The Biggest Lie That Ever Was Told

Many are predicting that the smartphone market is set to explodein 2011, some speculating that Android is poised to capture much of that growth.

Not a very risky prediction, really.

MG Siegler weighed in viaa TechCrunch piece in which he repeats a couple of myths thatsomehow bear truth only through repeated assertion.

The “Apple is a Luxury Brand” Myth

And so the only way for the iPhone to “beat” Androidwould be for Apple to either open iOS up in the same way thatAndroid is, or to create a huge variety of iPhones spread acrossthe spectrum in terms of features and price. Neither of thosethings is going to happen.

My young daughter happens to enjoy Angry Birds, so recently Ithought I’d grab her a little portable device to play it and hermovies and music on. Being a casual mobile app developer, targetingAndroid for almostarbitrary reasons, I looked to see what Android devices wereavailable so it could double as a convenient testingtarget.

There is nothing. The few devices I found were in the $400 rangeand generally featured underwhelming processors, terrible screens,and shoddy builds.

You simply can’t find an Android PMP as economical aswhat Apple has achieved with the iPod Touch. A4 processor.Brilliant display. Great GPU. Facetime. Dual cameras. That thing isjust a crazy value.

Sure, technically the iPod Touch isn’t an iPhone, but for howmost people use their smartphones (where the “phone” part of it isutterly irrelevant, and it’s merely a mobile computing device),with the widening deployment of WiFi it is increasingly just ascapable.

And make no mistake: The iPod Touch is a critical element of theiPhone’s domination. We’re talking platforms here, and while Googlewas busy actually undermining the non-smartphone devices (untilrecently Google treated tablets with incredible antipathy. Whateverthe internal politics — perhaps the perceived birthright ofChromeOS — they were not supportive whatsoever, at one Google I/Oacting both irritated and confused when an audience member askedabout tablets. Nor are they supportive of PMPs where they pullmarket access and essentially cripple the device at birth), Applewas busy spreading iOS far and wide, creating a healthy ecosystemfor developers to target.

Apple knows how to price down technology with the best of them,and they have demonstrated a strong ability and willingness to doso. The dated 3GS is still being manufactured and sold as new, justas the 3G hung around long after the 3GS became the starter.

The 3GS is incredibly dated by contemporary standards, and itsslow processor, limited RAM, and old-school screen resolution placeit firmly in the “low end” market. Apple still sells it. Read whatSiegler had to say above and consider that.

When Apple feels pressure to segment the marketing of iOS morethan they already do (“You can get an iPhone minus the 3G radio andfine-GPS for just $240 full retail, or you can get your subsidized3GS if you’re a chump and can’t afford a couple hundred whensigning up for a two thousand dollar contract commitment….”),they will. Any illusions that they won’t, or moreso that theyhaven’t already is just blind zealotry, lost in the weedsdesperately trying to feel around for some comfort to assuageagainst Apple’s marketshare competition.

I recently gained an interest in American football (afterbecoming aware that there was so much more to the game than just abunch of guys smashing into each other, not to mention the “beprepared to explain man things” motive given that I have threeyoung sons) and one of the things I have noticed in thatlive-can’t-fast-forward world is that Apple advertises like crazy.From my limited sampling they are easily the overwhelminglydominant pitchman on television, alternating between iPod Touch,iPad, and iPhone commercials. They are as mainstream as acorporation could get.

Stop your PVR fast forwarding for a while and pay attention tothe commercials. Microsoft, Intel, Dell, even McDonalds…they aredrown out by Apple’s message.

The “Apple’s Profitable Niche” Myth

They’re perfectly happy “at the top of the market”where they make a ton of revenue and profit. Billions more, infact, than Google does with Android.

A recurring claim is that Apple will be pleased to retreat totheir profitable little niche: That they’re a purveyor of highmarkup, limited-run technology devices for the connoisseur, andthey’ll continue happily in their grey poupon ways, Android bedamned.

Of course for much of Apple’s history it was an incrediblyunprofitable enterprise. Through the 90s, despite having theirconfident bevy of expensive devices and their single-digitsaturation, Apple was an economic basket-case, posting billiondollar losses or cutting to the bone and barely breaking even. Atone point in Steve Jobs’ reign they were bailed out by Microsoft(an investment that would be worth untold riches for Microsofttoday had they not quickly divested it).

The iMac started to turn that around by providing aninexpensive all-in-one computer that was novel andaccessible for everyperson USA, going back to its middle classApple II roots. My wife still berates me for not hopping on theAAPL train after correctly predicting what the iMac’s impact wouldbe.

After it, of course, the iPod stormed the market. It was a gooddevice that was marketed right, and it laid the groundwork for theiPhone to make some major inroads on day 1. Again, the iPod sat atvirtually every price point, easily winning the value race in mostcategories.

Cars and televisions and stereo receivers came with iPodconnectors or docks. They didn’t for any competing device.

Apple’s profitability grew.

Apple’s ability to squeeze a growing profit margin out of theirbusiness came by escaping from the niche. In the smartphone marketthere was a period where Apple was effectively closing on 100% ofthe market, which is exactly how developers and the media treatedthem (see the countless organizations that made an iPhone app and that was it — they felt the consumerwas served). Sure, the graphs would include Blackberries andNokias, but come on — Apple had the market to itself outside ofthings your work makes you carry and “What, you mean this thing issupposed to be a smartphone?” devices.

And like most businesses Apple is great at working the synergy.Many of their PC sales came about because they first got the userwith an iPod or an iPhone. In the development world, a milliondevelopers ran out and bought an Apple equipment stack to try towrite their own lottery ticket on the grand iPhone AppStorebet.

Apple has no plans on retreating to a niche. Nor was that nicheever profitable for them. Their strategy pounds home this point, witha focus that is engineering around significant if not dominantmarket positioning, with network lock-in that makes it difficult tochallenge or break. Their application strategy, the top to bottomsegmentation, and the “you’re with us or you’re against us”decisions like Facetime, there should be no confusion that Apple istargeting anything less than being the Microsoft of the decade.

The Red Lobster of Technology Companies

You can’t get more mainstream than Apple. Apple is no moreexclusive than the GAP or Target or eating at Red Lobster.

They make great devices, no doubt about it. I’ve been riding theAndroid train for 17 months now based upon the promise of manycapable companies working together, but until the latest generationof devices, such as the Desire Z, I have never felt confident inrecommending the devices to anyone else. Really I’m a littlesurprised it survived thorugh those birthing pains.

But it did. Android today is a very decent device and it’s onlygetting better. Pundits like Scoble (whose fame still confuses me)lament that Android isn’t deserving because the apps are better onthe iPhone. Apps don’t appear overnight, Scoble, and the surge indeveloper sentiment towards Android has been overwhelming over thepast months. On my device I’m getting app update notices literallydaily now, as development teams rush to fix up what previously wasnothing but a second thought.

It’s getting better everyday.

We came periolously close to a unipolar smartphone market, anddespite the pains that I had to suffer with Android during itsterrible toothing years, I’m glad that we now have a market that’sopen for any and all. Like Firefox did for Chrome, by makingmultiplatform support the default Android leaves an opening forBlackberry, Microsoft, Nokia, or anyone else to come along withsomething better, without being crowded out by an existing andimpenetrable ecosystem surrounded by an unassailable networklock-in.

The “Apple Gave The Power Back to the Users, Android Gave It ToThe Carriers” Myth

The flip-side to this Android domination is what we’realready seeing. The carriers (again, in the U.S. in particular) areusing Android’s openness to perform many of their same old tricks.I can’t help but think sometimes that it looks as if Googleactually did the carriers a huge favor in the long-run becausethey’ve taken many of the bells and whistles that drove users tothe iPhone in the first place and opened them up for the carriersto use as glittering lures to rope customers back into theirtraps.

This is the myth that I find simply extraordinary, theoverwhelming evidence that it is utter nonsense being soobvious.

In the US Apple has been laying in bed with AT&T for years.Want to go to Verizon Sorry, not an option. T-Mobile Not anoption. There is zero competition if you want an iPhone in theentire US of A.

Gave the power to the users, did it First they came for yourchoice of carrier, with AT&T paying heavily into Apple’streasure for the priviledge.

Apple originally had a no app policy — as demanded of them byAT&T due to fears that apps would go crazy and take down thenetwork — just as Facetime refuses to work over 3G, and variousapps that threaten the AT&T / Apple relationship will getquietly squashed.

While Apple doesn’t have NASCAR apps or similar bloatware thathave very unfortunately appeared on a small minority of Androidphones, every single choice on the device is made for you if you’reset on an iPhone.

Compare that to Android: Pick your carrier among all available.Pick your device among literally dozens of top rank devices. Usestandard consumer discretion to align interests with vendors.

Heard that Verizon stuck some bloatware and a Bing default ontheir phone Okay, as a consumer you have countless alternativechoices to choose instead while still using the apps you know, thedata you’ve accumulated, and the platform that you’ve invested in,sending the message that it isn’t viable. If Apple, on the otherhand, decided that one half of your display will henceforth shownothing but ads (another ridiciulous myth is the proposition thatthe iPhone represents a purer transaction, which is utter tripe.Apple is locking you in as a consumer to their various media,application, and advertisement platforms), you have no optionsaside from simply abandoning the platform and whatever you haveinvested in it.

The iPhone only empowers users in a 1984-esque redefinition ofthe meaning of empowering. Any control it took from the carriers itplaced firmly in the hands of Apple.