Android Aggression

America used to beg for immigrants, because the joint was big and there was plenty of room and opportunity to go around.

Kinda like the Android market.

IDC caused Steve Jobs to dance a jig (not a pretty sight) when they predicted that the smart phone market would grow by 55.4% this year, a full 10% more than they had last prognosticated.  Steve could hear cash registers ringing at every Apple store with thoughts of iPhones flying out the doors.  IDC then caused Jobs to change underpants midday when they also predicted that Android and Windows phones would lead this surge in sales through 2014.

Cachet casts a short shadow.

IDC thinks Android smart phones will comprise nearly 25% of units within two election cycles (and can we just call them ‘phones’ since they will be the market by 2014).  Windows phones are estimated to take a relatively paltry 9.8% share, which is vastly superior to their current and enduring abysmal numbers.  This future estimate of Windows mobiles also indicates that medicinal marijuana sales are soaring in Framingham.

In the wake of two key competitors rising, IDC also expect Apple to fall, from their relatively lofty 14.7% to a near single-digit stance at 10.9%, just above Microsoft.  In short, the market is growing strong and Apple will have a smaller piece of the larger pie.  Apple’s unit sales will be up, but their dominance and leadership brand will sink faster than the Sri Lankan navy.

(rounding out the roster, RIM stays steady and Sybian declines though they maintain overall leadership)

One need not ponder long why Android is winning.  Like MS-DOS and Windows, Google is making sure that everybody who wants to make a smart phone has a good (enough) operating system and that developers can get started on the cheap.  Microsoft made their billions by being ubiquitous and the common technical currency.  With no profit motive in the OS itself, Google assures that Android becomes the Windows of smart phones, though without the need to reboot your handset every hour.

Verizon is helping.

Selling handsets is a mixed game, with incestuous finances between manufacturers and carriers.  Verizon champions Android not only because being shut out of the iPhone phenomenon left them in a snit, but also because they see opportunities not open to others.  Verizon’s app store is an example.  Getting iPhone apps involves going through Apple, which for various reasons restricts what is available.  It also keeps carriers from making money on apps, which is a lucrative and rapidly growing business.  Since Google’s goal is to be ubiquitous, expanding the total app count and perpetual app availability is essential.  Thus they don’t care, and possibly even encourage, that other app stores exist (they only created and sold Nexus One handsets to seed the market).  Google may some day shutter their Android app store for lack of interest.

There are three interrelated marketing lessons herein.

1) Today’s new and expensive toys becomes the commodity of tomorrow.  iPhone features will be in nearly every pocket by 2014, though not iPhones.  Attempting to live on mere cachet is, in the long run, impossible and unprofitable.

2) Forcing such commoditization is a way to make big money … tangently.  Google doesn’t earn meaningful lucre from Android licensing (it is, after all, a Linux derivative).  But they do earn ubiquity and such massive scale of adoption leads toward making money in other ways.

3) Open markets drive commoditization, and thus encouraging people to make the small bucks (app fees) creates a market place that is bigger and more varied than your walled-garden competitors.  As Microsoft proved, that strategy makes real money in the long run.

Now, if the analyst at IDC will put down their bongs and put their hands against the wall …


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