The end of the iPhone domination, the start of a new era (or so I hope)

I am an iPhone fan, I develop applications on it, we bought one for every member of my family and I cannot help but to show people the latest app. With that said I am the first one to say that the iPhone needs competition. Today it has none. Before you start entering flaming comments, please give me a chance to explain my position.

 First, the Google announcement.

After an intense weekend of rumors, Google announced officially Monday December 14th 2009 that they will go to market with their own mobile device named Nexus One. Bravo! About darn time, actually! Why? Because if Google delivers the proper strategy with Nexus One, the iPhone will finally have competition and we can all emerge from the era of mobile telephony and enter, en masse, into the era of mobile computing. That is a big “if”, let’s explore.

Why doesn’t the iPhone have competition today

In one sentence, because they are the only one who built an ecosystem for mobile computing. Everybody else is building mobile phones that run apps. The difference may be subtle but dramatic once you grasp it. Let’s put money in the picture, please have a look at this article about worldwide smart phone market share.

In Q3 2009 Nokia had 39.3% of the worldwide market, RIM 20.8% and Apple 17.1%. So? You may erupt. Well…

Apple’s 17.1% is one device, one platform, one ecosystem.

Nokia has several platforms and dozens of devices, RIM a little less but a far cry from one.

One is a beautiful number when it comes to building a platform. It allows you to focus your resources on one hardware project, one supply chain, one marketing plan, one OS, one SDK and so on, you get my point. Google evidently is getting the point too, finally. Much as their original intent with Android was to create one open source mobile OS, the reality is that today every manufacturer has modified and adapted their own version of Android and the end result is fragmentation, much like what Nokia and RIM are experiencing.

Enter the new era

Goggle decided to do something about it (or so I hope) and Nexus One hopefully will put an end to Android fragmentation by introducing a reference spec that all other manufacturers will want to comply to so that their Nexus One “clones” can run the same apps. Sounds familiar? Those of us old enough to recall the first PC will easily see the similarities. This is the beginning of the mobile computing era much like the introduction of the 8086 and DOS became the beginning of the personal computing era. My hope is that Nexus One and Android will do the same for mobile computing. If that happens, eventually there will be iPhones, Nexuses and Nexus clones and everything else will fade away. What about Nokia? RIM? Palm? Frankly, they are running out of time to join the bandwagon and my take is that Nokia and RIM will have a hard time catching up. Palm may survive if they switch to Android fast. Why? Because they are smaller. What does size have to do with anything?

Why is it hard for the big players to evolve

Companies like Nokia and RIM have dozens of development organizations internally. To move towards this new era they will need to reorg like there is no tomorrow because, frankly, there isn’t. The problem with that is that upper management will need to impose a top down company-wide change in direction that will require management and employees to drop their current projects and move to a new organization dedicated to one platform and one device. In that process you can be sure that groups will be “downsized” and headcount reduced. If that isn’t hard enough you also need to change the company-wide focus to build hardware and switch to the vision of building an ecosystem. So now you have a company-wide reorg strategy where you are asking employees and managers to help you identify who you should fire while you expect them not to worry about that and instead change everything they know and work in a new way. Good luck with that. It is not impossible, Apple did it, IBM did it. But one should not underestimate how much of a challenge it represents to those companies. Meanwhile Apple and Google do not have this problem. That is why they are and will continue to move faster.

What are the challenges for Google

In a nutshell, they need to:
·         Establish their hardware spec as de facto standard
·         Add monetization tools to the Android marketplace to prevent illegal copies
·         Ensure high quality for the applications being released while avoiding the pitfall of Apple’s big brother approach
·         Subsidize or otherwise reduce the purchase cost of the device without getting tangled in another AT&T-iPhone mess (a mess that I as consumer do appreciate since it made the device more reasonably priced, but I digress.)

Fortunately Google has the cash and the talent to address each one of these challenges. Conversely this is something they have never done so the question is not only can they succeed but also how long will it take for them to learn and to close the gap with Apple. Time will tell but competition is always a good thing for consumers so by all means, go Google go!

What does this means to the rest of us

If you work in innovation this is certainly the time to acquire or refine your Android development skills alongside your Objective-c ones. If you are in marketing or development (no matter what industry), you may want to start looking into Nexus One and add it to your mobile strategy for 2010/2011. That is, if you are planning to release an iPhone app and you are wondering what other mobile platform to invest your limited resources into, Android may be your best bet. I know a number of people disagree with me on this, claiming that one should develop for RIM since BlackBerry is still bigger than the iPhone. But we know that not to be true anymore, the Q3 report aforementioned shows that fragmentation de facto makes developing on a BlackBerry considerably less penetrating than you would expect. That is why my position is that Blackberry development efforts should be carefully evaluated and limited in scope especially if your business model is B2C.

Please note that the opinions expressed in this article are solely my opinions and does not reflect Ricoh Innovations' position on this issue.