Apple v. Google: Why iPhone can beat Android

Ensuring a deep, deeply satisfying and deeply personal user experience will be critical to the huge battle between Apple and Google for the future of computing, and despite Google's huge Android market share increases, Apple's iOS continues to deliver what consumers want, while Android remains the budget-priced option. In this war, it may be quality, not quantity, which marks the difference between failure and success.

[This story is from the new Apple Holic blog at Computerworld. Subscribe via RSS to make sure you don't miss a beat. Or link up via Twitter on the all-new feed.]

Android-powered devices are now outselling the iPhone in the US for the first time. Will Apple's move to offer music streaming for iPhones help boost sales?

However, with Apple focused on just one model via one US carrier, the Cupertino company's concentration on excellence in the user experience is paying dividends -- iPhone users are far more loyal than those using Android devices.

It would be churlish not to note Android's phenomenonal success. Android smartphone shipments grew 886 percent year-on-year according to the latest Canalys research.

Nokia remains in the lead with 38% market share, shifting 23.8 million smart phones during the quarter, representing growth of 41% on a year ago.

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The smartphone market expanded by 64% annually worldwide in Q2 2010. Apple achieved 61% growth and worldwide market share of 13% in the second quarter.

Google's Microsoft-like strategy of offering its Android mobile OS for free across multiple handset vendors helped generate astonishing growth for that OS.

"Android devices collectively represented a 34% share of the US market in the quarter, and with growth of 851% Android became the largest smart phone platform in the country," Canalys writes.

Canalys' observations were confirmed in a separate study from Nielsen, which released its findings that Android adoption has outpaced that of the iPhone among new smartphone customers in the first half of this year.

"Android has nosed past Apple's iOS in the last quarter to grab a 27% share of those recent smartphone subscribers."

If you include existing US users, Apple still leads the game, with 28% market share in contrast to Android's 13%. RIM holds 35% US share.

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While these figures do confirm the huge challenge presented by Android OS to Apple's mobile phone offering; Apple's strategy has a little wiggle room beyond any base focus on numbers and market share.

That's because Apple's world class talent for innovation and the creation of engaging user experiences will help it retain those customers who do choose an iPhone, while also attractin users from other platforms, including Android.

That's a notion supported by Nielsen's numbers, which note that Android use has soared, but iPhone is still the most desired smartphone as the category grows to take on 25% of the US mobile market.

Loyalty is important and the current data underlines Apple's advantage here.

"Among current subscribers thinking of switching devices, the iPhone remains the most desired phone, finding loyalty with nearly 90% of current iPhone users and enticing healthy slices of Android users (21%) and Blackberry owners (29%) to consider the move to Apple. Android's loyalty among switchers (71%) outperforms Blackberry (42%) where half of its users could potentially chose an iPhone or an Android phone for their next device."

With a multi-carrier, multi-device and multi-manufacturer strategy, can Android OS match iOS in the creation of loyalty-enhancing user experiences?

Before all the Apple-hating and Android-loving guys and gals grow too excited about these stats, it might be worth observing that Nielsen's numbers only include one week of iPhone 4 sales, and also reflect a period in which iPhone sales generally slowed as consumers waited for the iPhone 4 to actually ship.

Consumers are likely to have waited once they got to see the device appear on the Gizmodo website, after that publication somewhat contentiously purchased a stolen prototype unit.

It might be too early to call the Android v. iPhone war. In any case, the battle extends beyond the smartphone across a huge expanse of intelligent mobile devices, including Apple's infernally succesful iPad and its iPod touch.

Apple is likely preparing to unleash a whole new generation of iPod products this autumn, which will further improve its iOS market share.

We may also soon see Apple introduce its cloud-based iTunes solution.

However, this may not be the music and media access everything service we had originally expected, but is likely to be harnessed to Apple's attempt to reinvent television.

iTunes execs are reportedly warning music execs that the cloud-based services might be "limited in scope", Cnet reports.

That report also claims staff recruited on the acquisition of streaming music service, Lala.com, are reportedly focused on video in the cloud, including creation of digital shelves where iTunes users will be able to store their movies on Apple's North Carolina servers.

Google meanwhile is known to be attempting its own vision of television, Google TV, presumably hoping to leverage the huge popularity of its YouTube service.

The focus on content as a weapon for dominance in the future of computing is extremely interesting. Content was not necessarily seen as so acutely critical back in 2001 when iTunes first appeared.

Now it seems impossible to envision a computing world without access to media.

"By 2013, smartphones will grow to represent over 27 per cent of shipments worldwide, with the proportion in some developed markets in Western Europe surpassing 60 per cent and 48 per cent in North America," said senior Canalys analyst Pete Cunningham.

This is not just a battle for the smartphone market. Nor is it solely a point at which we see the evolution of new networks for content distribution, it is in fact a battle for the future of computing.

Microsoft, RIM and HP are all preparing to make their plays as they gradually learn the importance of the battle they are in.

The difference between Google and Apple is that the first focuses on the notion that all content should be held in the cloud, while the second has a more hybrid model, in which the personal marries into the less private world of online cloud-based services.

That's why the iPad has become so popular, as it becomes a person's hub/access point for everything they do.

I am not at all convinced Android offers the same delicate magic.

Meanwhile the struggle continues.

Copyright © 2010 IDG Communications, Inc.

  
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