How Google Android, thanks to Apple’s iPhone, took over mobile world in 2010
This is the third of the four post series analyzing the rise of Android in 2010 and beyond. To read about preconditions that existed before smartphone revolution the iPhone brought about in 2007, check out this post. Here’s why I think it’s wrong to think about iPhone and Android handsets as smartphones, and why we should consider them as a completely new category of mobile device. And this post the 2007-2010 connected mobile computing device revolution that brought Android to the top of the world this year. And here’s the final post in the series, about where I think Android will go in 2011.
The coming convergence of mobility and computing was an obvious thing way back in 2006 and before. Nobody knew exactly how it will come about, but everyone was sure that sooner or later, it will.
The companies at the forefront of this convergence were Nokia and Microsoft – the biggest players in mobile and computing at the time. They were approaching this thing from the opposite sides they new best. Nokia – a mobile phone juggernaut, was making phone smarter by adding various computing and multimedia capabilities to it. Microsoft – the dominant force and monopoly in personal computing, was shrinking personal computer to the small screen, and adding mobile communications capabilities to it. Neither approach was very successful, but nobody had any better ideas, so everyone else was pretty much following Nokia and Microsoft lead. I talked about the pre-2007 state of affairs in mobile/smartphone industry in detail here.
Then, in January 2007, Apple introduced iPhone, and things changed. Compared to the advanced smartphones of the day, iPhone was a really crappy phone. Apart from the display size and internal storage, it’s specs were ridiculously low, and the list of missing features ridiculously long. And it did not matter at all. Because, despite the unfortunate lumping into a smartphone category, iPhone was not a smartphone at all. It was the first true mobile/pocketable device for the connected computing on the go.
Apple creates new mobile computing device/superphone category. Nobody else has a clue
Some people, including me occasionaly and for the lack of better name, call this new generation of mobile computing devices - “superphones”. But that lingering association with the phone is actually counter productive. For the first time in history of mobile/pocketable communication devices, on this new generation of handsets, the “phone” part –calling and texting – truly became just one more application. And not even the most important application for most users, to boot. According to our recent, somewhat limited smartphone use survey results, #1 most popular thing modern smartphone users do on their device – is net browsing, #2 is e-mail. Calling and texting come in only in third position, followed closely by music and social networking. That’s a completely different device use pattern compared to how Nokia N73 or Nokia N95 was used before the iPhone and Google Nexus 1 came along.
When Apple introduced iPhone, every mobile industry incumbent bought a brilliant Steve Jobs misdirection about how this new device is just a “smartphone”. Then they compared iPhone to the products they already had in the market or in the pipeline – things like Nokia N95, or HTC Touch, or LG Prada – and thought “Pfft… This thing doesn’t even have 3G, can’t do MMS, no multitasking, no copy&paste, limited Bluetooth, no GPS, and, for a $600 device, has a ridiculously low resolution camera. No worries here… ”
Steve Ballmer laughed at it and dismissed iPhone as an expensive toy on TV. Nokia went into a frenzied meeting mode to talk about new Apple’s device, and came out with a bunch of power point presentations showing how iPhone is inferior to any Nokia smartphone in every way… And a famous boastful one liner that’s biting them in the arse in current litigation with Apple, about how when Nokia needs it, they “copy with pride“. RIM, apparently, couldn’t even believe that the iPhone was real, and not some sort of publicity stunt by Steve Jobs.
Everyone has decided that the only thing were iPhone is different and, maybe, a bit better then what they have – is the full touch/multi-touch interface. Let’s give our devices bigger screens, add some touch magic over what we already have – and “Voila” – we have an answer to Apple’s iPhone, they thought.
And so it went – WIndows Mobile 6.1 –> HTC Touch Flo –> Windows Mobile 6.5 in Microsoft camp. Samsung’s hastily thrown up F490, Croix interface which later morphed into TouchWiz. LG Prada phone, the S-Class interface on LG Arena. And, of course, Nokia with S60 5th edition. Everyone was just slapping an additional touch layer over their traditional phone offerings, and thinking they have created an alternative to iPhone.
Apple, in the meantime, kept iterating and perfecting the new mobile computing platform they created. An SDK for a browser based apps, already the rage on first gen iPhone, evolved into a very easy to use native app SDK. The new AppStore, combined with already familiar and easy to monetize iTunes media distribution channel, ignited the mobile app craze. In a few years, the general iPhone specs, especially in the “smart” and “phone” parts, more or less caught up with competition.
By the mid 2009, when iPhone 3GS came out, if you could afford a pretty expensive data plan, and/or spend 600 EUR on your next mobile device, for most of you there was no reason to buy anything other then iPhone. If you could get one, that is. Especially in U.S.
Exclusive deals Apple struck with AT&T, and many carriers around the world, created a huge pent up demand for an alternative to iPhone. And in 2009, none of the incumbent mobile phone makers was even close to coming up with one.
By mid 2009 it became clear, that tacking a touch layer on an old smartphone or real time OS just won’t work. While still playing up it’s 6.5 version of Windows Mobile as a significant step forward at Mobile World Congress 2009, Microsoft has already decided to scrap their old mobile OS, and start from a clean sheet, rethinking how true connected mobile computing device should work.
Nokia still tried to prop up their Symbian/S60 5th edition franchise for a while, but 6 months later, facing a dismal failure of Nokia N97, they too came to the conclusion that Symbian OS will have to be rewritten from the ground up for the new world. And turned to Maemo , as their own answer to the changing connected mobile computing device paradigm shift.
Even Samsung and LG more or less abandoned their “touch UI on top of dumbhone OS” strategies, with Samsung starting it’s work on it’s own new generation OS – Bada, and LG losing most of late 2009 early 2010 thinking what to do next.
This total collapse of next generation touch user interface initiatives in the middle of last year, created a huge problem for mobile carriers all around the world, and especially U.S. While in 2009 incumbent mobile vendors finally started to understand that they need to completely rethink how their new connected mobile computing devices should work, none of them would be able to produce anything new until late 2010. Leaving mobile carriers who didn’t get the iPhone to helplessly watch their most lucrative customers move to the iPhone carrying rivals in droves. Faced with the customer exodus, mobile operators were frantically searching for anything that can even remotely be considered an iPhone alternative.
But no one was able to offer anything. No one, except Google.
The start of Android. A little bit of history about Google’s lucky strike #3.
Google must be one of the luckiest companies ever. They now, more or less accidentally, got on and ridden to a hilt, two major shifts in computing. And, similarly, more or less by accident, stumbled on one of the most profitable business models in the world.
Back in the mid 2000s, someone asked Sergey or Larry how Google got where it was, and what advice could he offer to start-up entrepreneurs. His answer was along the lines - “I don’t know , it all happened more or less by accident”. And it actually did.
When Sergey and Larry created their search engine –just as the first Internet bubble started really inflating, nobody cared about search, nobody thought it was important. In the beginning they even went around shopping Google for a million dollars or two. Later the price increased, but they were ready to sell it quite a few times. Fortunately, either nobody was buying, or couldn’t offer the price Google owners thought will be fair.
But, since it was the height of Internet boom #1, Google was able to raise enough money before the crash to perfect their service, and become the default search engine of the Internet. And they also created a hugely successful business model for themselves, by stumbling onto Adwords and later (buying) Adsense. The rest is history, as they say.
Only now we have a third major Google’s hit – Android OS. A combination of some vision, great execution and, again, incredibly lucky timing.
If you read the bits and pieces of Android history that Google let slip out, it goes like this: back in 2002-2003, Sergey and Larry really liked T-Mobile Sidekick - one of the first successful mobile consumer communication devices, optimized for more then just telephony. And saw the writing on the wall – computing is going mobile. Google should start thinking seriously about this space. They even had a friendly chat with Andy Rubin at the time. But nothing much came out of it. Except for contact details exchange.
Mobile data networks were in their infancy back then, and while a rage among digerati and celebrity crowd, Sidekick sales weren’t ramping up fast enough for the taste of the owners/board of Danger Inc., Sidekick creator. They kicked out a co-founder and visionary behind Sidekick – Andy Rubin – out of the CEO spot, and let him drift away from the company. Innovative and fun, Sidekick still didn’t manage to get beyond being T-Mobile’s niche device, and was eventually sold to Microsoft, where it ended it’s life lost in Redmond bureaucracy, as a disastrous KIN youth phone attempt.
In the meantime, Andy Rubin founded a new company – Android Inc., and got busy implementing his vision of the next generation mobile operating system. While looking for additional funding, he shot an e-mail to Larry or Sergey, and was quickly scooped up by Google in 2005. Where he got enough backing and resources to spend next few years ironing out the kinks of the new platform.
But before Apple’s iPhone came along, nothing about the Android indicated that it could become such a major hit. It was one of the many side projects Google has been working on, covering the emerging mobile data communications field just in case. Obviously – it was created as an internet centric device, with tight integration with various Google services, good browser and expandability. But the early prototypes/drawings of possible Android devices show that Google was thinking more along the lines of a better Blackberry, instead of anything like iPhone form factor/design.
Take a look at this official Android launch video from November 2007:
I believe that the device in the first part of the video is the first true Android prototype, and shows were Google was headed before they got wind of upcoming iPhone. An improved Blackberry like device, full QWERTY keyboard, no touch screen, manual key navigation and, of course, excellent Google services integration. And this device looks like it’s actually almost ready to go into mass production.
Luckily for Rubin and Google, either Android was in early enough development stage, so they were able to quickly shift gears on the user interface and form factor, or Google was wise enough to scrap the QWERTY non-touch Android version that was almost ready to ship, and spent another year working with HTC, building a full touch device and OS instead.
Don’t believe me? Then take a good look at the second Android prototype device that appears in the video above. This one already sports iPhonesque full touchscreen, but is still very raw and unfinished. Full touch Android still doesn’t have on screen keyboard, in fact there doesn’t seem to be any keyboard or easy way to enter text at all. The old menu/physical key based navigation is still there, and some of the app demoes (like Quake) seems to be just a video clip running on the device.
One way or another, when Google’s first prototype HTC G1/Dream device running Android 1.0 came out in late 2008, it was definitely aimed at Apple, all Blackberry influences quickly forgotten. And when first officially released, Android wasn’t yet a market ready OS or device. It was extremely buggy, missed a lot of key features and was no good for anyone except tech geeks and early adopters. Andy Rubin himself acknowledged that much when talking about G1 a year later.
Android wouldn’t get to a stable, release ready state for almost a year yet, when Donut 1.6 version shipped. Despite PR partnership in Open Handset Alliance (Android’s umbrella organization) vendors and carriers were rather cool about Android 1.0. Only one – HTC G1/DReam – Android 1.0 device was shipping for the first 6 months. Then anothe HTC phone – Magic – came out, and Samsung got it’s feet wet with original Galaxy i5700. Until the fall of 2009 that was about it for Android.
A perfect storm that brought Android to the top of the world
But late 2008, when Android 1.0 launched, it was still early in the iPhone revolution. 15 months since first iPhones started shipping, 3 months after iPhone 3G and AppStore opened to public, full implications of this new kind of connected mobile computing device weren’t clear, and the imminent failure of all iPhone wannabe’s not apparent yet .
Nokia’s first dib at new touch devices – 5800 XM just showed up, and at the price point it was introduced – it was a rather successful product. Nokia N97, unveiled few months later was still more then 6 months away from hitting the streets, and looked amazing both on paper and in video demoes. Everyone was waiting for Microsoft to finally get something really user friendly with Windows Mobile 6.5, and dumphone giants (LG and Samsung) still had high hopes for their own touch UI efforts. So nobody beyond tech punditry cared much about scrappy buggy Android upstart.
But, as 2009 moved along, with iPhone and mobile app revolution powering ahead at warp speed, the lack of any credible alternative to it became more and more clear. Windows Mobile 6.5 was a bit better then 6.1, but, in the great scheme of things – as crappy substitute for sleek iPhone UX, as WM 6.0. Nokia N97 turned out to be a disaster, and the new Maemo 5/N900, while promising, was still only a geek device and, even officially, at least a year away from being ready for general public. And, beyond some cheap touchphones where user will forgive a lot for a price, Samsung’s Touch Wiz and LG’s S-Class UI’s weren’t able to deliver anything beyond customer frustration.
Well, there was one ray of hope in early 2009 – WebOS. As an OS – it really looked as a very credible alternative to iPhone. But Palm was too week a player to deliver on WebOS promise, and it’s deal with equally weak Sprint sealed WebOS fate.
In the meantime, while every other promising iPhone alternative fell by the wayside, Google was able to get Android ready for the wider market. Android 1.6 was still ways worse then iPhone, but it was also way better then anything else available to mobile vendors and networks alike. Then the second generation of Android arrived, first as Android 2.0 Verizon Motorola Droid exclusive in November 2009, and then, from 2.1 in early 2010 – available to everyone else. Finally, with second generation Android, carriers and mobile vendors had a really good enough alternative to iPhone.
It was a perfect timing and a perfect storm for Android. Apple have already created the market for true mobile computing devices, and trained the world at large what they can and should do. And, with every competing effort in ruins, Google Android became the only alternative to iPhone. Those who really wanted an iPhone – they went for it. But for those who resented overpriced iPhone plans, or just couldn’t get it due to carrier exclusivity, or didn’t want to move to the Apple world – for all of them, Android device became the only alternative.
And remained the only credible iPhone alternative for almost a year, which is an eternity in mobile industry.
No wonder that with original Droid, Verizon started spending hundreds of millions promoting it’s Google phones. Other U.S. carriers followed suit as soon as they were able to get their hands on their own Android 2 devices, mobile operators around the world got on board quickly too. Seeing this huge interest, and after a gentle Nexus One kick in the behind, mobile phone vendors got on Android bandwagon too, and started releasing Android handsets that were powerful and good enough true mobile computing devices for almost anyone.
In 8 months – from May 2009 to February 2010 – Android device activations doubled from 30 000 a day to 60 000 a day. Then they almost tripled to 160K a day in the next 4 months (Feb.- June 2010), and almost doubled again – to 300K activations a day in the next 5 months (June-Dec. 2010).
So here we are, as 2010 rolls to a close, Android seems unstoppable. With some pundits just noticing that some mobile chip vendors are working on low end Android optimized chipsets that will soon make sub $100 Android phones possible, and making predictions like
“… if you thought Android going from 30,000 activations a day to 300,000 activations/day was impressive, 2011 might be an even bigger growth year for Android.”
And half of U.S. tech pundits mindlessly repeating the line.
Is Android growth only accelerating, and will 2011 be even a better year for it? Will Android take over the mobile/smartphone completely next year? Not really. I think that the best days of Android growth is already behind it.
To learn why, see my next post with Android 2011 growth forecasts.