Quantcast had a very interesting recent post on their blog outlining how Apple, despite the amazing success of the iPhone 4, is losing share every month to Google’s Android smartphone operating system.
In fact, the trend is clear. It is just a matter of time until Android overtakes iOS (Apple’s operating system) in usage. If the iPhone 4 can’t hold off the charging masses of the HTC Incredible, Sprint Evo 4G (also by HTC) and the Motorola Droid X is it time to panic in Cupertino? Not quite. Just look at recent history – in fact – look at Apple’s recent history.
Here are two companies, Google and Apple, lead by some very smart people, falling into the same patterns that we saw in the mid ‘90s with the rise of the PC. Not that I need to remind most people, but when PCs went mainstream, Microsoft Windows won the battle. They went with a more open infrastructure, providing a cheap, inter-operable system for any PC manufacturer to adopt. With an aggressive pricing strategy and a developer-friendly focus, they quickly dominated the entire PC operating system market. Today, there are around 1 billion PCs running Microsoft Windows. It was a business success not seen since the time of the Gettys, Carnegies and Morgans. Sound familiar? That is Android’s business plan, only they are giving it away for free so Google can own the app store and keep the search traffic in network.
It is largely forgotten, but Apple was much more prominent than Microsoft when they started their PC ascendency. It was said that Apple could have owned the PC. But they chose not to. And it looks like they are going to make that choice again with smart phones. For all the smoke, an expansion of the iPhone to Verizon has been just that. Smoke. I have no doubt that Apple will expand carrier partnerships someday, but that will never be their focus. Their focus will be crazy tight integration of software and hardware with a best in class approach to smartphones, share be damned – just like they did with PCs. Why? To protect margin. Despite having a massively smaller user base than Microsoft, Apple is making a higher profit than Microsoft these days. And organizationally were ready for the next wave in MP3s and now Phones.
What do I take away from this? There are always multiple ways to “win” for our clients. Sometimes you grab the profits sitting right in front of you. But sometimes you need to look down the path and strategically give up near term “wins” for long term brand health (and profits). At times, business objectives need to look beyond this quarter or even year. Think about what success looks like before you make your first move. Until you do that you will rarely get there.
-- Chris Wexler, VP/director of digital media, smartphone addict, Compass Point Media
