—

Nokia, the world’s leader in total mobile phone sales seems to be having new problems deciding on its OS strategy. There were some murmurings about embracing Android last summer, but Nokia seems to have decided against it. Stefan Constantinescu had this to say about the results of Nokia World 2009:

“The [new] software, Maemo 5, is a pain in the ass for developers since Nokia has admitted in public that Maemo 6 will come out in a year and it will break compatibility due to a switch from the GNOME environment to Qt. The browser, built on top of Mozilla technology, the same code that powers Firefox, is a step away from WebKit, the browser engine that powers Safari in the iPhone, the browser in Symbian, the browser in Nokia’s dumbphone OS known as S40, the browser in Android and soon the browser in RIM BlackBerry devices. Why is Nokia supporting something contrary to what the industry has already accepted as best in class? What’s the strategy?”

Technical mistakes and internal politics can sink a company in an intense competitive environment. Mr. Constantinescu didn’t perceive a coherent strategy. There may not be one. http://bit.ly/8cJXi5

Google’s primary and most significant contribution won’t be any major innovation in the core Android platform but rather in its own bundled apps, where Google plans to earn its revenues from via, to put it bluntly, adware and spyware. http://bit.ly/5UuZRU

If Moto sold 100k units on the opening weekend (2.5 days), we know that they got 10% of opening weekend sales for both iPhone 3G and 3G(S).

But what should trouble those who care is that iPhone outsold Droid on the very same Droid opening weekend.

Consider that last quarter 7.4 million iPhones were sold. If the sales rate is preserved this quarter (although, by all estimates, it should be higher) then Apple is selling, on average, 81k units *every day*. I’d venture to say they are actually selling more on the weekend so easily over 100k per day, making iPhone sales during the Droid opening weekend at least 200k and quite possibly 300k.

Within 2 months, the Droid will be forgotten as was the Pre. http://bit.ly/4qnfHj

The real news is some new “proprietary” OS is to take a majority share of the portfolio moving Android out of the picture gradually after 2011.

You will infer from my previous comments that the reason any deep pocketed vendor would shun Android is the same as why they would shun WinMo: no “control” over the whole product and hence no differentiation vis-a-vis an integrated competitor.

The Android devotees would then have to depend on their platform reaching critical mass without Nokia, Samsung, Apple, Palm and RIM, all of which will be shipping integrated products. LG got bought off by Microsoft and they will wallow in the mire.

Where does that leave Android? Moto and SE? They barely make up 10% of all devices and negligible smartphone share today and both are borderline going concerns.

That just leaves HTC, which shipped 80% of all WinMo. My bet is that they will ship 80% of Android, but that still tops them out at 10% share WW.

Looking at the platform game top-down and bottom-up you get the same story.

Three months after that 100 millionth iPod, Apple sold the first iPhone.

My prediction is that sometime next year Apple will announce the 100 millionth iPhone OS device sold, making the iPhone the fastest selling platform in history. The iPhone will have been on the market for three years.

As of now there are at least 57 million iPhone/iPod touch devices in the field. This season there are likely to be over 15 million more sold. The bar to clear is therefore 28 million next year which seems achievable by Q3.

It goes without saying that 100 million contiguously addressable devices makes it the largest such device platform, but it may make it so by an order of magnitude.

Google does not support installing apps to the SD card (and likely never will), so developers are limited in what they can create.

This is another one of those things where I simply don’t understand why Motorola doesn’t follow Apple’s lead and provide ample built-in storage rather than relying on removable SD cards. I just checked, and I have about 1.8 gigabytes of apps installed on my iPhone. Many of the top iPhone games weigh in at 50 or even 100 MB each. My two biggest games alone (Texas Hold’em and Need for Speed Undercover) weigh in at just over 256 MB combined. Just two games.

Did Motorola even look at the size of popular apps in the App Store before releasing this?

In my way of speaking, openness is semantically equivalent to “modular” and that is in contrast to “integrated”. Integrated is the only way to develop systems when they are not good enough. Modular is the only way to cheapen systems when they are more than good enough. Figure out where the technology is on the “good enough” trajectory and pick the winners and losers by the level of integration. It’s that simple.

On the other point of device vendors backing a standard. That is such a red herring. There were hundreds of companies backing Windows Mobile for half a decade. At it made all the promises that Android is making now (non-phone devices, millions of developers, source code, Intel backing, contractors ready to build to order, you name it.) The freetard counter to this is (I’m guessing) that Microsoft could not execute! Check it out: Google hired swathes of WinMo people into their mobile efforts. It’s the same crowd. Is execution some sort of magic pixie dust only available to Google?

The new “mobile computing” use case that smartphones try to serve is not going to be satisfied with solutions that are built from modular components.  The reason is simple: as the solutions are not good enough (because it’s early days), they need to be improved.  If they are to be improved, competitive pressure will compel those who try to do so as rapidly as possible.  The fastest climb up the trajectory of performance will get the bulk of the benefits.  Modular implementations are simply not fast enough in cycle time of iteration in comparison to the integrated approaches.

This is why Apple will grow faster than Google, Nokia and Windows Mobile.

How does this relate to the ecosystem?

Many have been commenting that Google’s (or Nokia’s or Microsoft’s) ecosystems are more “open” or “flexible” with respect to Apple’s.  And that in the long run that is the right architecture.  That may be, however implementing loose ecosystems coupled loosely to modular devices and operating systems and services as a whole will not be competitive.  They will be too late, too slow and too hard to use.  They will be awkward to position and the benefits will be impossible to explain to end users.  They will be sold through a distribution channel that is too long and with poor information feedback.  Too many “vested” interests will dilute the product’s reason for being.  The pricing of the integrated player will cause poor economies for the modular cohort. I could go on but it suffices to say that the modular approach will fail to be competitive.

During the next 5 years at least, Apple has a clear run.  The counter-argument to the architects is that of the accountants: the amount of money that Apple will make from the iPhone will crush the elegant freetards.  The enormous profit gained by offering the best solution is staggering–at least an order of magnitude and maybe two–relative to the also-rans.

Footnote: the arguments for the imminent explosion of Android are all based on a forecast from Ken Dulaney at Gartner. It was also Ken who in 2004 forecast that Windows Mobile will dominate business devices and that RIM would never gain share leadership.  Here is why he is wrong now as he was wrong then:

Ken and his peer group are implicitly and explicitly owned by the customers he tries to serve.  What I mean is that Ken is hired by those who have the money but not the competence to think by themselves.  His clients are the incumbent device vendors who are signaling to him that they will increasingly license Android (as they signaled that they will license WinMo before).  He adds up all the signals he gets and multiples by random numbers to get a forecast.  It’s a supply-side forecast assuming “Porter’s five forces” is still at work.  In that sense, he is selling back to his clients what they’ve already told him.  He is hired to validate their assumptions and that’s what he delivers.  Rinse, repeat.