How Android will get to one hundred% market share
Crunch Community Contributor
Matt Heiman is an angel investor and an MBA scholar at Stanford. He works in collaboration with Charles River Ventures.
Android already instructions over eighty % of the cellular OS market share globally, and slightly below 60 % within the US. However you wouldn’t realize it right here in Silicon Valley — virtually everybody I do know has an iPhone. As the buyer know-how panorama evolves over the subsequent 5 years nevertheless, there are a selection of causes to consider that Android, and the Google stack extra broadly, might take a good higher share and turn out to be the platform of selection, even right here.
Loosening of the Apple ecosystem lock-in
Anecdotally, some of the often cited causes amongst iPhone customers for staying with iOS is that they love the “blue bubbles.” iMessage, and its intelligent and seamless integration with iOS’s native SMS software, is an extremely sticky function of iOS.
Over-the-prime (OTT) messenger purposes have many benefits over SMS. The reassurance of understanding that one’s message has been delivered and the synchronous information that the opposite consumer is typing add a deeper degree of intimacy and immediacy to the dialog. The power to simply share media, the shortage of a personality restrict, the seamless continuation of a dialog whereas switching between desktop and cellular, and the shortage of per-message worldwide expenses all add to OTT messaging’s attraction.
However most significantly, OTT messenger platforms are helpful to customers to the extent that one’s friends are additionally on the community. Since iMessage is constructed into the native SMS software on iOS, customers additionally don’t ever have to modify to a 3rd social gathering software, and are routinely drawn into the community. No change in conduct is required. So OTT messaging generally and iMessage particularly exhibit highly effective community results. Therefore the draw of the “blue bubbles.”
Does this story sound acquainted? A cellular hardware producer with a proprietary OS and a captive OTT messenger software? Analysis in Movement, now often known as Blackberry, had precisely this positioning with its common Blackberry smartphones. One of many huge attracts of Blackberry, outdoors of the company setting, was Blackberry Messenger (BBM). However finally BBM wasn’t a robust sufficient draw to maintain individuals on an inferior OS and third social gathering builders created cross-platform messengers comparable to WhatsApp. At this time, Blackberry OS has solely a zero.2 % market share.
WhatsApp simply crossed 1 billion customers. It isn’t inconceivable that OTT messaging purposes like WhatsApp might substitute SMS solely. Alternatively, the migration of SMS to the Wealthy Communication Providers (RCS) commonplace might convey all the benefits of messenger purposes to texting. In both case, the community impact of iMessage can be considerably diminished, enormously decreasing the barrier for these wanting to go away the Apple ecosystem. iMessage just isn’t invincible.
Whereas iMessage could also be crucial instance of Apple ecosystem lock-in, there are numerous different merchandise the place Apple lock-in might equally be weakened. For instance, the emergence of Google Photographs as an software throughout Android and iOS considerably reduces the lock-in of Pictures, the emergence of Spotify reduces the lock-in of iTunes, and the emergence of Drive and Dropbox reduces the lock-in of iCloud.
Gradual discount of Android fragmentation
One of many largest issues with the Android ecosystem is fragmentation: each hardware OEM can function totally different variations of Android and may considerably decelerate the discharge of software program updates. Fragmentation is irritating each for builders and for customers. On the time of writing, I nonetheless can’t get Android Marshmallow on my Droid Turbo, regardless of Google’s launch of the OS in October. In reality, as of April 2016, solely four.6 % of Android telephones globally had the newest Android Marshmallow OS put in.
In distinction, Apple can push out a brand new OS to all of its units as quickly as it’s prepared; the one gating issue is how shortly customers select to put in the replace. App builders typically select to launch on iOS first particularly as a result of releasing on Android requires tweaking the code individually for all the totally different variations out there.
However fragmentation just isn’t solely the results of totally different variations of Android working concurrently. Many hardware OEMs, and even carriers, set up their very own software program purposes and layers on prime of Android to customise the OS.
When a buyer makes use of the iPhone for the primary time, he/she will get the similar interface to everybody else with a brand new iPhone. The identical can’t be stated for an Android telephone, the place the default calendar, SMS, e mail, keyboard and so forth. might simply as possible come from Samsung or Verizon, even if Google itself gives all of those merchandise. With out the mixing of the Google suite of merchandise, the relative attractiveness of Android over iOS is diminished.
Nevertheless, there’s a risk that within the coming years this fragmentation shall be considerably lowered. Some OEMs, resembling Motorola and HTC, are regularly decreasing the extent of software program customization on their newest fashions, bringing them nearer and nearer to inventory Android.
One other driving drive for the discount in fragmentation could possibly be the Nexus suite of telephones and tablets. Whereas these telephones are nonetheless manufactured by third-get together OEMs, resembling Motorola, LG, and Huawei, they’re carried out so in shut cooperation with Google and include inventory Android that includes solely Google software program. Nexus telephones get Android software program updates instantly, as a result of they’re managed by Google. To the extent Google is profitable in proliferating these Nexus telephones, it may possibly mitigate the issues of fragmentation. Nexus might additionally characterize a chance for Google to construct a model cache round its units, making them extra aggressive with Apple on the excessive finish of the market.
Decoupling of telephones and plans
As of 2016, most US carriers have lastly eradicated two-yr service contract plans; going ahead, People can pay for his or her sensible telephone and their plans individually. One of many distinctive options of the US cellular market prior to now was a relative worth-insensitivity of shoppers to units since they sometimes didn’t pay for his or her units or paid a extremely sponsored worth. In reality, on many cellular phone plans, if a member selected to improve to a decrease value system as an alternative of a better one, he/she wouldn’t obtain any of the financial profit.
This paradigm definitely inspired people to buy extremely priced telephones. However in a world the place people purchase their very own telephones at full retail worth, they’re more likely to be rather more worth-delicate. The present base worth of an iPhone 6s, earlier than any upgrades, tax, or Apple Care is $649. In distinction, the typical Android telephone may be bought all-in for properly under $250.
The emergence of Google as a desktop OS
Many might not even remember that Google truly presents their very own desktop OS, generally known as Chrome OS, which competes with Microsoft’s Home windows and Apple’s OS X. Chrome OS as we speak has lower than three% market share of desktops globally, which isn’t a essential mass to draw the eye of app builders. However there are a selection of rising developments which might imply that Google, slightly than Microsoft or Apple, might be the desktop OS of the longer term.
Firstly, the relevance of software program purposes themselves is turning into much less essential as extra purposes transfer to the cloud. Even the dominant MS Workplace suite can now be accessed from the online browser with Workplace 365. With native software program improvement turning into much less necessary, and the browser turning into extra necessary, the shortage of scale in Chrome OS won’t matter as a lot, since native purposes usually are not essential. Additionally, as a result of Chromebooks are designed to go away a lot of the software program and storage within the cloud, they’ve inexpensive hardware elements and promote for a fraction of the price of Macbooks and most Home windows computer systems as properly.
Maybe the bigger catalyst is Google’s alleged plans to fold Chrome OS into Android inside the subsequent yr. Doing so would immediately convey the world’s largest app ecosystem to Google’s desktop OS and would offer a good stronger worth proposition for customers to choose into an Android cell phone.
In fact, proudly owning the desktop OS is just not as strategically necessary in the present day because it as soon as was, and can probably turn out to be even much less so going ahead. However proudly owning a buyer relationship throughout all units and all know-how use instances is extra essential in the present day than ever. In a way, Google as a desktop OS is the lacking hyperlink within the image: with a aggressive desktop OS, Google might supply clients a constant expertise throughout all of their units, additional supporting the Android ecosystem and threatening Home windows, OS X, and iOS.
Apple is the world’s most dear model and has persistently been on the forefront of system innovation during the last 20 years. However as shopper know-how evolves, software program and Web integration is gaining ever growing significance over hardware. Because the presence of the Web continues to permeate extra of our lives and the know-how itself begins to “disappear,” the battle for the buyer might tilt in favor of the world’s largest Web firm over the world’s greatest designer of hardware.
Featured Picture: Bryce Durbin