Neither Android nor Windows Phone, apart or in concert, have any hope of defeating iPhone. None. For the foreseeable future, iPhone will remain the world’s most popular, most profitable smartphone by a wide margin. The best apps, the first apps, the most popular accessories, the lion’s share of the industry’s profits all will belong to iPhone.
Indeed, I think the gap in profits and mindshare will only widen from this point forward. The iPhone is simply too good, Apple too rich, iPhone hardware too advanced, the iOS ecosystem too robust, integration across devices and platforms too seamless, retail footprint too large, customer satisfaction too high.
iPhone’s dominance is also partly the result of the right strategic bets. Apple has successfully re-positioned itself as a mobile first entity. Android and Windows Phone not only lag behind iPhone from a financial, technical and platform perspective, their masters — Google and Microsoft — still underestimate just how profoundly mobile will remake computing, work, play, commerce, interactions, our lives. Their smartphones suffer accordingly.
Google, which makes nearly all its money from (stationary) web advertising, continues to focus its efforts on getting more users on the web more of the time. Wise, but not enough. As I have previously shown, the person-to-web relationship is no longer central to the connected user. With smartphones, apps and services such as AirDrop and iBeacons, for example, we will witness a radical jump in person-to-person, person-to-group and device-to-device interactions that bypass the web entirely, never once to cross a Google server or gateway.
Likewise, Microsoft is still designed for a world where the “desktop” is at the center of an ever-expanding sphere of computing devices and services. This is fail. As Ben Bajarin has shown, it is smartphones, not PCs that will serve as the hub of our mobile, social and highly connected lives.
Apple’s iPhone is simply too far ahead of the competition everywhere that matters.
But, there remain opportunities — very big ones, in fact.
As I have written in the past, do not be misled by those who insist that Apple can magically go down-market whenever they wish. This is false. Apple’s skill set, cost structure, corporate expertise and branding all prevent this. Thus, Windows Phone and Android vendors can fight it out over the low-price, low-profit market.
There are several additional paths to take. These can all benefit from non-Apple innovation.
Apple now controls the most robust developer platform for personal computing. No one on the planet foresaw this happening, not even Steve Jobs who initially radically underestimated both the disruptive power of the app and the near-limitless potential of the iPhone.
Therein lies the opportunity.
Apple is now beholden to its developer community. The iPad and then the iPad Mini, the iPhone and then the iPhone 5, all have very specific display sizes in large part because these work best for the nearly million apps available. You may pine for an iPhone “Note” but the fact is Apple cannot offer us a wide array of display sizes because this would harm the performance and presentation of existing apps.
Android and Windows Phone should therefore radically expand their efforts and develop devices that embrace all manner of display size and form factors (e.g. these massive Microsoft ‘tablets’). The upcoming “bendable” LG smartphone and the extremely popular large-display Samsung devices reveal the potential of this market.
Similarly, iOS cannot well support physical keyboards. Mobile devices with physical keyboards — including, yes, the Surface — will remain in high demand for years to come.
The Integration of Things
The shockingly rapid transition from iOS 6 to iOS 7 only hints at the potential power of Apple’s platform. With hundreds of millions already on iOS 7, app developers, payments platforms, makers of accessories and hardware companies all know that building for iOS, unlike all other platforms, is a near guarantee that their service or device will function properly and have access to the most lucrative market.
There is another path, however, one which Apple may simply be unable to support: everything else in our lives.
I want my smartphone to serve as my identity, my credit card, my house key, car key, to manage my heating and cooling, monitor my home when I am not there, control my washer and dryer, serve as my television remote, connect with my medical devices (e.g. blood pressure monitor), track my dogs, offer me instant access to the subway and thousands of other activities.
Given the obvious limits on Apple’s marketshare and hardware development, Android and Windows Phone need to position themselves as the go-to platform for the Internet of Things. Apple and its hardware partners cannot be everywhere.
Smartphones connect us with content, with the web, with one another, and with an ever-expanding array of devices and services. They are the center of our lives. Not the PC, as Microsoft envisioned. Not the web, as Google still believes. The smartphone is the last thing we see at night, the first thing we see in the morning. The odds of some new tech marginalizing smartphones any time over the next decade, say, are extremely remote.
A far more likely pitfall for Apple’s iPhone is government intervention.
No matter your political bent, the long history of government from at least the beginnings of recorded history clearly reveal that wherever there is a great deal of money, government will be there.
Apple has a great deal of money.
Expect new rules on how this money is taxed, how it may be spent, and a bevy of new and potentially inexplicable regulations on what Apple must do to satisfy each nation’s (or region’s) many and varied constituencies. Also expect nations to directly and indirectly limit Apple’s sales in favor of national entities.
How such intervention might impact Apple and iPhone is simply unknowable at this point. I nonetheless expect ongoing and potentially significant government intrusion upon Apple’s business, at least from China and the European Union, possibly even the US.
I suspect that government intrusion, more than the marketplace, more than any new technologies, more even than industry collusion, will impact Apple’s and iPhone’s continued success the most over this next decade.