COMMENTARY Google (GOOG) Chairman Eric Schmidt declared that the Android mobile operating system had, if not outright defeated the iPhone, then at least was getting a comfy lead. (Amusingly, he said that in front of an Apple-fan crowd in Paris.)
That lead is likely to continue even as pent-up demand for the iPhone 4S results in huge sales for Apple (AAPL). But, as Stephen Shankland at our sister site CNET notes, the iPhone still leads in the hearts and minds of app developers. Is that a weakness? Perhaps, but not one that has been able to slow Android's growth. Maybe the assumptions of the critical nature of having acres of apps for consumer harvesting are off base.
Run, it's the smartphone blob!
As Schmidt noted, the big reason Android has succeeded has been by making the software available to one and all (taking a page from Microsoft's operating system strategy for a mobile world). Hardware vendors loved the idea of a free operating system (at least until, like Samsung, they started getting the legal bills from Apple patent infringement suits). There was room for ample customization and the ability for each company to differentiate itself from competitors. Integration of Google's popular online services only sweetened the pot.
Many companies adopted Android. Even companies not in telecom or computers have embraced it. Auto manufacturer Renault is incorporating an Android-based device into its cars, turning them into platforms for third-party developers. Electric vehicle manufacturer Telsa will also integrate an Android-based system into its Model S sedan.
Of course, all of this further blurs the sense of how many of the Android activations that Google periodically claims are actually phones and not some other type of device. But it also raises the question of apps.
Developers like Apple best
As Shankland points out, Android may have the volume of unit movement, but it still trails behind Apple's iOS platform, on both the iPhone and iPad, in attention from third-party developers. Major mobile apps often come out on iOS first. For example, Evernote, creator of the popular cross-platform note-taking software, has a new app available only on the iPhone. Flipboard took its popular iPad reading app and moved it to the iPhone, and the company won't even say if it's developing something for Android.
But Google's Schmidt says the Apple advantage in attracting developers will be short-lived:
Ultimately, application vendors are driven by volume, and volume is favored by the open approach Google is taking. There are so many manufacturers working so hard to distribute Android phones globally that whether you like ICS or not -- and again I like it a great deal -- you will want to develop for that platform, and perhaps even first.
Nice thought, but maybe not so prescient. Schmidt doesn't factor in the practical considerations of developers. The Android market is too fragmented. Different phones run different versions, and that makes developers nuts. Do you target the most up-to-date capabilities of the OS? Or do you go with a low common denominator?
You can't count on phones updating to the newest version of Android on any schedule obvious or predictable to outsiders. Plus, Google is terrible at marketing. Apple may be capricious when it comes to approving an app and restrictive in terms of allowing other distribution mechanisms, but compared to Google, the company is completely predictable, and certainty about the environment is critical to any business.
Much ado about nothing?
But does that actually matter? It's generally industry insiders, analysts, the press and fanboys who get obsessed with counting apps. Predicting success on the inventory of potential apps has become close to divinely delivered Truth.
It certainly seems logical -- these devices run software, so availability of apps should be a critical factor in success. But Android smartphones collectively have blown past the iPhone in unit sales and the growth rate was high even when the number of apps was far smaller. So what's going on? Maybe a giant misunderstanding about the market on the part of the experts.
Unlike a PC, people buy smartphones primarily to be able to make calls and store information. The apps are extras. I suspect that only a small portion of consumers actually consider how robust app availability is. It would be like upholstery being the primary concern in purchasing a car. So long as a relatively small number of popular functions are available, most people will be happy. And making most people happy is enough to dominate a market, even if the cognoscenti think the fact is rationally unexplainable.