Does It Matter Which Kind of Smartphone You Own? The Phone Wars Continue

One of the hottest wars in tech rages on.

The battle for smartphone supremacy continues to be a fight between Apple’s iPhone 3GS and Google’s Android-based Motorola Droid.

In a recent Gartner report, Apple continued to lead the U.S. smartphone market with a 26.7 percent share of all sales in the first quarter of 2010. RIM followed with 24.7 percent, while Android held 17.2 percent and Microsoft had 8.4 percent.

These numbers are slightly different from those of comScore, which reported that RIM led in March with 38.1 percent share of U.S. subscribers, while Apple was in second place with 24.7 percent share of subscribers and Motorola was third at 9 percent share of subscribers, thanks to its Droid phone.

What’s interesting is that both Gartner and comScore have tracked growth in the smartphone market as a whole over the last quarter, but have noted that there’s been little movement in individual player’s shares: as one company gains ground, another seems to lose it.

We’re in the middle of another smartphone war. Last year, it was Google and Motorola vs. Apple in the United States; Samsung and Google and Motorola vs. Apple in Asia; and Nokia and Microsoft vs. everybody else in Europe.

This year, the battle is even more complex: Google and Samsung vs. Apple in the U.S.; Samsung and HTC vs. Apple in Asia; Nokia, HTC, and Samsung vs. everybody else in Europe; Amazon’s Kindle Fire vs. everybody else for tablet supremacy; Nokia, Samsung, Sony Ericsson, LG, Huawei, and ZTE vs. Apple for global market share dominance; BlackBerry’s QNX-based operating system vs. Windows Phone for developer support; Android Ice Cream Sandwich (4.0) vs. Android Gingerbread (2.3); iOS 5 vs iOS 6; even Sprint’s WiMAX network vs Verizon’s LTE network in the U.S..

This is what I call a “disruptive” market: one where the rules are changing so quickly that it’s hard to make any long-term predictions with confidence–because they may already be invalid by the time you make them!

This war between Apple and Google is becoming a bit of a bloodbath. On both sides of the battlefield, there are casualties and casualties and casualties, with no end in sight. And the conflict is not only about innovative products or slick design; it’s also about business models: Microsoft has a license fee model, Apple has a high-margin hardware model, and Google aims to be free. They’re all different, and they’re all viable – for now.

Apple’s iPhone 4S was announced last week, and it was a pretty big deal. The company sold four million units in its opening weekend, which is way more than I expected. That’s not bad for a phone that hasn’t really changed much in hardware terms since September 2010 (with the exception of a faster processor and an improved camera). However, I now have to wonder how many people bought the 4S who were planning to buy an Android phone – or whether anybody who already owns an Android phone will now upgrade to the latest Android device instead of waiting for the iPhone 5.

googoe and apple are at war. This war is not just about new features, but it is also about the business models that a company can achieve. At the center of this battle is the smartphone and specifically who will dominate its production.

The iPhone has been one of the most successful products in history. Apple has sold more than 30 million iPhones and they have more than $6 billion in cash. The iPhone has been so successful that Google decided to enter the market by creating its own smartphone based on its Android operating system.

Since it was introduced, the Android operating system has been used primarily on low-end phones with poor performance, but Google was able to convince companies like Motorola, Samsung, and LG to make high-end phones using Android.

The technology industry seems to go through one of these battles every decade. The first, between Apple and Microsoft, was over the PC operating system. Apple lost that battle despite having produced a better product in many respects, including ease of use, stability, and aesthetics.

The second battle was over search. Google won this one even though Microsoft had an early head start with MSN Search. Microsoft had a better product than Google in many ways as well — including more accurate search results — but Google became the primary search engine anyway.

The third battle is currently taking place over smartphones. If you travel to China or India and are using an Android phone or a Chinese-made iPhone clone, you might think that the war has already been decided in favor of Android. But this is not the case in the U.S., where iPhones continue to be popular despite some objective disadvantages such as higher cost per gigabyte compared to competing devices from Samsung, LG, Motorola and others running Android. Why?

The battle for smartphone supremacy has largely boiled down to a battle between two opposing business models: Apple’s vertical integration vs. Google’s ecosystem strategy.

When you’re choosing a new smartphone, it’s easy to get drawn into the excitement of new features and the latest technology. But here’s a truth you may not have considered: The choice of smartphone platform is more important than the hardware itself.

Even though technology has advanced by leaps and bounds over the past few years, the basic process of using a smartphone remains fairly similar from one device to the next. That’s why many people choose their smartphone based on whether they prefer iOS or Android, two operating systems (OS) that are vastly different from each other in nearly every way, from looks to functionality to availability.

While there are many variations in how these OSes work, Apple and Google maintain a consistent look and feel throughout their platforms. This means that once you’ve learned how to use an iPhone, for example, you’ll know how to use all iPhones—and because iPhones are only made by Apple, you won’t be confused by another company’s version of iOS with different features or menus. Other smartphones that run Android don’t have this consistency because Android is open-source software, meaning anyone can modify it. An LG phone running Android will work differently than a Samsung phone running Android. It may even work differently than another LG phone running Android!

The truth

But there are three ways a company can create value:

It can make things that are better and/or cheaper than before. This is the primary source of disruption.

It can find new uses for existing technology, as when Bullfrog created Theme Hospital, a game in which you play the manager of a hospital, after seeing SimCity, a game in which you play the manager of a city.

It can get other people to use their stuff. If your goal is to make money, getting other people to use your stuff is usually the way to do it. For example, if you have invented a new type of lawnmower that gives much better results than existing ones, you will have far more impact by getting others to make lawnmowers using your design than by making lawnmowers yourself. The best way to get other people to use your stuff is to give it away for free. The second best way is to open-source it. (If you really want it used, don’t patent it.)

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