Diehard Apple fans remember what happened last time:
- Apple invented an amazing new product (the Mac) that revolutionized the PC industry
- Developers and consumers went bananas
- Everyone concluded that Apple was going to take over the world
- Apple insisted on controlling every aspect of its product--from hardware to software to distribution--instead of opening up the platform and trying to achieve ubiquity
- A much-less-loved competitor (Microsoft) copied Apple's software (badly) and sold the software to every PC vendor who wanted it
- Developers went bananas about the size of Microsoft's (inferior) platform
- Microsoft took over the world
- Apple was relegated to a niche market and left for dead.
And now diehard Apple fans can be forgiven for wondering if it's deja-vu all over again.
- Apple has invented an amazing new product (iPhone/iPad) that has revolutionized the industry
- Developers and consumers have gone bananas
- Everyone has concluded that Apple is going to take over the world
- Apple is insisting on controlling every aspect of its products, from hardware to software to distribution, instead of opening up the platform and trying to achieve ubiquity
- A much-less-loved competitor (Google) has copied Apple's software (badly) and given the software away for free to every phone (and, soon, tablet) vendor who wants it
- Developers are now going bananas about the size of Google's (inferior) platform, Android
So the first several acts of the play are playing out exactly as they did before. Which should leave diehard Apple fans wondering whether the next two will play out the same way:
- Google's Android will take over the world
- Apple will be relegated to a niche market again and left for dead.
Don't scoff. Back when Apple introduced the Mac, no one would have given Microsoft a snowball's chance in hell of toppling it. And look what happened.
The most important part of what's happening now, as you can see in the chart below, is that developers are wholeheartedly embracing the Android platform. This is because the Android platform is rapidly building a global user base that rivals Apple's in size. Eventually, the Android user base will be a lot bigger than Apple's. And that's where things could get dicey.
Yes, there's a big difference between Android and Windows, which is that Android currently comes in a bunch of different flavors that reduce its chance of become a ubiquitous platform. But we suspect that flaw is addressable.
Apple fans want to believe that Apple can maintain its extraodinary profit growth merely by being a "premium" player--selling fewer devices than the Walmart of the smartphone world (Android) but maintaining a superior product and superior margins.
This is wishful thinking. There just aren't that many premium buyers in the world. And the gap between the latest iPhone and the latest Android phones is closing.
All is not lost: Apple, too, can try to drive volume and market share and hang on to its current ubiquity. And perhaps it has enough of a lead that it can also hang on to a sizable share of the market.
But still: The chart below should scare the bejesus out of Apple. Because it suggests that it may, in fact, be deja vu all over again. (As you look at it, remember that, two years ago, Android was nowhere).