerator. Would their opinion be representative of all mobile platform developers?

  8. >Would their opinion be representative of all mobile platform developers?

    In the nature of things, I can’t know for certain. However, since these are explicitly people who are developing for both major platforms, it seems likely to me that they are predictive for mobile developers who don’t have a pre-existing loyalty to one or the other.

  9. Looks like Playbook will leverage an existing developer base.

    “Adobe AIR is going to play a central role in application development on the tablet…. So if you’re building AIR applications then this is one more place you’ll be able to bring those skills.”
    http://blog.digitalbackcountry.com/2010/09/rims-playbook-and-adobe-air/

    Full disclosure: I work at Adobe, though have nothing to do with any of this stuff.

  10. >Looks like Playbook will leverage an existing developer base.

    That changes the picture a little, I agree. Still…committing Blackberry to yet another proprietary single-platform operating system when they’re bleeding marketshare smells of doom to me. When even Apple has proved unable to hold its own against Android I gotta wonder what makes RIM think they can do it.

  11. Hi Eric,

    If you look more closely on the wiki and forums, you’ll see that CyanogenMod isn’t available for the Galaxy S yet. Support for the Vibrant is being planned for 6.1, with the others to follow soon after, hopefully.

  12. >CyanogenMod isn’t available for the Galaxy S yet

    Well, that’s annoying. I got to here and because it said “How do I root & install CyanogenMod?” I assumed it was possible to, I dunno, actually root and install CyanogenMod.

    *grumble* *mutter* Bait ‘n switch…

    Note to Daniel Franke: However, the part of the instructions they do have posted do indicate that rooting these phones isn’t difficult.

  13. > It seems RIM won’t be going Android after all. They plan to go with QNX.

    QNX?? OK i’m all for microkernels (it’s one of the few things I believe Linus is probably wrong on, not that i’m suggesting he’s ever going to care about that belief) but why would you go for the 100lb gorilla microkernel (the one with 5x the IPC cost, which is what kills a microkernel on performance) instead of the leaner meaner open source ones? (L4 or Minix 3… either is good though Arm support in minix is still alpha-ish) Hell even if you want to play the proprietary support card, i’d argue that OKL4 is still a better choice.

    Actually my first thought was “geesus, thats a terrible interface choice” but it’s not really QNX instead of Android, it’s QNX/proprietary Interface instead of Linux/Android which at least makes some sense. Hell i’m highly tempted to get an N2, just so I can get an unlocked bootloader (fscking Motorola) and try out Android on L4 instead of Linux. The paper I saw on OSDev about it was interesting.

  14. That’s odd. I read in several places that it was possible to install Cyanogen-mod on the Galaxy S/Fascinate. That’s why I’m ordering the Fascinate from Verizon instead of the Droid X or the Droid 2.

    Ah well. I’ll research it when I get it in my hands. If not, I’ll just be happy with the longer battery life and the AMOLED screen until the crack comes out.

  15. Note the potential for skew, as folks with older phones are less likely to actively access the Android Market.

    Hmmm? About 30% are Android 1.x, and about 60% are Android 2.x. Note that those numbers will change because most smartphone users habitually get a new phone every 2 years/

    re: QNX: QNX is a good move for RIM. QNX sees heavy use in the defense industry, mostly because it’s EAL4+ certified, and also because it was designed from the ground up to be extremely reliable for embedded devices. It is, however, seeing declining use as embedded Linux has been eating other embedded OSes for lunch. (Greater development flexibility, no royalties, the usual reasons.)

  16. >Hmmm? About 30% are Android 1.x, and about 60% are Android 2.x

    This is close enough to the 70%/30% ratio between the userbases to suggest that users of older phones are about as likely to use the app market, to nearly within measurement and statistical error. Which is interesting in itself.

  17. The QNX acquisition basically ensures that RIM will never die. If you rely on one rapidly obsolescing cellphone platform for your revenues, you risk being made irrelevant in a year or so. If you control the embedded platform that nuclear power plants run on, you become indispensable to Western civilization.

    Embedded Linux is making inroads, however, so much so that it’s practically the mainstream default in the embedded world. Recently I saw an ad for a toy helicopter that boasted of its “military-grade” control technology based on embedded Linux. (The helicopter, it’s worth noting, is controlled by an iPhone — not Android — app that can also do things like augment the helicopter’s video feed with graphics of “enemy warships” to shoot down.)

  18. @esr:

    >Hmmm? About 30% are Android 1.x, and about 60% are Android 2.x

    This is close enough to the 70%/30% ratio between the userbases to suggest that users of older phones are about as likely to use the app market, to nearly within measurement and statistical error. Which is interesting in itself.

    Actually, it is 70%/30%. :) It turns out I goofed when I added the numbers in my head. 41.7 + 28.7 == 70.4, rather than 60.4. As you can see, too much time relying on computers to perform my calculations for me has rotted my brain.

  19. Embedded Linux is making inroads, however, so much so that it’s practically the mainstream default in the embedded world. Recently I saw an ad for a toy helicopter that boasted of its “military-grade” control technology based on embedded Linux. (The helicopter, it’s worth noting, is controlled by an iPhone — not Android — app that can also do things like augment the helicopter’s video feed with graphics of “enemy warships” to shoot down.)

    Um, it is possible to install Linux on an iPhone.

  20. I’m unfamiliar with the concept. Perhaps you mean it’s possible to install a linux image designed to be run off of cell phones?

    I would be stunned if I could just load up Ubuntu on an iPhone.

  21. @ErikZ:

    Linux on the iPhone. Apparently this guy wrote a tutorial to put Android on an iPhone 3G for PC World. (Link is in his blog). FInally, there are various projects that have been started around the Web. Google is your friend.

  22. This is off-topic, but I wonder about Eric’s take on this article on the problems with the IPv4 to IPv6 transition. From the discussion in this article it look like IETF seriously screwed up by not keeping backward compatibility with IPv4.

  23. >I wonder about Eric’s take on this article on the problems with the IPv4 to IPv6 transition.

    There’s not much that was new to me in there, other than some interesting details about how the IPv6 version of DHCP works. Yes, the failure to design IPv6 for backward compatibility has looked to me like a colossal blunder for some time, but its one of those cases where I have been reluctant to criticize in public without knowing the design rationale for the original decision. Which I still don’t.

  24. You are right of the emergence of Samsung as a smart phone OEM player and I think HTC already reacted. For their newer Desire phones they switched from AMOLED to SLCD displays, so I believe there is more to come when those two play it out.

  25. Microsoft is now taxing Android. Something it never managed to do to Linux.

  26. The reason Android is popular despite the fact that it’s the second-best looking operating system is because it puts out for the carriers. It lets them have their way with it. It’s cheap.

    Actually, it’s worse than cheap. It’s free. They don’t even have to take it to dinner.

  27. J. Jay Says:

    > Microsoft is now taxing Android. Something it never managed to do to Linux.

    I have read Ballmer’s claim.
    http://www.zdnet.com/blog/btl/ballmer-talks-windows-phone-7-prospects-androids-patent-fee/39946
    I have not seen a confirmation from Google.

    wet behind the ears Says:

    > Actually, it’s worse than cheap. It’s free.

    If J. Jay is correct, it is not free (as in beer, nor as in speech), but I do like your third understanding of ‘free’.

  28. TMoney,

    As the Mobile Crunch article states, “This would be akin to a computer sold with Microsoft Windows containing chip that prevented users from installing Linux or another operating system of their choice.”

    Android is open for the carriers, not their customers.

  29. I think the Samsung Galaxy Tab might be a very dangerous iPhone-iPad killer, the 7” display is between these two, probably big enough to read stuff comfortably, small enough to put on a Batman-belt or into the inner pocket of a jacket – the iPad is too big for that. According to reviews plays YouTube videos on PC speeds. My wet dream is a PDF / plain text / HTML reader which I can scroll or page by simply tilting down, because there are lots and lots of interesting e-books to download from archive.org in these formats.

  30. WSJ reports that iPhone is coming to verizon in q1 2011.

    ESR: prepare to be wrong (again)

  31. >WSJ reports that iPhone is coming to verizon in q1 2011.

    Still rumor, as none of the parties have confirmed it yet.

  32. Sprint just announced three new Android phones with prices at $150 (Samsung Transform – Android Version 2.1), $100 (Sanyo Zio – 2.1) and $50 (LG Optimus S – 2.2). This market really is looking like the PC market, with Android being the Wintel equivalent.

    Perhaps someone who likes Apple will come along and violently agree with me that Apple likes to produce a higher end, higher price product with a smaller market share. (I like Apple too, but I’m cheap, err, price sensitive.)

    One thing I do not like about most of the analysis here (and in the industry) is the somewhat arbitrary distinction between “smart” and so-called “dumb” phones. Even the free (fully subsidized) “dumb” phones have noticeable “smart” functions, like the web, games, music and calendars. The slightly more expensive “dumb” phones are optimized for texting, photos and music, with slide out keyboards, cameras and stereo. I expect Android (but not Apple) to take market share from these so-called “dumb” phones until the only dumb phones left are those like the Jitterbug which are phones only.

    Yours,
    Tom

  33. >>WSJ reports that iPhone is coming to verizon in q1 2011.

    > Still rumor, as none of the parties have confirmed it yet.

    Are you really that non-savvy about the media, or is playing dumb part of your ‘game’?

    The WSJ doesn’t print definitive statements based on unconfirmed rumors.

  34. >The WSJ doesn’t print definitive statements based on unconfirmed rumors.

    This rumor has been popping up like clockwork every autumn since 2008. Verizon iPhone in about 6 months! No, really, this time for sure! Wishful-thinking fanboys like you have bought it every time. Because I didn’t fall off the cabbage truck yesterday and know that (a) AT&T will hold on to the U.S. iPhone exclusive with limpet grip as long as it can, and (b) it would be totally to Verizon’s and Apple’s advantage to confirm the rumor if it were true, I remain skeptical.

  35. While its true that this rumor pops up like clockwork and should therefore be disbelieved without some convincing evidence (and an article in the WSJ really doesn’t count), your two arguments do not mean that the rumor is not true either. While AT&T will try to hold on to the iPhone as long as it can, the relationship between Apple and AT&T has soured quite a bit, and it seems unreasonable to expect that the 5 year agreement has not be renegotiated since the first iPhone. Aside from the fact that the terms have changed (see subsidies, no more unlimited data, in store activations instead of online etc) and the multiple failures of AT&T to make a product launch successful (iPhone, iPhone 3G), to suggest that the contract hasn’t been renegotiated would mean that Apple signed a 5 year agreement in one of the fastest growing markets and is content with that agreement.

    As to things being to Apple or Verizon’s advantage to be confirmed, for one Apple never confirms rumors, even when it is seemingly to their benefit. Apple derives immense value from their secrecy, and I imagine they view continuing their standard secrecy policy as immensely more valuable than the number of individuals who will

    A) sign a new cell phone contract between now and the new release date who are not on Verizon, and not on AT&T and are willing to switch to Verizon but not AT&T
    and
    B) be unwilling or unable to break that contract for an iPhone.

    I think you underestimate the value of “one more thing”.

    As to Verizon, it might be beneficial to them to a small degree (see above points) but I think Verizon would rather not cannibalize their current phone sales, and would rather collect full price from their customers who are too early in their contracts to subsidize a new phone.

  36. > Compare the Epic to Sprint’s flagship EVO 4G, or the Vibrant to T-Mobile’s much-touted G-2. Samsung seems to be repeating its historic product strategy for dumb phones, which centered around being a technology follower rather than leader and trying to own the broad middle range of the market.

    Except that Sprint is getting *$50 more* for the Epic than the Evo. As someone who likes PTT and has to ssh into servers, the side button and hard keyboard are fetching to me… but as someone who’s presently unemployed, 50 bucks is a fair amount of extra money. My Curve 8350i isn’t *that* unlivable… ;-)

  37. > When even Apple has proved unable to hold its own against Android I gotta wonder what makes RIM think they can do it.

    Well, RIM has military-grade encryption on their phones as a selling point to potential customers…

    Wait; what?

  38. And finally, Shenpen says:
    > I think the Samsung Galaxy Tab might be a very dangerous iPhone-iPad killer, the 7” display is between these two, probably big enough to read stuff comfortably, small enough to put on a Batman-belt

    I think it likely that I hold the record for highest Batman Factor (irritatingly, I know I’ve itemized this on my blog, but can’t find it; it was 6 or 7 years back, and I had enough stuff that I actually got a velcro over-belt from a cop shop to hold it all; including the holsters, it was *well* over 20), and I’m quite certain that the 4.3″ screen on either my n800, or the EVO/Epic I want to replace it with is the *absolute* largest screen I’d be comfortable carrying on such a belt.

  39. @tmoney/@Facebook is Evil:

    There is no Verizon iPhone. An article in the WSJ, as tmoney pointed out, is not proof of a Verizon iPhone. Furthermore, while it is not unreasonable to assume that Apple would have wanted to renegotiate the 5 year exclusivity, it is unreasonable to assume that AT&T would cave on that. People in hell want ice water; that doesn’t mean they’ll get it.

  40. @Baylink:

    I think it likely that I hold the record for highest Batman Factor

    This is your blog right? I remember seeing it on there. I’ll vouch for you. :)

    (He’s that MythTV guy…)

  41. @Morgan

    Perhaps, but I think of the two AT&T is in the weaker position. Never mind that contracts can and are broken all the time, if Apple thought it was in their best interests to break contract, even despite the penalties, I imagine they would do so in a heartbeat. And as I’ve pointed out, unless you really think that the massive changes to how things work with the iPhone were all written into the contract ahead of time, I’d bet it already has been renegotiated. Whether Apple traded unlimited data for an early out is another question, but I think it’s almost a given that the original terms of the contract have been renegotiated to some degree.

  42. @tmoney

    Perhaps, but I think of the two AT&T is in the weaker position.

    As has been demonstrated by recent events in the Android side of the market, that’s not the case. The carriers have all the strings — at least at the moment. Google has shown itself to be adept at playing this game; Apple has shown itself to be horribly inept.

  43. > I think it likely that I hold the record for highest Batman Factor

    OT: Did you use suspenders? I’m thinking of suspenders to keep up the extra weight when I start to Batman out.

    I’m hoping for Android to entirely eat the low end of the market very soon. I’d like to get my middle daughter, the technophile, a free Android phone. She doesn’t need the fanciest camera, etc, but a really good phone browser and a nice GPS app (since they all have GPS hardware for 911 calls) would be nice. I really am cheap, err, price sensitive, which is why my eldest owns a Creative Labs mp3 player. I looked at the iPods, I really did. They were nice, but Jobs is so proud of his stuff….

    Yours,
    Tom

  44. @Morgan

    You’re going to be more specific, because I don’t quite see what you’re getting at. Google has, to my mind, played the game much worse than Apple. Where Apple doesn’t really need the carriers any more (they did at first, but there’s enough consumer demand for “The iPhone” that Apple can wield that stick at least for a little while) Google/Android seem to need the carriers, hence the carriers are given the freedom to lock down and abuse their consumers and their android phones. That isn’t to say that AT&T haven’t abused their iPhone customers but where as the iPhone remains carrier cruft free all around the world, we have Andy Rubin (an unquestionably very smart man) trying to convince us that carrier cruft is a Good Thing(TM)

    To be honest, I think Google’s acceptance of carrier cruft on android is a huge step backward from the leap forward Apple tried to take with the iPhone. Stepping away from the open/closed arguments for a second, the iPhone was and remains one of the only cell phones that you could buy where no matter what carrier you bought it from, it was the same phone. That’s huge, and it held so much promise, but with Android, because Google didn’t use the desperation of the carriers to their advantage, you now have such wonderful experience as the same exact phone being sold under different names, with different (crappy) interfaces and various levels of accessibility to the applications and even the application marketplace (see Skype as an example)

    Right now, if Google said “take off your cruft or we won’t give you more updates” I think the carriers would laugh them off.

    By comparison, let’s say that the Verizon iPhone rumors are true. Do you imagine that it’s going forward with verizon cruft for the interface, or do you think Jobs said “you will do it our way, or you won’t have the iphone, oh by the way, I hear Sprint is interested in having the phone, and I just got a call from T-Mobile today too”

    Put another way, the Google sold phone failed, and failed pretty hard. If tomorrow Apple started selling plain old, no carrier lock iPhones, do you think it would fail?

  45. As has been demonstrated by recent events in the Android side of the market, that’s not the case. The carriers have all the strings — at least at the moment. Google has shown itself to be adept at playing this game; Apple has shown itself to be horribly inept.

    Apple is the only cellphone OEM powerful enough to show the carriers its middle finger. The iPhone is AT&T exclusive because AT&T met Apple’s demands, not the other way around.

    As for the Galaxy Tab, it’s not going to kill shit. No one else is in the same league as Apple when it comes to the fit and finish of a product, and it’s that fit and finish which consumers see. The also-rans will do what also-rans do best: provide a cheap alternative for people who want, but cannot afford, an iPad. But nothing can replace the real deal. Not until the manufacturers get a clue about industrial design and how to fit a product seamlessly into daily life the way Apple has.

  46. > Stepping away from the open/closed arguments for a second, the iPhone was and remains one of the only cell phones that you could buy where no matter what carrier you bought it from, it was the same phone. That’s huge, and it held so much promise…

    It holds no / zero / zilch promise for me, since:
    1) The iPhone isn’t available from my carrier.
    2) I won’t change my carrier.
    3) I really am cheap.
    4) The iPhone is not cheap, err, inexpensive.

    1 may change. 2 and 3 won’t change until I die. 4 won’t change until Jobs retires. Those who love Apple don’t want 4 to change even if Jobs retires. You know you don’t. You love the cachet that the expensive brand brings.

    > As for the Galaxy Tab, it’s not going to kill shit.

    It will eat some sales. I am not the other cheap person who won’t buy an iPad but will buy something like a Galaxy Tab. At my house all anniversaries are electronic anniversaries. Sometimes the only cool gift I can think of is electronic, and the people I buy for have not specified, as I have, that luxury food items are always a good gift.

    Yours,
    Tom

  47. @ Tom

    You missed my point. The promise wasn’t in so much in just the iPhone so much as the potential for the manufacturers and the phone makers to define their product and their experience, not the carriers. It was the opportunity to not have your phone dictated by the carriers, and had Google had the willpower to hold out to the carriers the way Apple did, we might have a whole different Android world now. This is especially disappointing when you consider that Google had the position to hold it over the carriers. The iPhone was the only device like it on the block, the other carriers were desperate, instead of exploiting that desperation to change the game, Google gave them the ability to continue playing the same way they’ve been playing for years.

    As to the cost of Apple products, it’s great that you trot out that old horse like it has relevance. However, I would like to direct you to the fact that all 3 of verizon’s big android offerings are $199 (after $100 mail in rebate and 2 year contract), which happens to be the exact price of a 16GB iPhone (with 2 year contract), an older model iPhone is also available for $99 (with 2 year contract). The G2 is also $199. So unless you’re using some new definition of expensive brand that I’m unaware of, I think you’ve missed your mark.

    Now, you might be talking compared to dumb phones, but that’s hardly an appropriate comparison. It’s also worth pointing out that a mere 5 years ago, my dumb Sony Ericson cost me $150 with contract… time marches on but $100-200 phones are not out of the ordinary.

  48. It was the opportunity to not have your phone dictated by the carriers, and had Google had the willpower to hold out to the carriers the way Apple did, we might have a whole different Android world now.

    It’s not just a question of willpower. It’s more of, do you have a compelling enough product on its own terms to where the carriers will dance to your tune rather than the other way around? In the case of the Nexus One the answer is no, whereas in the case of the iPhone the answer is “fuck yes, it’s an iPhone you idiot”. The Nexus One was a cool phone, but regrettably being “the most powerful Android smartphone” (in its day) is an item of concern only to geeks. The awesomeness of the iPhone should be in evidence the moment you pick one up and try it.

  49. > Those who love Apple don’t want 4 to change even if Jobs retires. You know you don’t. You love the cachet that the expensive brand brings.

    Nah, I’m actually pretty happy when Apple gear gets cheaper. And I’d bet real money that the lowest end of the Galaxy Tab will cost at least $600, either unlocked or over the life of the contract. You’ll get two cameras, which the iPad certainly doesn’t have, so I’m not saying it won’t be worth it, but you’re certainly going to pay more. The cheap approach is still the $500 iPad.

    That said, the Galaxy Tab is going to do well, barring some really awful battery life.

  50. > You missed my point.

    Nah, just complaining about the iPhone. I understand the good philosophical reasons why a consistent user interface is desirable. Do you understand good philosophical reasons why carrier variations are exactly like Linux distros and the (different) benefits thereof? Do you understand why Google, having embraced the open source philosophy to a degree that Apple never has, could not disallow carrier variations?

    > As to the cost of Apple products, it’s great that you trot out that old horse like it has relevance.

    You aren’t keeping up with Android prices and features. (They were lower than I thought, too.) There is actually a new Sprint Android phone for $5 after instant discount and new agreement. Android phones also often have desireable extra cost hardware features (like WiMax, slide out keyboards, removable batteries and memory cards) that you just can’t get on the iPhone. That Sprint phone has a touch screen, a slide out keyboards, a removable battery and a memory card slot.

    > Nah, I’m actually pretty happy when Apple gear gets cheaper.

    It never gets to be the cheapest. Me, I’m sucker for cheapest. And you know that there are plenty of people for whom the cachet of a higher price is a feature, people who could be lured away to another (well executed) brand if it always was, on average, slightly higher priced than Apple. If Apple was cheaper you couldn’t convince them that it was awesome and compelling by comparison.

    Mercedes. BMW. Godiva chocolate. You know the brands that do this.

    Yours,
    Tom

  51. @ Tom

    No, I really don’t see how carrier cruft and locks are anything like linux distros. Nor do I see how they provide any real benefit to the consumer, unless we’re now going to start arguing that the fact that the G2 reinstalls itself if you jailbreak it is a feature. I get that Google has a different take on their OS than Apple, but what I don’t get is why Google squandered the opportunity Apple provided to put the power of the handset in the hands of the manufacturers and the consumers rather than the carriers.

  52. > No, I really don’t see how carrier cruft and locks are anything like linux distros.

    Well, then you don’t think it’s possible for the carriers to add differentiating value via software, which is the whole point of open source and Linux distros. Carriers are in fact motivated to add value via software to differentiate their products, just like manufacturers (including Apple), and open source gives them the freedom to do so. Sometimes people will not agree that it adds value, although actually it will vary. You may not want the Sprint NASCAR apps, but if NASCAR fans do, that adds value for them. I suspect that the trend will be towards something like these Sprint ID packs, where you don’t have to add them if you don’t want them.

    That should have been obvious from the nature of open source, but I think you have repeated the phrase “carrier cruft” to yourself so often that it’s made it impossible for you to draw the obvious conclusions.

    Locks, OTOH, don’t have anything to do with Linux distros, although I’m sure there have been locks on some BSD distros. Me, I think the freedom to lock up the software you write or hardware you sell is also an important freedom, and I’m glad BSD supports that. I know that plenty of people will argue that locking them up is counterproductive and bad marketing and so on, but I believe that paranoid control freaks and other people who adopt sub-optimal strategies should be allowed to benefit from open source software too. Which is why I prefer the BSD license over GPL, and I don’t care too much if Jobs controls the iStore any old way he wants, as long as he approves any apps I write. :)

    > but what I don’t get is why Google squandered the opportunity Apple provided to put the power of the handset in the hands of the manufacturers and the consumers rather than the carriers.

    What your position comes down to is that only Google, the manufacturers and the consumers are capable of adding value via software and that the carriers never are. That’s nonsense. Google gives power to Google, the carriers, the manufacturers and the consumers. If Google wants to lock something down, they can. If a carrier wants to lock down a device, they can. If a manufacturer wants to lock down a device, they can. And if the consumers don’t want to buy locked down devices they can avoid them or break the lock, just like every other device. And if a software knowledgeable consumer wants to take a device which is not locked down and lock it down for their own reasons (I can think of some, can you?), they can.

    Yours,
    Tom

    Yours,
    Tom

  53. Morgan: this blog here isn’t mine, obviously, no. :-)

    I thought I’d blogged a list, but googling my own blog didn’t turn it up; I know I *wrote* the list; it’s just a case of figuring out where I put it, if anywhere.

    Tom: No, I never *quite* needed suspenders, but I was a bit more slender then than I am now, I probably couldn’t pull it off anymore.

  54. The reviews of Windows Phone 7 are coming in and they’re mostly positive. Plus there’s the fact that .NET is the most popular software development framework in the world right now. Google is going to have to bring its A game if it wants to compete with the brand reputation and developer mindshare Microsoft commands.

  55. @esr> My prediction months ago that Android would pass Apple iOS in total share in the fourth quarter of 2010 is looking more prescient all the time.

    Right now, all the smartphone platforms are trying to create a solution to match iOS; not because they think it best but because they want to capture Apple’s ungodly profit margins. Of course, they also want to achieve this while achieving the largest market share.

    It is unlikely the two can co-exist, at least for more than a fleeting moement, which is the primary reason Apple tries not to ever veer from its focus on margin over share. Once you focus on market share, just once, you pop your cherry. There’s no going back. You have to build and price and distribute for share, not margins.

  56. Also

    >>WSJ reports that iPhone is coming to verizon in q1 2011.
    >
    > Still rumor, as none of the parties have confirmed it yet.

    I think Eric is forgetting that the WSJ is Apple’s favorite mouthpiece, and ignoring the fact that the NYT has independent confirmation.

  57. >Plus there’s the fact that .NET is the most popular software development framework in the world right now.
    >Google is going to have to bring its A game if it wants to compete with the brand reputation and
    >developer mindshare Microsoft commands.

    This is probably the biggest threat that Microsoft and Windows phones can present to both Android and the iPhone, attracting developers back. The .NET languages are not that bad, and the visual studio IDE and its offshoots are excellent pieces of software. I might even go so far as to say that for new developers it might be the best IDE you can use for quickly and easily putting together software. If there is one thing I really really wish both Apple and Google would do, it would be to spend some time making a better IDE for their platforms. Windows phones have a long road ahead of them to gain back the losses they’ve taken to RIM, Google and Apple, but if they ever pick up steam again, their developer tools will be a siren’s song.

  58. > Maybe there actually is a roadmap:
    > Verizon to sell Apple iPad starting October 28

    Imagine life as a Verizon sales clerk on Oct 28. Suddenly you’re dealing with an order of magnitude more volume in questions about the availability of iPhone on Verizon. Your marketing people are pulling their hair out, because everyone is only talking about Verizon getting the iPhone.

    This is, no question, an iPhone on VZW soft-launch.

  59. Carriers can add value.

    And in a free competitive environment, you could take it or leave it. In the United States, though, you were forced to accept the carriers’ value-adds.

    Until the iPhone.

  60. >T-Mobile to begin to reduce data speeds when you reach 5GB in any billing period. Starting Saturday.

    To be fair to T-Mobile, they have been doing that for a while now, and it’s better than the overage charges you get from any other provider.

  61. > Android brings in $1 billion a year [on an annualized basis] to Google, helps drive soaring profits

    That $1B is revenue, of course, not profit.

    Meanwhile, AAPL just released their Q4 results. Their Q4 revenue was a tick over $20B, given the curve they’re on, they’re tracking to do $100B/year.

    Pseudo quoting Jobs from the conf call (minutes ago):

    Google is activating 200,000 Android devices per day, and has 90,000 apps in its App store. Apple activated about 275,000 iOS devices per day over past 30 days, with peak around 300,0000 on some of those days. Apple has 300,000 apps in its App Store.

    Apple passed RIM in terms of quarterly shipment, (phone for phone) too.

  62. >Apple activated about 275,000 iOS devices per day over past 30 days, with peak around 300,0000 on some of those days.

    The percentage of those that are smartphones is unknown, however. The rest are iPads.

  63. I don’t think comparing revenue numbers makes sense – the business models are wildly different. Oh, and some of those iOS devices are iPod Touches, fwiw.

  64. >The percentage of those that are smartphones is unknown, however. The rest are iPads.

    In the view of Android Vs iOS, that really doesn’t matter does it?

  65. > The percentage of those that are smartphones is unknown, however. The rest are iPads.

    and iPod Touches.

  66. > The percentage of those that are smartphones is unknown,

    Well no, not really. Lets just quote what Jobs said and do some simple math together.

    Apple said they sold 14.1 million iPhones during the quarter, and 4.19 million iPads.

    275,000 * 90 = 24,750,000, give or take, so around 6,550,000 iPod Touches.

    14.1/24.75 = pretty close to 57%.

    Jobs quoted Google CEO Eric Schmidt as saying that the company handled 200,000 Android activations per day, and then questioned the data.

    200,000*90 = around 18 million Android phones.

  67. (man this blog is broken… Eric, get some comment editing, will ya?)

    The other thing to note is this: Apple admitted that they were both manufacturing constrained on iPhone 4, and that the announcement of iPhone 4 had impacted sales.

    Gene Munster – Piper Jaffray

    Peter, just one quick question. Our tracks were that you had about three weeks lead-time in most of your countries on the iPhone throughout the quarter. You mentioned you could have sold more iPhones. How do you think about what the true demand could have been in the quarter?

    Tim Cook

    I think that which you’re referring to is the quote that’s on the Apple Online Store. What I would say is that the demand in all countries is absolutely staggering. And at this point I can’t predict when supply will meet demand. I feel great about our ability to move the supply and the sales up from an $8 million kind of number to over $14 million. But it’s clear, last quarter that wasn’t enough. And we are obviously working on that, but it will take some time to increase further.

    Gene Munster – Piper Jaffray

    Were you more supply-constrained in the September quarter versus the June quarter? Totally different dynamics in the quarter, but any perspective on the two quarters?

    Tim Cook

    It’s clear that the iPhone 4 and the announcement of iPhone 4 and the demand for it took the demand to an entirely different level. And we had anticipated a very different level, but it’s even higher than that.

    So demand is still larger than Apple’s ability to supply.

    See here for the actual words that Apple said:
    http://seekingalpha.com/article/230710-apple-ceo-discusses-f4q10-results-earnings-call-transcript?source=nasdaq

  68. (man, this block is f__ked. last comment is “awaiting moderation” because I include *ONE* URL!)

    Also, note that Apple provided guidance for next quarter with revenues projected to be about $23 billion (.vs $20.1 billion) and EPS at $4.80 (.vs $4.64)

    In other words, they expect to grow another 10% during the next quarter, but not be quite as profitable (they provided answers for ‘why’)

  69. > It never gets to be the cheapest. Me, I’m sucker for cheapest.

    Tom — the Samsung Tab was just announced at $600. The monthly plan is $20 for 1 GB of data. So that’s $100 more expensive than the iPad. Still a sucker for cheapest? ;)

  70. > Tom — the Samsung Tab was just announced at $600. The monthly plan is $20 for 1 GB of data. So that’s $100 more expensive than the iPad. Still a sucker for cheapest? ;)

    My latop was $200 cheaper two years ago. Cheapest is only good if it’s cheap. I’m not a sucker for the cheapest Rolls Royce, for example.

    Yours,
    Tom

  71. To paraphrase an old maxim about open source software — a laptop is only cheaper if your time has no value.

    The iPad is winning because it’s displacing laptops (especially netbooks). It is, in short, almost everything a great many people could want out of a personal computer, and virtually none of the bad stuff (viruses, etc.).

  72. > The iPad is winning because it’s displacing laptops (especially netbooks). It is, in short, almost everything a great many people could want out of a personal computer

    None of these people live in my house. The five people in my house all want to run Office and other Windows apps.

    Yours,
    Tom

  73. So the issue is not cheap vs expensive, it’s simply that the device doesn’t run the software you need (Windows).

  74. > So the issue is not cheap vs expensive, it’s simply that the device doesn’t run the software you need (Windows).

    No, there is more than one issue. If I don’t want what it does, it doesn’t matter how cheap it is. If I don’t like how it does what it does enough, it doesn’t matter how cheap it is. If it’s not cheap enough, it doesn’t matter how much I want what it does and how it does it.

    To substitute for our laptops (which was Jeff’s scenario), it has to run the software we need.

    But there are other devices for which the iPad and the Tab may be better substitutes – like a combination MP3 / video player / Internet browser. But right now they aren’t cheap enough to compete with what we have already.

    We are not going to be in the target market for either the iPad or Tab until they are much cheaper – and by that time the competition will be too cheap for Apple to want to compete on price.

    Yours,
    Tom

  75. Tom DeGisi,

    The point is, you buy a laptop to run Office because you have to — not because it represents a better value proposition. You pay for that capability — not up front in dollars but in time, hassle, and risk to your data.

    A year or three from now the variables in the value proposition equation will have changed, and laptops will be an upmarket curiosity used only by geeks and the odd professional for whom the ubiquitous iPad isn’t quite powerful enough.

  76. > A year or three from now the variables in the value proposition equation will have changed, and laptops will be an upmarket curiosity used only by geeks and the odd professional for whom the ubiquitous iPad isn’t quite powerful enough.

    I don’t think so, Jeff. Keyboards are still too useful if you want to send email rather than just read it. Particularly if you are a long winded old cuss like me. My wife and girls are all writers, too. The iPad is mainly a consumption device, not a production one.

    Yours,
    Tom

  77. Tom, you do realize that both Bluetooth and dock keyboards are available for the iPad? And that Apple’s versions of each are going to be better than most PC keyboards?

    Hell, if PC keyboards decline any further, typing on a touch screen may become preferable to using a real keyboard…

  78. Jeff,

    > Tom, you do realize that both Bluetooth and dock keyboards are available for the iPad?

    Yes. They are both extra cost and another piece to carry around. My cheap laptop also has a DVD-RW and several USB ports.

    > And that Apple’s versions of each are going to be better than most PC keyboards?

    For you sure. For my family, who would have to learn new keys and shortcuts, not so much.

    > Hell, if PC keyboards decline any further, typing on a touch screen may become preferable to using a real keyboard…

    This is not my experience.

    BTW, when you consider to cost for everyone in my family to learn a new OS, we don’t save any time by switching. You will notice we aren’t adopting Dvorac keyboards or Linux either. It really doesn’t make sense for either Apple users, PC users or Linux users to switch most of the time.

    Yours,
    Tom

  79. P.S. Sprint is coming out with the Samsung Tab on Nov. 14 for $399 with either a $29 (2 GB) or $59 (5GB) per month data plan.

  80. … and a two year contract. It is not entirely surprising that wireless devices with a contract are more expensive than those without, and as an intelligent consumer, I’m sure we all know why.

  81. Now, the new Nook color? That is a very interesting, very cheap Android tablet.

  82. Even Steve Wozniak admits that Android is outdoing iOS in terms of sheer volume of deployed devices. However, there are far more iOS apps than Android apps; iOS apps tend to be of much higher quality and have fewer security issues; and people are actually buying iOS apps.

    Android phones are destroying the low end of the feature phone market. But currently there are two big players in the app platform category: iOS and Windows Phone 7. When the most compelling app is something like “Wireless Tether for Root Users”, you’ve essentially geeked yourself out of the mobile app space.

  83. Jeff,

    My new Epic has loads of new apps which I loaded and like. None of them is called “Wireless Tether for Root Users”. Most are games. :)

    Yours,
    Tom

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