The Orange View (on hiatus) Because Apple is great but it isn't perfect

6Sep/11Off

John Gruber being deliberately obtuse

John Gruber is ranting about iPhone success today, mostly without resorting to truthiness. But the fact that there are just two iPhone models and dozens of Android models seems to confuse him. A consumer wanting to buy an iPhone can buy an iPhone 4 or an iPhone 3GS. A consumer wanting to buy an Android phone can choose from a half dozen models from each of a dozen manufacturers. It's impressive and surprising and a testament to Apple's brilliance that the two iPhone models still sell so well months and years after their initial release. But it still doesn't add up to the number one smartphone platform.

What I find interesting is the tacit admission from Sprint that it is at a competitive disadvantage without the iPhone. Seems obvious to me, of course, and probably to most regular DF readers. But how do the Android supporters who insist that Android is “winning” square that belief with this?

-Daring Fireball, September 6, 2011

Some customers want to buy an iPhone and Sprint can't sell them one. Some customers want to buy an Android phone and Sprint can sell them one. There are in fact far more people choosing to buy Android phones than iPhones. But there are still lots of people buying iPhones. If Sprint could sell Coke but not Pepsi, they'd be losing some business even though Coke is the bigger brand. I mean, come on. Don't be such a jerk.

(All comments on TOV are heavily moderated. Keep it cool.)

 

Posted by Aaron Pressman

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  1. thanks for catching gruber! I have also been reading DF (whenever he makes hackernews that is) only to see if his emotional attachment to his passion (revealing personal insights into the tech industry) would overpower the requirement of remaining objective. i knew it was just a matter of time.

    emotions and politics (especially when the apple crowd refuses to believe that they themselves are part of the marketing strategy, and that most android users just don’t care) always lean to one side. remain vigilant and we will be here to watch it tip over and fall down completely. hats off to microsoft for pushing the envelope (albeit so far only with wishful thinking and PR releases), my prayers go out to sustained competition and evolution for all!

  2. As Gruber has since pointed out, the Coke/Pepsi analogy is poor, because both Coke and Pepsi are in the same business using the same business model; Google and Apple are not. Ultimately, it’s about making money, not about market share. As Gruber notes, Windows had both, but Android has only one, and it’s market share lead is nothing like what Windows had/has over the Mac.

  3. While your points may be well taken, using this line: “If Sprint could sell Coke but not Pepsi, they’d be losing some business even though Coke is the bigger brand” is a fallacy.

    I like a diet coke with my lunch. If I go to a restaurant and they only have diet Pepsi I don’t walk out and go elsewhere. That day I have a diet Pepsi and give the restaurant my business. If I want an iPhone and Sprint doesn’t have one, Sprint will get none of my business for years to come.

    Essentially, one can drink Coke and Pepsi relatively interchangeably, but nobody (except coders & press) has an iPhone and an Android that they use interchangeably.

  4. I’m DF regular, and it is my opinion that Android as a smartphone platform is near peak share, and that the arrival of Windows Mobile 8 will probably seal the deal. I also believe that Windows 8 will impact Android sales much more than it will iOS as the business models are similar excepting the paid licensing of Window 8. This isn’t to suggest that Android won’t compete well against Windows 8, but that Microsoft has an ecosystem, different from Apple’s, that is broad and with deep pockets, Microsoft has the time to gain share.

    Meanwhile, Apple’s world class supply system is cranking out a modestly upgraded iPhone 5 for near term release, and with the continued manufacture of iPhone 4′s, Apple has doubled down on significantly increased production. The ecosystem is broader and deeper than ever, and with the Mac Book Air, Apple has set yet another marker.

    Here’s my speculative takeaway. Apple is going to follow the iPhone 5 with an A6, 4G, NFC upgrade that will be the iPhone 6 next summer. Apple will add an iPad pro model in the spring, again A6, 4G, Retina display and possibly NFC. This is all that is needed to continue to capture the profits at the current levels in the smartphone and iPad markets.

    Unspoken is some disruption that Apple is contemplating and developing as I write, fueled with those massive profits from it’s runner-up market share status.

    But hey, don’t let me stand in the way of a well earned “Android FTW”.

  5. Is there definitive proof that Android is the “number one” smartphone platform? Google’s activation numbers likely include all the dumb phones in the underdeveloped world, and the market share research may or may not include these as well, depending on the data gathered (I don’t have time to dig through it all). And that all makes the assumption that you define “number one” by unit sales. Apple is definitively number one in both customer service and profit by a wide margin. Apple’s brand is stronger and more resilient than ever, while Google is quietly trying to patch the cracks in Android’s. The truth is unit sales is sometimes a misleading metric that can be easily taken out of context.

    I’d argue that “smartphone” isn’t the right way to look at all of this, anyway. Smartphones are now all ultra-mobile computers, and to look at the market in any meaningful way, we need to include ALL ultra-mobile computers. There’s debate as to how exactly you’d define that, but I don’t think a device’s ability to connect people’s voices over telephone switches is particularly relevant any more.

  6. I think your analysis suffers because you lump all phones that use components of the Android open source project together as if they are one platform, when they are not. It is actually more valid to lump all phones that use components of the WebKit open source project together, because at least they run the same apps. But that also tells us nothing about why a carrier who does not carry iPhone is at a competitive disadvantage.

    Generally speaking, users are NOT choosing to buy Android phones. They are choosing to buy Apple phones, or Samsung phones, or Motorola phones, or LG phones, or Nokia phones, or HTC phones, or just choosing whatever phone is cheapest at the carrier store they know best. That one is free? OK.

    What the largest number of users are choosing is iPhone 4. That is why it is the best-selling phone. The second-largest number of users are choosing iPhone 3GS. That is why it is the #2 best-selling phone. AND, the most-profitable user to have under contract is an iPhone 4 users, then iPhone 3GS user. That usually doesn’t match up like that. The most-profitable phone user in the past might have been a high-end BlackBerry that moves only a small number of units and the best-selling phone might have been a RAZR, that sells a ton but only a little profit per user.

    So the fact that Sprint does not carry the #1 and #2 best-selling phones AND the #1 and #2 most profitable per user may be reducing their profits by a large amount, like half. It has nothing at all to do with Android or iOS or Symbian or any kind of technical jargon which is almost completely irrelevant in the phone market. The people who are buying the devices cannot conceive of those issues because they do not have the technical background or even the interest. Platform Wars is an online nerd role-playing game that has nothing to do with how or people buy phones.

    Remember, Sprint sells phones, signs contracts, and sends monthly bills. That is all they know. Platforms? What? They want the 2 best-selling phones for their phone sales, and the 2 most-profitable phones per user for their monthly bills. It is that simple.

    It is profits, not platforms that matter. Platforms are a way that you MIGHT make more profits in the future, or MIGHT NOT. Profits is cash in pocket right now.

    • “Generally speaking, users are NOT choosing to buy Android phones.”

      People actually are *choosing* to buy iPhones. The same way that most Mac users chose to get one over a Windows machine. People set out to get an iPhone, the Carrier or storefront is not relevant. An Android phone, however, is the defacto choice for consumers walking into a Verizon or Sprint store. It’s “I need a car” vs. “I’d really like a BMW”.

  7. What you have to keep in mind though is that at carriers such as AT&T and Verizon which carry both the iPhone and Android, the iPhone is outselling all Android models put together. There is little reason to believe things will be any different at Sprint once it gets the iPhone.

    Yes Android is outselling the iPhone — because it is and it is likely to remain on far more carriers than the iPhone. But in markets where carriers are less relevant or irrelevant — the iPad (tablet) and iPod Touch (PMP) Android is being completely beaten. Android “wins” only if carriers are involved.

  8. How are you defining “choice”?

    According to the latest JD Power 2011 U.S. Wireless Handset Customer Satisfaction Studies[1], Apple topped the smartphone list for the 6th consecutive time. The only other handset maker that was rated above the industry average was HTC.

    Why would the survey respondents want to stick with a brand that they rated as below the industry average? Could it be they did not choose the handset, but the carrier?

    In other words, Sprint feels that it could compete on an equal footing with the other carriers if they had the iPhone. Put another way, Sprint thinks there is a significant number of people who would not consider any carrier that does not have the iPhone.

    [1] http://www.jdpower.com/news/pressRelease.aspx?ID=2011146

  9. Android is an OS and the iPhone is hardware. It’s not useful to compare apples and oranges. Are there more android devices than iOS devices? That’s a more relevant question.

  10. I find it surprising that anyone who’s been following the industry for very long would give very much credence to market share, given how many factors are involved. Regarding Android, market share is a particularly large pill to swallow:

    1. How many Android activations are Google’s Android and how many are forks?
    2. How many Android activations are on non-phones? And if we’re counting non-phones, shouldn’t we count iPods, iPads, and Apple TVs?
    3. How many Android activations are installations on dumb phones?

    The big thing here, though, is that you simply shouldn’t compare iPhone to Android. One’s a phone and one’s an OS. If we could find out how many Android smartphones have been activated running the official Android OS (and not Chinese forks) then we can start drawing conclusions. Until then, it’s all just speculation.

  11. is gruber apple’s propaganda minister?

  12. The only metric that Android is ahead is _smart phone_ OS market share. Which is a ridiculous metric — it’s like saying that a PC manufacturer has the highest share of “mini-tower OS market share”. It’s a bizarre conflagration of OS and device.

    The market share metrics which matter are:
    for OS: number of devices running the OS (iOS wins)
    for hardware: top-selling device (Apple wins)

    And then there’s the whole other issue of the money / profit numbers.

  13. “Platform Wars is an online nerd role-playing game that has nothing to do with how or why people buy phones.”

    I love this quote – all this prattle about which is the better platform and which sells more and you know what most people don’t even care. My mate is a Mac user – he has an iPhone – his wife didn’t like the way they looked so she looked at the other phones in the store and picked the one she liked that was in her price range. I think it runs Android – she doesn’t care what it runs she doesn’t care what version ‘t it is 2.1 or 2.2 or 2.3 or ICS or Pig in the Mud – all she cares is can it make a phone call store some names etc. The only time she might care is when she tries to buy an app and she can’t because she has the wrong version of the OS.

    The point is she didn’t buy Android – she bought a mobile phone. You know the only positive about all this prattle about Android being better than iOS – is most of it is online prattle so no trees where cut down to print or the dribble. :)

  14. Looks like you’ve got a great summary in your comments of the stories that Gruber readers like to tell themselves. You should write an article about that.

    e.g. Android forks account for large amounts of sales, non-phones account for large amounts of sales, bargain basement brand’s you’ve never heard of account for large amounts of sales, Android on dumbphones(?), iPhone outselling all Android phones together on AT&T and Verizon.

    None of these things line up with the numbers (some don’t even make sense), but you’ll find them bouncing constantly around the echo chamber, probably started or amplified by Gruber or Asymco. (There’s still people claiming the A4 was a unique Apple advantage based on Gruber’s nonsense. You simply can’t talk people out of that one. Apple’s magical supply chain advantage seems to be mostly Gruber’s invention too.)

    • “Apple’s magical supply chain advantage seems to be mostly Gruber’s invention too”

      Clearly, as evidenced by the multitude of Android tablets and PC ultrabooks that are able to match Apple’s price/performance points. :-/


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