Post-I/O Thoughts
Saturday, 22 May 2010
Post-Google I/O, there’s not much room left to see iPhone-vs.-Android as anything other than an all-out war. What we’ve got here is a good old-fashioned epic rivalry.
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The big loser this week, though, was Microsoft. They’re simply not even part of the game…Microsoft? They’ve got nothing. No interesting devices, weak sales, and a shrinking user base. Microsoft’s irrelevance is taken for granted.
Google’s competitive focus on the iPhone at I/O was intense and scathing. But it’s Microsoft’s lunch they’re eating…
Microsoft can’t afford for its mobile platform to account for just a sliver of the industry’s unit sales. Their licensing model is all about volume — low per-unit profits multiplied by an enormous number of units. They’re not selling $400-600 phones, they’re selling $8-15 licenses for an OS.
But Google lets carriers and handset makers license Android for free. And not only has Google cut the bottom out of the market price-wise, by the time Windows Phone 7 phones actually come to market, Android will have two complete years of momentum and market share behind it.
Three years ago, just before the original iPhone shipped, here’s what Steve Ballmer said in an interview with USA Today’s David Lieberman:
“There’s no chance that the iPhone is going to get any
significant market share. No chance. It’s a $500 subsidized
item. They may make a lot of money. But if you actually take a
look at the 1.3 billion phones that get sold, I’d prefer to have
our software in 60 percent or 70 percent or 80 percent of them,
than I would to have 2 percent or 3 percent, which is what Apple
might get.”
Not only was he wrong about the iPhone, but he was even more wrong about Windows Mobile. Three years ago Ballmer was talking about 60, 70, 80 percent market share. This week, Gartner reported that Windows Mobile has dropped to 6.8 percent market share in worldwide smartphone sales, down dramatically from 10.2 percent a year ago. (The same report puts iPhone OS at 15.2 percent, and Android at 9.6.)
Microsoft can’t undercut Android on price, and it seems increasingly unlikely that they can beat Android in terms of features or experience. They didn’t warrant even a passing reference from Google at I/O. No chance, indeed.