A counter-point to that counter-point is that Android's Marketplace has far fewer apps than the App Store (about 4x fewer), and far fewer paid apps (about 2x fewer) [2].

That 8x factor still doesn't explain the 17x difference in revenue. My guess is that the typical Android app is of lower quality (since the store is not moderated) and lower priced in comparison to iPhone apps.

At any rate, given this dramatic change in market share, it seems to me that not deploying for the Android platform at this point is a dangerous proposition, except perhaps if your primary customer acquisition channel is the platform's built-in store/marketplace.

[1] http://techcrunch.com/2011/02/21/861-5-percent-growth-androi...

[2] http://reviews.cnet.com/8301-13970_7-20032228-78.html

[1] http://www.intomobile.com/2010/12/03/angry-birds-android-1-m...

Can you think of any Android exclusive app or game that is achieving a similar success? Then that app is probably a better example.

I'm imagining that a lot of resources have been thrown at Android apps over the past few months in anticipation of continuing growth. We'll see the fruits of that in the coming months.

Let's assume this scenario of 50%. Then it all boils down to how better it is to develop to one platform against the other.

And, to keep it in perspective, I didn't even mention the iPad here...

I always thought Apple was going for the wrong strategy here, once again (like the article points), but I'm starting to doubt it.

At the risk of aging myself, I had an IBM PC in 1981 and watched friends get Macs. The quote above sounds as if it were lifted directly from that time period. The main difference between then and now is that the mobile market is already very large and relatively well explored. Apple's strategy seems nearly identical. Any of this sound familiar?: lots of overpriced peripherals; proprietary networking (see FaceTime); all new technology!... that then basically didn't change for 15 years (co-operative multitasking up until about '00); created the perfect interface and wrote a book about it!... then would only change about the interface in response to competitive pressure.

I don't think Apple is going to have anything like 50% market share of phones or app purchasers. As the article pointed out, the mobile market is going to be won in developing countries and that's precisely where Apple can't play.

- It's a race to the bottom. New competitors enter and price their app lower to compete. Existing players are forced to adapt. Marginal cost is zero so apps eventually settle at the lowest possible price point at which there is revenue ($1).

- People buy apps only once. Right now the market is growing, but once it has become saturated (everyone has a smartphone), sales for existing apps will drop to near zero.

- Freemium always wins the low-end. The low-end doesn't pay for content, so the only way to reach them is to offer the content for free. Revenue is made through advertising or by up-selling after adoption. The web went free because it turns out the low-end is bigger than the high-end.

If it's a given that the paid app market is going to dry up (and I think it is), then it's also a given that app developers will have to have a free strategy. Going free means having more eyeballs, because revenue per user is lower. So, you need to be on the biggest platform, and android is going to be the biggest platform. Why? Because google "gets it" and is spending all their resources into buying up market share, including the low-end (where most eyeballs are). Apple is not going to fight for the low-end, it's not in their DNA. Everyone else is simply not in a position to compete.

Another aspect to consider is that some Android users don't even know that they are Android users. I don't know how many, but speaking from personal experience, it seems a non-negligible percentage of "normal" Android users simply bought a touch screen smartphone in the lower end of the market, because that's what carriers are pushing now. It's running Android, but the owner doesn't know it, and isn't familiar with any marketplace to download apps.

iPhone users though, they know that they have an iPhone and what that entails. Meaning, they know what the AppStore is, and Apple has their credit card information. Some even had an Apple account before they got an iPhone — if they had an iPod previously they can just start buying apps right away.

Counting users is one thing, but what you should be counting are active users of respective marketplaces/app stores.

Android seems to be favored by users that prefer free software and simply spend less as a group.

Q4 iPod sales were down 11% year over year. I'd look for that to accelerate as smartphones become more ubiquitous.

If you want #s of everything, here's what a quick googling yielded:

Android shipped 33.5M devices in Q4 Apple shipped 27.34M iPhones/iPads/iPods in Q4 (~14M iphones, ~4M iPads, ~9M iPods)

Presumably some meaningful percentage of iPods were NOT iPod touches (i.e. no App Store), so shave 3-5M off of Apple if you're trying to guess iOS devices.

So conservatively, about a third more Android devices shipped in q4 than all iOS devices combined. That's BEFORE the 7% market share boost that Fred is talking about.

(this is quick/sloppy research-- feel free to point to better #s).

Android: http://www.mobileburn.com/news.jsp?Id=12707

I'm fairly confident that Android is far enough ahead in smartphones sales (i.e. more than double globally, more than triple in the U.S.) that you can include iPods and they're still ahead and the gap is growing. I'll wait till I see a few quarters of numbers for the Android tablets before I'd be happy assessing how they're doing against iPad sales.

edit: Here's what Apple call their Q1 results, covering Q4 2010:

http://www.apple.com/pr/library/2011/01/18results.html

iPod sales declined 7% year-on-year, the 33 million iOS (pod+pad+phone) number mentioned above which would roughly equal Android smartphone sales last quarter works out if you assume half of all iPods are iPod Touches (I have no idea if that is true, either historically or currently).

The Canalys numbers only covered smartphones (16.2 for Apple in Q4 2010) so the rest of the figures must have been added by someone else.

And the Schmidt number was over 300,000 daily activations at the start of Q4 (it had jumped around 100,000 in the previous two months and growth appeared to be accelerating). Canalys numbers translate to about 366K per day averaged over Q4. It appears later sales rates must be over 400K to bring that average up to that level.

- It doesn't include other devices running iOS (as a developer I look at those too, especially if my app doesn't require Internet).

- It doesn't consider that a big % of Android phones run apps horribly if not at all. Also most of this phone we'll never be easily upgradable to a newer OS version (I don't care if you can do it, I'm talking about for "normal" people), because the carriers and manufactures prefer pushing the new phones that come out every other week.

That doesn't mean that I wouldn't love to tackle the Android market as well, and we'll definitely do that. But we have limited resources so we chose the one that at the moment generates the most revenues.

Unless you put numbers on it, then it's an empty statement.

He's making at least one very important point: Looking at smartphone market share ignores iPod and iPad. The numbers would be different if it was Google App Store target devices (mainly handsets) versus Apple App Store target devices (significant number of iPads and especially iPod Touches in addition to iPhones).

However, you don't have to be a "fanboy" to recognize that Fred is a huge proponent of "free". It makes sense for VCs to promote a zero-revenue, high-growth, "free" approach.imo that explains a lot of Fred's bias towards Android.

I'd say that vc-funded companies should develop on both iPhone and Android (as Color did).

However, most developers will be better off with iOS, if they can only invest in one platform - unless their business model is strongly predicated on a "free" app monetization model.

The battle between Windows and Apple wasn't just about "open" versus closed. It was about availability of third party software. It was about ability to distribute effectively. It was about mindshare. There are other reasons that Apple was not successful through the late 80's to 90's (even when they allowed third party computer manufacturers like Franklin to license their OS). But Apple is an entirely different beast now. And Android appears to be on it's way to such a wide variety of configurations that it may not even be recognizable as Android at some point - what if Amazon's app store becomes real popular? At that point, are you developing for Android or are you developing for Amazon?

I wonder how many major corporations out there right now that are thinking of how tablets could fit into their work environments are playing around with the Android OS? My guess is not many.

Can't we just prefer one good product to another equally good product without being reduced to "fanboys"?

The Chinese market is huge but they do not have the spending power of the Americans or Japanese yet.

Companies will probably not make a lot of money in China right now but it is wise for them to try to penetrate the Chinese market sooner than later so they'll be in good position when things pick up.

This is similar to Android's position. Not a lot of money to be made yet but it would be a foolish move not position yourself in the market.

What Google has done is provide an OS that let's the 'disintegrated' market show up at all, and achieve volume through low pricing and wider availability. This is a huge achievement, because without them the other manufacturers would be lost. That said, even if there had been no Android, could Apple have sold more iPhones? They seem to be selling them as fast as they are able to make them.

I suggest that major advantages will be conferred on whoever achieves greater synergies across the ecosystem of devices (i.e. makes devices work better together).

So far, neither platform has a decisive advantage here. The question is, who is better positioned to move forward?

Google, who don't have a completed tablet story, are stumbling with TVs, and are struggling to contain fragmentation on their phone? or Apple, who have the Phone and Tablet well under control, are well on their way to bringing the desktop into the picture, and have a smoothly improving TV story?

If I were Google, I'd be trying to counter this using the Web and the Cloud - which we see them doing with things like Cloud Print, but it's not obvious how strong their strategy is yet, especially since they can't easily roll out new capabilities to their existing users. That said, they could end up with a trump card (e.g. mobile payments).

The game is levelling up, and we have yet to see either side show their cards let alone stop the other in its tracks.

What's winning here isn't openness (which has many, many definitions), it's commoditization. Android is successfully commoditizing the smartphone market, which is good for Google, good for consumers and bad for the carriers and handset makers (who are willing accessories in their race to the bottom).

A better analogy (IMHO) is, in gaming terms, PCs (Android) vs consoles (iOS).

PCs are more powerful than consoles (except for a short window when the console is released). This of course depends on what (if any) graphics card the PC has. PCs (despite Windows) are essentially "open". You can install what applications, devices, drivers, etc you want. Technically you can replace Windows with something like Linux too (but that won't do your gaming any favours).

Consoles are essentially a closed system. The device is protected from modification (to some degree). Publishing games requires meeting hefty requirements laid out by the console maker (and license fees).

The benefit of the console model is clear: consumer don't need to mess around with them. They just turn them on and they work. Gaming publishers can develop to a much wider audience with a fixed hardware platform.

We've now reached a point where 3D graphics have basically gotten as good as they need to for the vast majority of consumers. It's a bit like the move from video to DVD was huge (in terms of quality). DVD to Blu-ray? The majority of consumers still don't care (and probably never will).

Better graphics engine in games basically translates into higher art/content costs and that is a case of diminishing returns.

So consoles are basically killing off PC gaming (except for a few niche genres)--and here's the key point--because the hardware is as good as it needs to be.

None of this was true in the Windows vs Mac era. The rapid development of Windows-based PCs, both in terms of raw power and price-performance, is really what killed the Mac.

That power is now of far diminished importance. In the mobile market, in some ways, more power is less desirable because it comes at a cost in battery life, size and weight (none of which were ever relevant to the Windows vs Mac debate, other than for laptops). Now shrinking transistors does lead to increases in power but that is fairly predictable and uniform across all platforms.

Consumers, give enough power, start valuing other things like the UI, the design of the device, the ecosystem, the brand and so on (basically this is a "need" to "want" transition).

In all of these areas Apple has a huge lead.

But Apple only produces one handset at the very top of the market. Android wins total market share in smartphones for two primary reasons:

1. Most people just use their phones as phones (diminishing the value of the ecosystem); and

2. Android competes in a lot of markets the iPhone doesn't.

So I concede that Android seems likely to dominate the phone market at this point. I just don't think it's terribly relevant to the future of mobile computing.

The future (IMHO) is about tablets, a market where Apple has an enormous lead and huge advantages, one where the halo effect is likely to benefit everything else they produce.

    Fred has fallen into the seductive trap of comparing 
    Android and iOS to Windows and Mac ... What's
    winning here isn't openness (which has many, many
    definitions), it's commoditization

    The rapid development of Windows-based PCs, 
    both in terms of raw power and price-performance, 
    is really what killed the Mac.

    Consumers, give enough power, start valuing 
    other things like the UI, the design of the device,
    the ecosystem, the brand and so on

    Android competes in a lot of markets the 
    iPhone doesn't

    The future (IMHO) is about tablets

And you can call a PC by any other name, but it's still a PC.

Saying that the future is about tables is really shortsighted; here I was hoping for something as big as the Internet.

That's the main difference between mobile devices today and the PC wars of the 80s. The market (thus far) is no longer interested in low cost custom builds, they're looking for an all-in-one experience. Though perhaps there is room for both approaches in the market, and there won't be quite a winner-take-all scenario here.

2. Mac OS was NOT a piece of shit, though I guess it depends on your priorities. For those that loved it, it was brilliantly designed and useable. They (mostly) forgave its Windows 95-esque brittleness.

3. Saying that every appliance includes a PC doesn't say much about what the computing experience will be like. I personally don't think my fridge and toaster will have much more power than they do today, because I can't see the utility in that (adjusting my fridge temperature from work? eh?).

But I do believe that smart phones & tablets will be the predominant mode of "mainstream computing", given how quickly the iPad is growing.

If you buy an iPhone, a ton of dollars find their way into Apple's pockets and a comparatively smaller pile of dollars make it to carriers, handset makers, and even companies like Pandora/Kindle as Apple moves to own ANY subscription that originates on their phone.

If you buy an Android phone, a lot more companies get a taste of the revenue pie... Basically incentivizing carriers, handset makers, and companies like Pandora and Amazon (Kindle) to spend their marketing and R&D dollars pushing Android.

This is what happened with Apple v. Windows. Apple's product brilliance + marketing dollars simply couldn't match the market power of Microsoft + all of the hardware & software companies that wanted a piece of the action.

The new fight is more interesting-- Apple has a much bigger head start in the market, ownership of the new tablet market, and near-domination in the music vertical with iTunes. But Apple is setting themselves up to be tangling with the combined (and increasingly aligned) market might of carriers, MSFT, Google, Amazon, music labels, and more. Helluva battle coming.

PCs had a different (open) hardware architecture using chips, chipsets, motherboards and other components from a variety of manufacturers (Intel, AMD, Cyrix, Nvidia (later), etc).

Macs had their own architecture from top to bottom from the Motorola chips (680x0, PowerPC, etc) to even the system interconnects.

This custom hardware slowed down the innovation at Apple and drove up the cost at a time when horsepower was really important.

What killed the Mac was cost and scale so when the final nail in the coffin came with Windows 95 (which exceeded the technical capabilities of MacOS in about every way, UI sensibilities notwithstanding) the disparity was vast.

Now? The upper bound on power isn't cost or availability, it's something far more immovable: battery life, size and weight. All the while, CPU differences are largely nonexistent (Snapdragon, Apple's A4/A5, etc).

So, to be clear, you could buy a better (specced) PC for less money than a Mac. Now you can buy a worse Android phone for less money. There's obviously a market for low cost handsets but I don't think anyone can argue that any Android hardware is significantly better than Apple hardware in any way that consumers actually care about.

You see this in, say, the TV market too. If the cheaper but worse hardware argument held then Chinese TVs would kill off higher quality brands. I once heard there are three tiers of TVs: Japanese (top), Korean (middle) and Chinese (bottom).

Chinese TVs are obviously a big market but they aren't the entire market. Nor are Samsung (Korean), Sony or Panasonic going anywhere anytime soon.

But this lead didn't last long, and the picture you describe came about within a few years.

For Android/iPhone: as soon as the separate components become the source of performance (speed, battery life), rather than the intricate integration of them (SoC design, battery, display, OS, apps, appstore, toolchain, etc), then Android will win.

e.g. Currently, an Android with a faster processor is less snappy than an iPhone. But when processors are fast enough, the difference won't be noticeable - even if the iPhone is still faster.

My prediction is that if Apple can keep finding improvements that users care about (e.g. slimness, lightness etc) that offset gains in component performance, and benefit from how exactly it is all integrated, then it will retain leadership. I also think that this lead cannot last forever.

Apple doesn't expect it to - they'll be on to the next cool thing, where the benefits of integration again become crucial (e.g. the next smaller form-factor).

One thing that's different today is that ARM's SoC market itself is vibrant, and so the processor won't stagnate like the 680x0 did - even if Apple's internal team does stagnate, they can just buy another team (like how they got the A5 guys). They can even mix and match different components within the SoC. From what you're saying, this is what makes it different from round one.

I don't know if that passes your test of being better "in any way that consumers actually care about", but I will note that they've been collectively outselling Apple for over a year now.

The analogy between android/iOS and windows/mac I think has to be well-taken, but most discussions (including this one) leave out the most important difference. Windows got to sell a hojillion units by being the best at selling to business. You buy multi-thousand-dollar machines for all your employees because you expect productivity increases; you don't worry too hard about whether they like the machines or not. The decision maker buys on specs and price if it's not just a salesforce versus salesforce game (a likely win for the open platform because there are more players behind it).

The current generation of mobile, however, is a consumer phenomenon. Businesses aren't buying modern smartphones for their employees -- they're hooking the employees' phones into their networks. Adoption is not driven by purchasing managers but by consumers and therefore by user experience, consumer marketing, branding, etc. in addition to specs and price. This puts the open platform with the worse user experience for the average user at a big disadvantage, particularly if the price differential isn't that large in absolute dollars, which it isn't by comparison with the computers of the 90's (the gap between comparably-specced PC's and mac's being enough to buy multiple smartphones).

I don't know that it makes sense to think of any platform being as strong a winner as windows was; the very presence in the market of a company eager to use an operating system as a loss leader means that android will probably never shrink as small as apple did. However, Apple's advantages in design and branding play to the challenges of the mobile market in a way that they simply didn't for PCs. To this, add the scale advantage Apple currently enjoys (as monopsony buyer of flash memory and LCD's) that locks in big profits that competitors can't touch and it seems quite clear which way the playing field is tilted.

tl;dr: windows won by owning the business market; mobile plays to apple's strengths in a way PC's never have.

The whole "PC gaming is dead" adage has been repeated for years now, but is simply not true. These are figures for the US, where console gaming is bigger than everywhere except Japan: http://www.gamesetwatch.com/newzoo_2010spend.jpg

As you can see, traditional non-MMO, non-casual PC gaming adds up to 19%, while all consoles put together (Xbox, PS3, Wii, DS, PSP) add up to 43%, so it is very likely that PC gaming is bigger than any single console. Other places like Europe probably have PC gaming bigger than all consoles combined. And even more importantly, console game sales have declined while PC game sales have jumped up.

edit: of course, I'm biased here -- I think stuff like paying to play peer-to-peer and console makers using that money to pay for timed exclusivity is what will destroy gaming as a whole. I'm also philosophically inclined towards open systems rather than closed ones.

By that argument, Nokia and RIM are going gangbusters in the phone market and have a bright future ahead of them.

Have you heard about Microsoft's plans for the next XBox? Or Sony's next generation PlayStation?

Exactly. Nothing.

Games are pretty profitable on consoles, but makers of these consoles usually lose hundreds of millions of dollars over several years before they can even bring a console to market, and then they need to hope that this console will be successful enough to recoup the R&D.

No wonder even rich and successful companies such as Microsoft and Sony are just a few steps away from giving up on creating consoles completely.

Apple's advantage is design. Google's advantage is search.

As the boundaries of mobile search are pushed (better local, better social, voice search, better x), I believe Google will dominate mobile. Good mobile design will become ubiquitous, but search is a different story.

Google has the best search technology (along with the best infrastructure and data to support it). They also have the best ad network to monetize its benefits.

Design won't become ubiquitous. Where else has this happened in the world? Design is hard. Great design is incredibly difficult to achieve. What Apple's managed to do is create a great design and then make it a priority all the way through the company. They won't ship a product if the design isn't exactly what they want.

Building a search infrastructure is expensive, but relatively trivial.

I disagree completely in your assertion that design will become ubiquitous.

That's one hell of an assertion. As most of the "iPod killers" showed, design isn't something you can just suddenly decide as a company to start doing right.

Good design hasn't become ubiquitous on the desktop. I find it hard to believe mobile is going to magically do the opposite.

So for most people in the world moving from feature phones to Android is going to be a huge leap forward. The difference between iOS & Android is a rounding error in this comparison.

A HTC Wildfire @ USD 250 is equivalent to an iPhone4 @ USD 600 for someone upgrading from a Nokia 1100!!

Android is allowing different manufacturers to offer phones at wildly different form factors & functionalities and most importantly price!

Apple is focused on the niche high end market where they can make maximum margin.

First of all, Android is much harder to develop for than the iPhone. This is because the Android ecosystem is so dispersed. There are many more phones, many more os versions, and many more carriers to support. For a resource-strapped application team, iOS is a simpler choice and a quicker win.

Also, there is, what I would say, less of an app culture amongst Android users than iPhone users. I think this because I develop and work on a team that develops native apps for both platforms as well as a cross platform mobile web app. Our iPhone app does about 50 times better (in each category -- downloads, usage, and revenue) than our Android app without exaggeration. Part of this, to be honest, is our iPhone app is better, and that is partly because of my first point. Even in our mobile web app, though, we see about twice as many iPhone users.

Now, I'm glossing over a whole slew of details here, but the net takeaway for me is, if I were a start-up looking to make a dent in the smartphone market, I'd start with iPhone.

As someone who's published apps on both platforms, I'll disagree with that. For me the occasional extra effort it takes to support multiple resolutions and OS versions is more than made up for by being able to use a semi-modern language. (Preemptive response: Yes, I know Objective-C well, and non-enterprisey Java beats it hands down).

My opinion on why the iPad will suffer the same fate: http://martin.drashkov.com/2011/03/why-android-tablets-will-...