The Smartphone Wars in 2012: iPhone rises, Android dominates and Windows Phone remains forgotten
Last week, I made my predictions for the “smartphone wars” in 2013. This week, I want to look back. The following are what I consider the most important stories of the smartphone wars in 2012, in order of what I believe is their impact now and into the future of this rapidly growing, evolving industry.
#10 Windows Phone Fail. Only a few short years ago, Windows Mobile was one of the larger smartphone platforms in the world – and many analysts simply assumed Microsoft would dominate “mobile” just as it had come to dominate the desktop. As 2012 comes to a close, Microsoft is working hard just to maintain relevance in the smartphone wars. While there may be nearly 1.25 billion PCs in the world running Windows, Microsoft’s current smartphone platform, Windows Phone, remains stuck below 5% market share, and long-time partners, such as Dell and HP, are either exiting the smartphone business outright or floundering completely. The market has spoken and the market wants iPhone and Android.
#9 Gone Native. One of the biggest tech success stories of the past decade, Facebook, has spent a great deal of time and money on developing a mobile ‘platform’ based on web “standards”. The strategy failed. In 2012, Facebook embraced the native app for both Android and iPhone.
#8 Blackberry on Life Support. Seems like every week we hear of another corporate enterprise or government agency that is ditching Blackberry in favor of Android and iPhone. Yahoo CEO, Marissa Mayer, famously stated:
“We literally are moving the company from BlackBerrys to smartphones. One of the really important things for Yahoo’s strategy moving forward is mobile.”
Once seemingly everywhere, Blackberry’s market share has dropped to 5%. Their new “app phone” friendly Blackberry 10 OS is not even due out till early 2013. While very early reviews look good, it appears to me to be nothing more than the equivalent of a top-of-the-line iPhone or Android – from 2011.
#7 iPhone 5. Apple bowed to market pressure and went big this year with iPhone 5, all while cleverly ensuring compatibility with most of the billions of apps already in use. iPhone 5 is probably the world’s single most popular smartphone and the driving force behind Apple’s monster profits; profits that dwarf the entire rest of the smartphone industry. For those of you yet to try the iPhone 5, find one and pick it up. You will simply be amazed that this device can do so much, so well, and look so good, yet feel as light as a feather.
#6 One billion plus. I don’t believe the size, scope and impact of the smartphone market can be overstated. As of late 2012, there are now more than 1 billion smartphones in use. The number is growing rapidly. Apple’s iOS ecosystem is above 500 million. While Android numbers can be somewhat suspect, the Android totals are nearing 1 billion. Already, we have more smartphones – mobile “personal computers” – than Windows PCs in use. There were mainframes, then mini-computers, then PCs, now smartphones. I suspect that before this decade is out, a minimum 3 billion smartphones will be in active use around the world.
#5 Mobile Advertising Struggles. When was the last time you heard Apple mention iAd? Luckily for Apple, they make their money on hardware. Not so lucky for Google or Facebook, Twitter or the slew of others hoping that we will all click on ads presented on our (relatively) tiny smartphone screens.
Is it any wonder Google refuses to give out actual revenue and profit figures for Android? The smartphone ad business sucks. I suspect it will always suck, and “ads” on the smartphone will evolve into something much different than ads on our PCs. Think of a combination of location-based coupons, points for check-ins, iPhone Passbook rewards, QR codes everywhere, click-to-call via our smartphone maps and more. But display ads? Text links? Those are so 20th century. This year was the year when the moneymen began to grasp the new ad reality.
#4 Adroid, not Google, in China. Android has become the dominant smartphone platform, by market share, in a very short time. It has also become the dominant platform in China. Except…it is Android without Google. Google Search, Google Maps and the host of Google services that Google offers up for free so that they can capture our personal data and sell it to advertisers (and provide us with more ‘relevant answers’) is a failed strategy in the world’s biggest smartphone market. This will have repercussions on Google and the Android ecosystem for years to come. I predict that Google will hand over valuable pieces of itself so that it can get back into China, soon.
#3a Sub-$50. This was the year we were supposed to get a sub-$200 smartphone, thanks to Google’s Android giveaway and what I consider borderline magical low-cost manufacturing. Except, we then got the sub-$100 Android device. Now we are close to the sub-$50 Android device. How? Don’t ask – just be amazed. The computing power once available to a very select few within a very select few corporations in a very select few countries is now rapidly making its way into the hands of everyone, from America to Zimbabwe.
#3b Bigger is Better. While the long history of electronics gadgets has been to go small, this year the reverse became true, and not just with iPhone. Big screens and “phablets” continue to grow in popularity, usability be damned.
#2a Map Wars. Much has already been written about how Apple tossed Google Maps off the iPhone and how Apple absolutely botched the launch of Apple Maps, turning it into an fast-moving PR disaster. Whichever side you are on in this battle, chances are you are on the wrong side. Because Apple did not lose and Google did not lose. What we all learned is that to succeed in the smartphone wars, even Google must be on the iPhone – it is that critical to success. We also learned that Apple is at least years away from catching up to Google on mapping and other cloud-based services – and may never be able to catch up.
The losers were those rooting for other platforms. The “map wars” revealed that Google and Apple dominate the global smartphone market.
#2b Android Engagement. Despite a massive marketshare lead, we are still left wondering what, exactly, Android users are using their Androids for? Web surfing, app usage, photo uploads, ad impressions and numerous other statistics consistently reveal that iPhone users are radically more engaged with their devices – and thus, getting far better value from them.
#1 Samsung versus Apple. Is it any wonder I have predicted that Samsung will acquire Android outright? Fact is, Samsung is the only company making any real money off Android. Samsung has become the world’s top-selling smartphone maker and, unlike virtually every single other Android partner, they make a profit – billions, in fact. Samsung dominates Android in a way that no other company does, except possibly Google itself. In 2012, we transitioned from Apple vs. Android to Apple vs. Samsung. These are the two dominant companies, the only ones making any real money, and the only ones that offer devices customers are demanding for by name