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Written by Rory Kiefer   
Thursday, 13 May 2010 02:14

“Smart phones,” or those diminutive computers you (may) have in your pocket right now that also happens to handle your phone calls, are an undeniable fad as of late. Focus is changing  in the computing world toward catering conventional media and products to mobile form factors and mobile-friendly designs in fevered attempts by corporate giants like Intel, Apple, Microsoft, Google, and many others to tap into the profit boon emanating from this trend.  Tech blogs – being far more adept at handling the volatile and ever-changing landscape of the smart phone industry than traditional, larger media outlets – are faithfully watching the scene and reporting on anything even remotely interesting, and the success of their zealous efforts are quite apparent in hindsight of the recent, dramatic Gizmodo new-iPhone loss/theft case.

Despite the superficial sense of novelty that most onlookers/partakers of this craze feel from these curious little pocket computers, the smart phone industry is significantly older than the earliest media publications of Apple’s iPhone success. Older market leaders to this former niche market, RIM and Nokia, still have the numbers to tout superiority in market penetration, but new players Apple and Google are the harbingers of interest anew and are setting the hearts and minds of newfound enthusiasts and fanboys ablaze with new features, functionality, and gadgetry. They also wield grossly superior growth statistics to the industry's founding titans. Apple has been enjoying a comfortable lead in  market growth – that is until earlier this week when media outlets erupted with news that Google’s popular Android operating system for mobile phones is surpassing the iPhone in market penetration.

Source: NPD

In the weeks and months leading up to this announcement, media outlets were sharing a virtual war of words between corporate techie-trendsetters Apple, Adobe, Microsoft, and Google over the admission of semi-recently-acquired Adobe Flash into the mobile computing club. Tech blogs had a field day as fevered enthusiasts filled comment sections of related blogs with smears against Apple and their rigid stance against inclusion of Flash and Adobe and their seemingly negligent implementation of Flash. A letter published by the black-turtlenecked Apple guru Steve Jobs fanned the flames – though little did he know at the time that his letter would be used against him as justification for his opponents’ success.

Apple’s Arrogance Stokes Android Gains,” chimed technology news outlet InformationWeek – not missing out on an opportunity to leverage the already controversial words of Steve Jobs’ open letter for their own gain. “Android Outsells the iPhone: No Big Surprise,” says PCWorld with the same motive. Indeed, media outlets scaling from no-name tech blogs to CNN.com all had articles chock full of a plethora of reasons as to why and how Apple, who’d previously being rolling in profit from epic sales statistics, had been beaten by slow-gainer Android. Although some of the reasons bordered on sheer stupidity – such as the silly notion that shunning Flash or rejecting some developers’ applications entry into the apple App Store, some outlets managed to hit the nail on the head: availability. Apple’s iPhone may have brought us the touch-screen smartphone we know today – equipped with a myriad of previously unconventional mobile gadgetry like motion and tilt-orientation sensors, but they only brought it to a single carrier. That carrier, AT&T enjoyed massive success, when creating the contractual agreements and stipulations upon which that success was founded, both AT&T and Apple unwittingly set into motion this very sequence of events where despite some initial success, a competitor with more openness and availability can slowly but steadily surpass the artificial limits of forced exclusivity. There simply is no other piece of this equation that has anywhere near the impact of forced exclusivity on the smart phone markets current standing – and this certainly did not come to be on account of something as trivial as Apple’s perceived “arrogance.” Apple would have been broke decades ago if that were truly the case.

The only question left is “how long?” The latest media-outlet smart phone industry news is that AT&T has apparently managed to seduce Apple into an extended period of carrier-exclusivity. This does not bode well for Apple, and it may be equally damaging to AT&T. The blue Deathstar-like logo wielding Telco giant has posted network usage growth statistics that indicate usage increases totaling 6700% since the quarter that the original, humble iPhone 2G launched. Over six thousand percent - in fact, closer to seven thousand. Yes, that has had a direct effect on the entire AT&T userbase. Customer satisfaction and dropped call statistics have defied AT&T’s attempts at damage control by yielding inversely proportional trends to the usage percentage statistics. AT&T’s dropped call and satisfaction numbers are showing that users are not satisfied with the network in its current state – and those network usage stats are not showing any signs of letting up. The latest posted figure of six thousand is a sign linear growth from the previous year’s four-thousand percent figure.

Source: Gizmodo

Meanwhile, Google’s enjoying having no such issues on account of having made Android to be platform-agnostic. Several mobile phone hardware companies have been sharing in Android’s success as a platform, and there are already several other devices in production that plan to make use of Android’s adept handling of small-scale computing machinery; the television market will be the next to see devices graced by Google’s handy operating system. This is only an indicator that while Apple seems to have reached the ceiling of the profit-vessel they masterminded with AT&T, Google’s vessel will most likely continue to enjoy the velocity it’s slowly accumulated just despite Apple and AT&T’s efforts. Spanning multiple hardware platforms and multiple carriers is only a single dimension of Google’s open ideals – spanning multiple *types of devices* is another dimension entirely. Who knows where Android will end up after Televisions? Cars? Refrigerators? Home Security? Hot dog stands? Only time will tell.

One thing is certain, however: the current state of the market is a crisp reflection of the scope with which each company views the future of small scale computing, and it seems that Google’s ticket to play in this market may just be a winning one. With so much competition in the market, one clear winner is the consumer.

Update: Within the time period this article was written, the AT&T exclusivity rumor has become both inflated and deflated. Reports are coming in that there's no proof of said exclusivity-to-2012 deal (no surprises there), and that there are some marketing preparations showing that there will indeed be an iPhone for Verizon. That stands to expand Apple's customer base to at least another 90 million customers - maybe even more if it were to come out to Sprint and T-Mobile too. It seems that this battle is far from over, and neither Google or Apple will go quietly into the night. It is clear, however, that Google has put the ball into Apple's court, and come June, we shall see if Apple can deliver a blow of equal or greater magnitude.


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