A Blog by Jonathan Low


Aug 8, 2019

The Reason the Smartphone Revolution Was Driven More By Android Than Apple

Though Apple captures most of the world's smartphone profits thanks to its go-it-alone strategy, Android and its various partners generate the greatest volume.

Which model will dominate the future may be determined by how big tech companies decide to monetize their electronic ecosystems now that the phone market is largely saturated. JL

Shira Ovide reports in Bloomberg:

Without Android, smartphones might have stayed as they were when he was alive: a remarkable technology confined mostly to the relatively affluent parts of the globe, as the PC was before it. When Jobs unleashed his Android rant, the iPhone represented 15% of the 175 million smartphones sold worldwide. Fast-forward to 2018, and Apple still had 15% of the market, but total smartphone sales mushroomed to 1.4 billion. Versions of Android powered more than 8 in 10 of those new devices.
Steve Jobs was furious. “I will spend my last dying breath if I need to, and I will spend every penny of Apple’s,” he told his biographer Walter Isaacson, “to right this wrong.” The wrong? A mobile operating system by the name of Android, the free Google software that manufacturers were using to make all kinds of look-alike iPhones capable of acting like iPhones. Under Jobs, Apple Inc. tried to sue what it called iPhone ripoffs straight out of existence. The chief executive was pretty straightforward about that aim. Included in that same rant from 2010 is the line “I’m going to destroy Android.”
Thank goodness Jobs failed, in the courtroom and the marketplace. Without Android, smartphones might have stayed as they were when he was alive: a remarkable technology confined mostly to the relatively affluent parts of the globe, as the PC was before it. Instead, the smartphone represents a new branch of technological evolution, the driving force that’s bringing the rest of the world online.
Only a decade has passed since the first major Android phone, the Samsung Galaxy, hit store shelves, and just about half the global population will have a smartphone or something similar by the time Samsung Electronics Co. unveils its latest flagship model, the Galaxy Note 10, on Aug. 7. Few other consumer gadgets have gotten to that threshold so fast. Although Apple sparked the modern smartphone revolution, Android was the essential ingredient that made the devices ubiquitous.
Maybe this all would have happened even if Android never existed. More likely, it would have taken longer for smartphones and the internet in general to reach this tipping point, and online adoption might have stopped at a much lower level. Consider that when Jobs unleashed his Android rant, the iPhone represented about 15% of the 175 million smartphones sold worldwide in the prior year. Fast-forward to 2018, and Apple still had about 15% of the market, but total smartphone sales had mushroomed to 1.4 billion. Versions of Android powered more than 8 in 10 of those new devices.
Three principal forces pulled off this coup. There was Google, with its software and services; Samsung, a South Korean electronics giant waking from its slumber; and China, where a stunning economic rise created a massive audience for life-changing gadgets. Together, this unwitting coalition created an unprecedented technological transformation. Essential to Android’s success: It was, as it still is, a hot mess.
Each of the big three players in Android’s ascendancy is starting to seriously reckon with the attendant downsides of the way things were set up. Android won, but as companies race to figure out the future beyond smartphones, Jobs is getting his revenge. A command-and-control model like Apple’s is likely to rule what’s next, whether computer-piloted cars or eyewear that superimposes virtual information on the wearer’s field of view. We may never see anything like Android again.
From today’s vantage point, it’s easy to view the ubiquity of the smartphone as preordained, but only an extremely optimistic tech seer would have predicted it when Google bought a startup called Android in 2005. After the iPhone landed like a bomb in 2007, Google scrambled to make its open source mobile OS available for no direct cost to telephone companies and phone manufacturers. In return, Google was able to latch its lucrative online advertising machine to most any phone running Android.
It’s tough to overstate how many of the key industry decisions around this time were driven by fear. The iPhone had suddenly made what cellphone you had more important than whose service you used, and wireless carriers who’d long been able to dictate phones’ looks and functions wanted their control back. Manufacturers such as Motorola initially had no compelling answer to Apple’s design and worried they might be wiped out. (Many were proved right.) Google itself was terrified that Apple, Microsoft Corp., or another company would dominate the young smartphone market and shut out Google’s search engine or somehow make it obsolete. Android seemed a neat solution to all these problems, or at least a Xanax for the anxieties. “Google truly opened the door,” says Ryan Reith, a vice president for market researcher IDC.

Share of U.S. Households Using Select Technologies

Color TV
Data: Our World in Data, Horace Dediu, Comin and Hobijn (2004), U.S. Census, CDC, EIA, Pew Internet, Edison Research
With Android, any phone maker could churn out an iPhone-like product and, if it wanted, customize it before branding it as its own. Companies that made video games, ringtones, and other phone software no longer had to create a zillion versions tweaked for a vast sea of mostly crummy proprietary operating systems. Mobile carriers had something for which customers would pay more, helping the companies recoup the billions of dollars they were pouring into faster mobile internet networks capable of handling skyrocketing traffic from websites.
The first Android devices entered the market about 18 months after the iPhone, in late 2008. They were clunky and didn’t catch on right away. But the technology and devices got better, and the beginning of a movement slowly took hold starting in 2009. Cellphone pioneer Motorola and relative newcomer HTC Corp. came out with fairly popular Android phones. Samsung took it to another level.
The Galaxy was the first Android model from a major cellphone manufacturer. Samsung, a company with roots in the export of fish and produce, was the world’s second-biggest seller of mobile phones, behind Nokia Corp., when the iPhone went on sale. The Korean company was caught flat-footed by the first round of iPhone mania (people sleeping in line at Apple Stores or paying hundreds of dollars for iPhone shopping bags on EBay), but it dove in once it saw Android was starting to gain some traction. Samsung started to make a dizzying array of Android phones at every conceivable price tier and with different features. In its home country and elsewhere in Asia, Samsung aggressively pushed its larger-screen phones, and they became trendsetters globally. In the U.S., starting in 2011, the company began to spend lavishly on TV commercials that poked fun at iPhone owners as mindlessly loyal to just-OK gadget upgrades.
Rivals sneered at Samsung for trying to spend its way to relevance in the U.S., but it worked. Two years after the company put its weight behind Android, it edged past Apple to become the biggest global smartphone manufacturer, accounting for about 1 of every 5 sold. The following year, the South Korean company grabbed close to one-third of a booming smartphone market, according to Counterpoint Research.
Samsung’s success benefited the whole Android alliance. In 2012 sales of Android phones were six times the level of two years earlier, and they outsold iPhones 4 to 1. The courtroom fights between Apple and Android proxies such as Samsung were just getting started, but it was becoming clear that Android was winning and bringing the smartphone to a broader global audience.
China came next. The government’s push for economic growth led to the shockingly speedy development of fast mobile internet networks in every corner of the country. Samsung was initially a powerhouse in China before the booming urban classes gravitated to Apple, but the biggest winners were homegrown smartphone companies such as Huawei Technologies Co. and Xiaomi Corp., which created customized versions of Android without Google apps. The U.S. company’s web services have been officially inaccessible in China since Google pulled back its operations in the country in
the country in 2010.

Global Smartphone Use by Country

25%50%75%100% subscriptions per personAndroid market share
The world’s most populous nation skipped a whole generation of PC development and went mad for smartphones. In 2005 less than 10% of China’s population used the internet, according to the United Nations. The figure in 2017, the most recent available, was 54%. Almost all of those 800 million people are using smartphones, not PCs, to go online. Apple was successful in China, too, but about 9 of every 10 smartphones sold in the country run on Android.
In India, the fastest-growing major smartphone market, Android devices account for 99% of units sold, says Counterpoint Research, and the Android-like KaiOS is the next-most popular for internet-­connected phones. This pattern has been repeated around the world. The iPhone arrived, but Android grabbed the biggest share of buyers and made the smartphone a mainstream tool like nothing before.

Mobile Operating System Market Share

*2019 is as of June. Data: Statcounter
Last year smartphone sales volume was more than nine times what it was in 2008, the year after the iPhone came out. It took a quarter of a century for annual cellphone sales to reach 1 billion. Smartphones got there much faster, rocketing past 1.5 billion a year before a recent sag in new-device sales.
Android has come with downsides, of course, for its key triumvirate and the rest of the world. The same qualities that made internet-connected mobile devices so thrilling for more than a decade—­eliminating gatekeepers, making information instantaneous, and connecting people with different points of view—now feel threatening to democracy, public safety, and our mental health. Samsung and other Android partners have also increasingly sought to free themselves from Google by pushing their own apps or software features ahead of those in the standard Android bundles.
And for Google parent Alphabet Inc., Android’s legacy has grown messy. Last year, after a long investigation, European Union regulators declared that Google’s offering Android for free but with strings attached was a violation of EU anti-monopoly laws. The EU also fined Google for favoring its web shopping service ahead of rivals and for hurting competition in internet search ads. The company is appealing all three actions.
The smartphone is now middle-aged by the sped-up standards of the tech world. IDC estimates that sales of the devices will decline in 2019 for the third straight year. There remains a big gap between the 50% of the world that uses the mobile internet and the 80% to 90% where analysts predict adoption will top out. But reaching the next 3.5 billion to 4 billion people gets progressively harder. Even Android can’t drive phone prices down low enough for some people and places where the smartphone hasn’t spread widely.
And as technologists bet on what lies beyond the smartphone, the odds are that Android or an Android-esque system won’t have a major role. In a future in which wireless connections are so fast and cheap that the internet can be built into every car, desk chair, thermostat, virtual-reality device, and pair of glasses, a single gadget that acts as an access point for the digital world may be much less important. And the biggest platforms for cloud computing, driverless
cars, and voice-activated digital assistants are proprietary systems, not open coalitions like Android. The key developers, such as Alphabet, are wagering it’s better for them to act alone.
They have an example in that regard. Even with a minority share of the world’s smartphones, Apple captures the vast majority of profits among smartphone manufacturers, and loyal iPhone owners buy billions of dollars of additional Apple hardware, apps, and internet add-ons each year. So while Google’s OS blankets the globe, Jobs’s philosophy may yet win out in the next generation of gadgets. For better and worse, the future of computing probably won’t look like Android—an open, democratizing, somewhat uncontrollable technology that rules the world.


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