Android Trumps Nokia's 'Not Available For Download'
A developer recently clicked the link to the Ovi store from his Nokia N86 (note that Ovi isn't even pre-installed!) And when he asked to download the app store, he got a message that "this item is no longer available." That's why when Gartner analyst Ken Dulaney says Google's Android operating system will overtake iPhone but not Nokia in worldwide smartphone sales, he's only half right. Android will zoom past both by 2012 thanks to superior distribution, and the sleepiness and unearned cockiness of Nokia.
According to Dulaney,
Apple currently has a 10.8 percent share of the smartphone market, which is predicted to grow to 13.7 percent by 2012, with sales of 71.5 million units. And even though Symbian and Nokia are predicted to lose 10 percent of the market, the platform's massive lead keeps it well ahead of competitors with 39 percent in 2012. Dulaney said he believes Android will surpass the iPhone in market share because many handset makers are "betting their future" on Google's Android platform, while Apple is only one company.I think Dulaney must be afraid to go out on a limb, because there's no reason on the planet to assume just 10 percent market share growth for Android over the next three years, especially given its tiny base. Remember, there are just a handful of devices running Android on the market today, and there could be upwards of forty by 2012. And because it's open source, it will quickly overtake Nokia in the developing world as well, especially with the help of outfits like Borq, which helps vendors differentiate their Android distributions.
In fact, that huge lead Dulaney says provides Nokia a buffer against the onslaughts of Android and any other challengers is actually blinding Nokia to the danger it faces. Nokia has built that seemingly impregnable lead in worldwide market share thanks to a strong presence in the developing world, and paradoxically, the developed world is only now just catching up. But the paradox is in fact explained easily enough; consumers in the developed world have been slower to adopt smart phones because the devices are crimped and feature-starved compared to laptops which first-world consumers can afford more easily than their counterparts in the developing world. But significant improvements in smartphone functionality make those devices more appealing, helping the market for smartphones in the developed world explode, to the advantage of Android and the iPhone.
And while the iPhone will continue making huge strides, it will inexorably fall behind Android. Remember, the mobile device business is driven by applications, not hardware. The iPhone built enormous momentum by bringing a deadly combination of both hardware and software innovation to market at once. But hardware innovation is a fleeting advantage and is arguably no longer a major selling point for the iPhone (hence the barrage of "there's an app for that" ads by Apple -- now mimicked by Verizon Wireless).
We're already at the point where developers are realizing that not all iPhone apps lead to a pot of gold. For every Mellmo, which is doing well enough to attract additional investing, there's a Never Alone Anymore or other flash-in-the-pan mobile app. The real money is increasingly going to developers smart enough to create apps that run on both iPhone and Android devices (which is possible because both operating systems run roughly equivalent Webkit-based mobile browsers).
Thus far, it's easier for developers to generate revenue from selling apps to iPhone customers because the iTunes platform is familiar to end users, and the billing system is easy for developers to use. But Google provides its developers with better marketing metrics than Apple, and improvements to Google Checkout combined with carrier-based payment systems will solve the monetization issues. As Dulaney says, Apple is just one vendor, while Android will span dozens. Google has also solved cultural differences with Verizon Wireless and AT&T, or at least papered them over enough for the carriers to be willing to work with its operating system.
Not only will Android surpass Nokia and Apple, it will do so earlier than 2012.