6/12/2013: Update: The Galaxy Zoom was announced today. This is a pretty great looking device. If you are serious about photography and have been carrying around a Canon s100 plus a phone like I have, this could potentially make your pockets lighter. (in two ways)
Today Samsung announced the Galaxy S4 active, a dust proof, water resistant, rugged phone. Motorola is talking about the new X phone, a phone with a battery big enough to last for days and a host of new sensors to know when it's in your pocket, traveling in a car or just hanging out. The latest generation of phones from Samsung and HTC include infrared transmitters and NFC and a screen sizes for every hand size and preference. I'm overjoyed with the choices and features in phones these days, but in all of this I have to wonder where is Apple? The former leader in phone innovation which introduced and dominated the smart phone market seems to have quietly slipped into an underdog role.
A bet on the future
A few years back I had a thoughtful debate with a VC friend of mine about the future of the phone market. I had just gotten a shiny new HTC Android phone and was a member or a small minority. I was looking at the fairly unpolished features of Android 2.3 and seeing all the untapped potential. My friend was basking in the glow of the polished iPhone experience and confident that Apple would continue its dominance in the smart phone marketplace. Being an open source advocate certainly influenced my thinking, but I was confident that the open model would eventually produce a phone that would outclass the iPhone. I was so confident in my new Android phone I bet one whole dollar that Android would eventually rule the market. (wow!)
Android turns the tables
New Android phones today ship with a version of Android (4.2) that is
significantly more polished than a few years ago. Android is now a
legitimately beautiful and elegant solution that still offers the
flexibility and power to customize your phone endlessly to your own
Android phones currently outsell the iPhone 3 to 1 in total units, but the iPhone is still a dominant player in the premium market. Here in Silicon Valley most of the affluent people I know are still iPhone users and Apple still has a fantastic brand and an ability to move the entire market, but how long will that last? If Apple continues to sell only one form factor and one premium phone can it really compete in a marketplace full of specialized choices? Should I have to wrap my phone in a big case if I want to make it rugged? Should I have to add an external battery case if I want the battery to last? I want choices and I want my phone to fit my lifestyle.
What could Apple do?
I would like to see Apple learn from its previous mistakes and open up its ecosystem with other hardware vendors. I want iOS to be set free. I believe that if Apple had started licensing iOS several years ago and satisfied the demands of hardware manufacturers it would never have lost market share to Android and would control nearly the entire mobile market. As a consumer I'm quite happy that there isn't one dominant closed source vendor, but from Apple's perspective iOS is really missing the market. Waterproof rugged iPhones, iPhones with 6 inch screens and a whole host of other features would be fantastic, and I would expect that at the top of the food chain Apple would still be selling the highest quality, highest margin iPhone.
Now that I've said it, forget it.
Apple will never do this. They will argue that it would make it impossible to have a seamless experience, that they tried it before with Mac clones and it failed then, and that they are a hardware company. Too bad, opportunity lost. My prediction is that Apple's mobile market a few years from now will look a lot like their desktop market. 10-20% market share on the high end and no real influence in the true direction of the market. They will still command high prices with reasonably high margins, but they will not have a dominate position in anything.
Is Apple losing market share a good thing?
Yes! A market controlled by Apple or any other closed ecosystem vendor would be very scary to me. Apple has a history of telling it's users what they want and ignoring market data. Apple also is trying to extract high margins from its products and benefits by keeping prices high. Fortunately for us the Android alternative is here and has fantastic fundamentals. Android is, at its core, a true open source and truly open technology. Android is built upon Linux, and most of the code is released under the Apache license. That means that we can take the code and use it even if Google doesn't want us to. There are parts of Android that are closed and proprietary, but the meaty core is open to us and essentially free forever. So lets say Google goes all evil on us in the future? Will they be able to pry my phone from my cold dead hands? No, we the consumers, and any other company that wants to, can take the core of Android and release something even better.
OK I'm biased, I admit it
Yes, I admit it, I'm shamelessly writing a blog article about a subject that people just love to argue about. I'm also a huge open source bigot so I'm naturally inclined to like Android. I really just wanted to write about how much I love the progress that Android has made and the fact that for the first time in history an open source operating system has dominate market share. It really is about time!
Feel free to start a debate in the comment section, but please try and put forth reasonable arguments. Nobody benefits from name calling and bickering. I'm sure lots of people will disagree with my predictions, if you have your own, call them out and tell us why you think they are right.