Woz: Android will Dominate iPhone

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Despite the iPhone’s popularity and success, Google’s Android platform will eventually control the larger slice of the smartphone market, according to Apple co-founder Steve Wozniak. The Woz shared that opinion with The Netherlands’ De Telegraaf.

Android-based phones, according to Woz, sport more features that the iPhone and there are more choices for consumers, too. Eventually Android phone quality and user satisfaction will be on par with iOS, he predicts.

 

Woz. He thinks hard.
Apple co-founder Steve Wozniak

While Woz sees Android as the eventual marketshare leader, he thinks Apple still has the better product in the iPhone. “[It] has very few weak points,” he said. “There aren’t any real complaints and problems. In terms of quality, the iPhone is leading.”

The iPhone’s popularity has earned it a substantial portion of the smartphone market, but in many regions its availability on multiple carriers is limited compared to Android-based smartphones. Since any phone maker can use Google’s Android platform, the number of companies that can produce potential iPhone competitors is continuing to climb, bumping up the number of smartphones hitting store shelves, too.

Android’s promising future is balanced by the current state of mobile phone maker Nokia. It’s “the brand from a previous generation,” Woz said.

Woz also shared that the iPhone wasn’t Apple’s first mobile phone project. The company developed a phone that Woz said was ahead of its time in 2004 with a well known Japanese company, and the project turned out well.

That phone, however, never hit store shelves because it wasn’t everything the company thought it could be. Instead, Apple “wanted something that could amaze the world,” Woz said.

Comments

MOSiX Man

No disrespect to the Woz - he did help launch the personal computer revolution, and is due some major cudos there. However, since leaving Apple, the Woz hasn’t shown any great aptitude for advancing technology or for business. From what I’ve read over the years, he’s been involved in a number of business ventures, none of which have been wildly successful. Also, what cool technological product has he come up with since the Apple II? Besides, between the two of them, Jobs was always the one with the eye for business. So, why is it important what the Woz thinks about the iPhone vs. Android phones?

Now, having said that, is he wrong? No, I think he’s right, but it’s not a hard assumption to make. Apple’s goal has never been to have the greatest number of widgets in a market, so I’m sure that even Steve Jobs would privately admit that Android phones will eventually outsell iPhones. To do that, though, Android will have to exist on hardware from numerous manufacturers - who will want control over the feature set for the phones they make, as well as be on the networks of numerous wireless carriers - who will want control over the feature set for the phones they carry. I.e., some Android phones may someday come close to matching the quality user experience of the iPhone, but most will definitely not.

I think that once the iPhone appears on Verizon (and other US wireless carriers), there will be a noticeable dip in the number of Android phones being sold. Also, once the AppleTV can run the same apps as the iPhone (even if they’re AppleTV versions), I see even more people being interested in the iPhone. (I also see that being the point when the AppleTV moves from an Apple hobby to a legit Apple product.

But, hey, what do I know? I never even came up with the Apple II. wink

Bosco (Brad Hutchings)

Woz is a regular Nostradamus. Android has already passed iPhone in sales, by a 3:2 margin. I think the key to Android domination will be the rollout of inexpensive Bluetooth speakers and automotive head units. Those will make the iPod dock obsolete and eliminate the last incentive for users to tie themselves to the iPod stack.

Bosco (Brad Hutchings)

Just saw this. Woz might actually be on to a trend. Android actually matched iOS in ad impressions on a major ad network this month. That’s really amazing considering ad impressions is a measure of installed active user base rather than sales.

RonMacGuy

Funny how people get confused over what Apple’s focus is.  From Gigaom.com:

Apple raked in 48 percent of the worldwide mobile market?s earnings before interest and taxes in the second quarter of 2010, mocking the relevance of market share figures, where it?s still a relatively small player. The Cupertino-based company achieved this feat with roughly 3 percent of the overall mobile sales in the quarter, further emphasizing its traditional approach of profitability over units sold.

Profitability over units sold.  Hmm.  A shareholder focus.  I guess that’s why Apple stock is performing so well.

And when the AT&T exclusivity agreement is over, then we’ll see what happens…

Bosco (Brad Hutchings)

Profitability over market share. The profits come out of consumer pockets, indicating that consumers are not getting the value they are with Android handsets.

Look at how the PC industry unrolled. It’s been going full steam mainstream for about 20 years now. And over those 20 years, even though Apple had strong profit share early on, and has disproportionate profit share now, they don’t have such a great share over the span. Same will play out with mobile form factors. Apple has profit share early by first mover advantage, but fails to secure the market share it could to ensure profits over the long term. And in fact, to reemerge from the niche of people who are Apple religious zealots, it will have to compete on price with players who are happy to get modest profits from market share power and who deliver products that are more than good enough.

jfbiii

The profits come out of consumer pockets, indicating that consumers are not getting the value they are with Android handsets.

That is complete and utter bullshit. It is in fact the strongest indication that consumers place an extremely HIGH value on the iPhone/iOS ownership experience.

Michael Stewart Anderson

Except that he didn’t say what is being reported. I wonder if the title of this posting will get modified soon to reflect the fact that this was somewhat fabricated. People need to be careful what they read.

http://www.engadget.com/2010/11/18/exclusive-woz-misquoted-almost-every-app-that-i-have-is-bette/

RonMacGuy

but fails to secure the market share it could to ensure profits over the long term

Then how do you explain the iPod?

RonMacGuy

Not everything has to compete on price.  Mercedes does not compete on price.  Bose does not compete on price.  Sony to a large extent does not compete on price.  Many products command a premium price and provide premium returns, and continue to do so over the long haul.

Bosco (Brad Hutchings)

Then how do you explain the iPod?

I wasn’t talking about the iPod? Woz wasn’t talking about the iPod? I was talking about personal computers and comparing to smart phones, much as Woz was.

Bosco (Brad Hutchings)

Many products command a premium price and provide premium returns, and continue to do so over the long haul.

Yes, but what premium can computing products really offer and what is that worth? What Apple should have learned is that whatever premium it thought it had in “ease of use” or “design” was lost to the network effects of Wintel PCs, from ever increasing processing speeds, to multiple form factors of logic boards to software to evolving and emerging standards.

The comparative market share trend between iPhone and Android in an expanding market is not indicative of a failure of execution by Apple, whether that be AT&T exclusivity or not being able to make iPhones fast enough. It’s indicative of a fundamental flaw of the model that routes too much decision making through one company and one man, without benefit of competitive balance or cooperative economies of scale. Apple fans have to recognize that you’ve been lapped, quickly and badly. That’s what Apple fans are in complete denial about, and why they will quickly be in their 10% niche while the other 90% get better value from a more competitive ecosystem.

Michael

I don’t think apple needs to take any lessons on how best to run their business from the folks on this forum. Their record speaks for itself.

They have built themselves into the premium consumer tech company on the planet. Haggling over opinions of what they have done wrong ignores the fact that they are completely dominant. They make the market.

I think it is simply fantasy to say that the incomparable leadership of Apple with Steve Jobs at the helm is somehow a “flawed model”. Preposterous or Ignorant of history of Apple since Steve Jobs regained the helm of the ship are thoughts that pop into my mind when I hear such shineola.

Great leaders make bold decisions. Vision and shrewd calculation by one person can often trump decision making by committee. In most companies, it is the vision and drive of an individual that drives profitability.

Committees generate paperwork, leaders make decisions.

“competative balance”? “cooperative economies of scale?” What business school did you come from?

20 disparate companies making android phones may add up to greater market share, but apple is still the 800 lb gorilla. They still are dictating the market for smart phones.

But even more than simply dictating the markets, they are making the future markets. iPhones may be the current market, but it won’t be the future. When the new markets emerge, apple invariably won’t be the first, but everyone will be watching to see what their solution is because it will become the standard to measure all other products against. That is dominance.

I love the android phones. They are great and I like that they are linux based and that they are a more open platform. But there is not really much evidence that apple iphone is declining to a 10 percent market share and android is going to be a 90 percent market share. Apple continues to gain market share despite being limited to one carrier. Soon there will be more than one carrier. During the next year according to Business Insider the iPhone market share will double in the next 12 months.

I suppose a more important question is, how are all of these companies faring. Apple selling 30 or 40 million phones a year to 40 or 50 million android phones split 12 or so different ways means that Apples position is enviable. Apple earns far more per unit than any of the android based producers.

Far from being “lapped” Apple continues to grow its total market share.

Apple is currently the 4th largest cell manufacturer despite selling basically 1 type of phone. Pretty good economy of scale. Apple has record profits, 40 billion in cash reserves, is expanding market share in PC’s, and creating a whole new profitable market with tablets. They are generating huge revenues thru advertising and thru their iTunes store.

One might be inclined to think they are doing a few things right and that they understand capitalism and the market system better than almost all of their competitors. They certainly have a better understanding than flunkies on this forum.

I would suggest that certain folks need to filter their thoughts thru a logical fallacy scanner and to get more knowledge in general.

As Lou Holtz said tonite at 1/2 time on ESPN. “It is better to keep your mouth shut and have people think you are an idiot than to open your mouth and confirm you are an idiot”

Michael

I think the key to Android domination will be the rollout of inexpensive Bluetooth speakers and automotive head units. Those will make the iPod dock obsolete and eliminate the last incentive for users to tie themselves to the iPod stack.

You can already stream iPhone stuff over bluetooth for more than a year. If you are counting on this being key to Android domination you are too late. I have a nice cheap unit in my car that will do this.

http://www.tuaw.com/2009/04/02/streaming-iphone-via-bluetooth-in-the-car/

I suspect you might be able to do this on androids with bluetooth already as well.

Bosco (Brad Hutchings)

Apple continues to gain market share despite being limited to one carrier.

This is incorrect. iPhone’s share of sales is basically stagnant or slightly declining in the past two quarters while Android is eating up RIM and Nokia. Ad networks are starting to show Android surpassing iOS, which indicates that active device usage of iOS going back more than a year has actually been eclipsed by about a year’s worth of Android devices.

As to the Lou Holtz quote. Call me an idiot now if you like. In 6 months the ratio of Android to iPhone will be much higher than 3:2. I won’t call you an idiot then. I’ll just point to the scoreboard and act like I’ve been here before (to quote a much greater coach, John McKay).

Bosco (Brad Hutchings)

You can already stream iPhone stuff over bluetooth for more than a year. If you are counting on this being key to Android domination you are too late. I have a nice cheap unit in my car that will do this.

Let me elaborate. A key advantage for iPhone was the existing iPod connector ecosystem. If you have an iPod speaker 3 years ago or an iPod compatible head unit, you had a good chance of having an accessory that was already compatible with your new iPhone. Walk into Target and you still see a whole range of iPod/iPhone compatible speakers and clocks with docks. These accessories are not Android compatible. As the industry moves away from iPod exclusive docks and toward Bluetooth, that takes away an advantage of having an iPod/iPhone.

Additionally, more cars are shipping with Bluetooth stereo capability, as some cars continue to ship with iPod compatibility, so that new car owners don’t have to go to aftermarket stereos to connect their Bluetooth devices.

Michael

Firstly, I apologize for the Lou Holtz quote. The quote is funny, but not appropriate to conversation here. I really didn’t mean to disparage you or call you an idiot. I see easily now that putting the quote was just wrong on my part.

This is incorrect. iPhone?s share of sales is basically stagnant or slightly declining in the past two quarters while Android is eating up RIM and Nokia. Ad networks are starting to show Android surpassing iOS, which indicates that active device usage of iOS going back more than a year has actually been eclipsed by about a year?s worth of Android devices.

RE: a decline?
Quarterly figures are one thing… they fluctuate. Market share fluctuates quarter to quarter based on multiple factors which don’t necessarily indicate long term trends. What is more important are long term stable revenue stream. Actual sales numbers. There is no doubt Android based phones are experiencing explosive growth with lots of 2 for 1 deals and lots of new models released. Androids are filling a hole Apple has yet to cover.

Adding another carrier or 2 will dramatically increase iPhone sales and lead to a slight market share increase.

Apple sold 13.5 million units in the 3rd quarter 2010 vs
7 million units 3rd quarter 2009. Apples total market share was 2.3% of total cell phone sales worldwide Q3 2009. This year it climbed to 3.2%. Both are trending upward. Neither phone market share nor number of phones sold is stagnant.

You are likely right that Android’s market share will be bigger and I think that Android market share may even be double that of iOS eventually, but that ratio will be considerably less than 90% Android 10% iOS. (you didn’t really suggest android would dominate to such a degree, but suggested that was the direction we are heading. I don’t think we will ever get to 90% market saturation by any one company as happened with computers; too many factors today)

Apples product strategy now is quite a bit different than it was in the 1980’s. It is more diverse, more forward thinking, and there is nothing really tangible to suggest that we are experiencing a rehash of the lack of vision Apple had during the 80’s.

Remember that Apple was told that their only real path was to sell their OS to everyone and try to compete with Microsoft. Today Apple is the worlds largest tech company having passed Microsoft. They have 40 billion on hand Cash and can buy up all the new technology they think will help them maintain market penetration and profitability. And their business model continues to diversify its revenue flow. Apples strategy has proven sound.
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I agree that Android will become the most dominant smart phone platform in time. But survival of the businesses that make Android phones will be highly questionable in a competitive market where profit margins will remain lean. Not even IBM could survive the competition in the PC market. So there will continue to be turnover which will hinder further Android growth at some point.

Android is in an explosive growth pattern as smartphones become the new mobile market. There is a lot of room for growth and a lot of room for profit making. Cut rate hardware with a free OS will compete well. Cheap will always trump expensive in a new market. Once the market is saturated things will consolidate and Android market share will become what it will until the next big thing. But there will be an Android chunk, an iPhone chunk, and perhaps others. The iPhone chunk will continue to be highly profitable, the others not quite so much.

Meanwhile, Apple will continue to innovate in ways none of the companies struggling to compete over the hardware scraps of the Android hardware market can. None of those companies will sell as many phones. None of those companies will make large profits or define the market.

Another potential problem is that companies will begin modifying the Android OS and standardization will be lost. Right now hardware makers don’t have control of the OS. If they do make changes they risk breaking things so they are defacto dependent upon Google. Providers are already introducing some of this modification for their own reasons. There is considerable risk of market fragmentation. Just look at Linux. This sort of ‘choice’ is often uncomfortable to lots of folks.
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Bottom Line:
Apple will continue to produce excellent phones that a large number of people will love. iPhones will continue to be a gold standard. Apple will continue to keep pace with the hardware arms race and cannabalize all of the most useful features and software from Android devices. At some point Apple will develop some hardware that trumps the current paradigm and everyone will scramble to match it just as they are with the Tablet market.

This year Apple will make nearly 50 million iPhones, next year they will make nearly 100 million perhaps and so on?.

Bosco (Brad Hutchings)

Adding another carrier or 2 will dramatically increase iPhone sales and lead to a slight market share increase.

That’s worth a public bet. Stakes can’t be money, but can be something that acknowledges the humility of the loser.

I would phrase the bet this way: iPhone unit sales share in the US smartphone market will decline in Q4 2010, Q1 2011, Q2 2011, and Q3 2011, with Android unit sales share increasing in each of the quarters.

The issue is more fundamental than product quality, production, or distribution. It’s evolution vs. intelligent design, and Apple is on the wrong side of that split. They didn’t have to be, and could easily have thwarted the Android surge by taking the tried and true open approach.

Michael Anderson

You are talking about something that doesn’t really affect Apple in an adverse way. Androids 800% growth rate due to flooding the market with cheap units at low to no profit doesnt help Androids producers.

You are using statistics and not real numbers. Statistics can be used to slant almost anything.

Android based phones could outsell Apple 3 or 4 to one and in some statistics it could look like Apple is going backwards, but the real numbers will be Apple selling 100 million phones next year and 30 million tablets. Way more than this year and for a gigantic profit that allows them to do things which will continue their revenue flow.

Overall world market share of the iPhone market will continue to rise. This is simple mathematics. Last year 2.3%. This year 3.2%. Next year 6%. The following year closer to 10%. Cherry picking numbers to demonstrate statistical tricks is basically propaganda, which is fine, but the markets have been firmly behind Apples approach since the revenue flow is consistent.

As far as the US market and indeed the world markets, the numbers of iPhones sold year to year will continue to rise although not as fast as Android based machines. This will continue until the market reaches its apex. Since smartphones continue to be a relatively new niche for cell phones, this process may take another 5 years or so. Emerging markets are a new area where Apple has an opportunity to try new marketing strategies and what will happen there is yet to be seen, but I believe Apples products will compete well but still lag behind the logjam of Android products.

The fact is the number of iPhones sold for a nice profit will continue to rise until the market is tapped out. Kind of like iPods. Then things change. New innovation must occur to ensure high revenue sources. But meanwhile Apple will continue to make more and more money and continue to grow as a company.

Android trajectory will rise faster. That is destiny. 2% of the market this year. 6% next year perhaps 12-14% the following year. Androids may eventually secure 40% or more of the total market. Apple will probably settle in somewhere between 12-16% of the market. But that is ok. Apples market and user base will be as it is now. Somewhat exclusive and the coolness factor will be something akin to having a Porsche vs a Chevy. Porsche isn’t failing because Chevy makes more cars and more people buy them. Apple just has the sweet spot in the market where profits are high. Android based phones and tablets will not really do much to unseat Apple from this area of the market as far as I can see.

My point is Apple isn’t interested in trying to compete for the low hanging fruit and never has. They will not stretch themselves to try to out produce cheap Android machines so they can dominate the market numbers.

Apple’s game plan is what it has been. Put out great products. Constantly push the envelope. Keep your profit margin high.

Apples approach will continue to see amazing profitability for the company. Open source has yet really get any true monetary returns. It is great and I love using linux and look forward to having an android to tinker with at some point, but I think your logic doesn’t hold up.

btw Evolution and Intelligent design are not mutually exclusive concepts. If the god which created the universe were smart why not use intelligent evolution to achieve ones goals. Nobody can really deign to understand the masterplan since nobody has more than a sand grits intelligence in this universe as far as I can see. We don’t have knowledge or insight since we are stuck on a planet with only one angle on the universe.

Bosco (Brad Hutchings)

@Michael: Market share over the long haul (10 - 20 years) is extremely important. Apple always sold enough computers in the 1990s to mid 2000s to be a viable business. While it was a leader in “design”, it was a continual follower running in emergency mode in technology. That meant less stuff that worked with Macs, and where it existed, it cost more.

On intelligent design vs. evolution… My money is 100% on evolution with no central planner. Psychologically, it has always appeared to me that people who need a designer (or some central control) fail to see or recognize “peer to peer” mechanisms that define and determine the actual behavior of actual systems. Whether its God or Apple or Bush/Obama, there is far too much attribution of state of things to a central plan, and far too much ceding of individual control to the planners. In short, as a system, the Android ecosystem will prove more efficient and more innovative than iOS, just as the Wintel ecosystem has been compared to Mac. If you doubt that, where are the $300 Mac netbooks?

Michael Anderson

In the 80’s and 90’s Microsoft dominated based upon certain strategic concepts that turned out to work better in the market at the time. Apple did stuggle for various reasons, the largest of which was a complete lack of leadership and innovation. Apples products were simply another form of PC that wasn’t compatible with the bulk of the market. Functionality was much more compartmentalized as well leading to companies rigidly adhering to one monopolistic system.

Nobody at Apple during that time had the long term thinking ability of Steve Jobs. But things quickly turned around with him once more at the helm.

The paradigm from that era has shifted partly due to Apples continuing innovation. Soon PC’s in general will be relegated to history.

Wintels machines were able to leverage dominance not because of an open rudderless approaches. Their rise was due to shrewd calculation by windows and intel applying their central planning to assure greater market dominance over their competition.

Even now Microsoft/Intel continues to dominate the PC market, yet apple has eclipsed MS as a tech company. Their profit margin is greater despite Microsoft’s continued “Dominance”. The direction of the market is not in Microsofts favor so they are scrambling to catch up.

Comparing Microsoft to Apple is like arguing central design vs central design. So I think your argument that a decentralized system winning out versus a planned one does not hold water in this instance. Closed systems have certain advantages that Apple continues to exploit. The companies that only made the hardware have largely eaten each other alive. The bulk of the hardware makers have gone out of business despite the massive advantage in market share. But Apple with a bunch of terrible mistakes, even in the late nineties and only 2% market share still had 15 billion cash on hand. They just needed better long term planning.

In your current comparison of Android or iOS you are also comparing a centralized structure Google with another centralized structure Apple. None of these systems you are talking about is anything other than centralized and planned.

PC’s had an open architecture and yet there are always a standard. Androids have an open architecture and yet there is a standard. Things are not nearly as chaotic and free form as you seem to be implying.

The only thing different is that Apple maintains some control over its hardware, but it still uses industry standard parts.

By maintaining control over its software and hardware Apple is better able to prevent problems. This works for most people since there is less likelihood of malicious things happening. It is harder to exploit a closed system. Android users will find this out as people begin to exploit their more open system as is already happening.

As to the $300 dollar netbook, you continue to fail to understand that Apple only wants to do business where it can make profits. The goal is that. Apple will never play the lowball game. They can’t be a stong company by trying to do so.

Iphones and Androids will be irrelevant 10-20 years from now. Apple will have the money to watch the way the markets are going and buy up technology to produce a product to dominate that market in ways other companies will be unable to. 10 years from now desktop PC’s will unlikely to be a factor. Apples long term plan is to exploit future innovation so they can make more money.

Remember Apple has “evolved” it’s technology also. Apple although it has closed systems is able to evolve, re-invent,  and dominate a market. It will continue to do so. Monoculture is often able to react more quickly than multiculture which can’t seem to come to concensus.

iPhone is the product that they are using currently. iPods before it.

I think you are too much enamored with the Android vs iPhone determining Apples fate somehow, but this couldn’t be further from the truth. Apple doesn’t sink or swim with the iPhone just as it didn’t sink or swim with the PC.

Michael Anderson

BTW I love Peer to peer mechanisms. They are awesome, but whatever they create will be exploited in the market by apple and others.
I first got into Linux in 1996 with Slackware and continue to use Linux even now.
I remember talk of Linux dominating the PC market, that linux would win out over a centralized system. It didn’t. I love OSS and continue to use it mostly today. But the Linux PC’s account for only about 1% of the market share I believe. Closed centralized systems have continued to dominate the PC market. They will also dictate a large part of the future product cycle.

Linux/Unix is versatile and proved more worthwhile than other OS’s. But still it is only a tool or mechanism. You could have 300 million Android phones, but if they veered too far from the overlord Google system, users wouldn’t be able to use them and everything would break. Google acts as a centralizer and guides development whatever you think.
Although google is a great company and very innovative, I see no evidence that Google central planning will be superior to Apple’s in the near future.

Apple just has more experience with integration of hardware and software at this point.

Michael Anderson

——————
BTW I love Peer to peer mechanisms. They are awesome, but whatever they create will be exploited in the market by apple and others.
I first got into Linux in 1996 with Slackware and continue to use Linux even now.
I remember talk of Linux dominating the PC market, that linux would win out over a centralized system. It didn’t. I love OSS and continue to use it mostly today. But the Linux PC’s account for only about 1% of the market share I believe. Closed centralized systems have continued to dominate the PC market. They will also dictate a large part of the future product cycle.

Linux/Unix is versatile and proved more worthwhile than other OS’s. But still it is only a tool or mechanism. You could have 300 million Android phones, but if they veered too far from the overlord Google system, users wouldn’t be able to use them and everything would break. Google acts as a centralizer and guides development whatever you think.
Although google is a great company and very innovative, I see no evidence that Google central planning will be superior to Apple’s in the near future.

Apple just has more experience with integration of hardware and software at this point.

RonMacGuy

Firstly, I apologize for the Lou Holtz quote.

Michael, you need not apologize for the Holtz quote.  Others use the same tactics all the time - passive aggressive references that don’t directly insult you but are obviously intended to.  Not your fault they took it as you calling them an idiot.  You did not; you simply referenced a famous quote.

RonMacGuy

I love the reference to Apple being a “viable business.”  Larger market capitalization than Microsoft.  $50B in cash.  Stock price growth that blows away the competition.  Market share is overrated.  You don’t need market share to be a successful company.  You don’t need market share to make tons of money and to create shareholder value.  Technologists without business or economic understand just can’t comprehend this.

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