An Ode To The Death Of The Platform Wars … And What Comes Next
Sometime in 2012, I was in the middle of a horse race. The great platform wars were upon us … and everybody had an opinion. Was the iPhone the greatest living invention in the history of innovation? Was Android (and especially Samsung) just copying everything that Apple did? Would BlackBerry be able to pull out of its tailspin? Did the Nokia/Microsoft partnership stand a chance?
Fans mobilized on all sides. The vitriol and rhetoric spewed forth like the Old Faithful geyser in Yellowstone National Park: extremely hot and entirely predictable.
During the height of the platform wars I was covering anything and everything mobile. A new smartphone launch event happened just about every month … and I was there. Companies would send me their latest flagship phones without asking if I wanted to review it … and then never ask for it back. I have a graveyard of old phones sitting in the bottom drawer of my desk at the office.
This article was originally published at ARC — The Application Resource Center
One time while I was on business travel, a huge, heavy plastic box showed up at my apartment. When my ex-girlfriend texted me, she said, “it’s glowing. It’s red. Is it going to blow up?”
It turned out to be some new Nokia smartphone released through Verizon (hence the red) that came with some wireless headphones in a heavy duty plastic construction box that looked like it could have housed a small nuclear warhead.
And no. The phone never blew up. On the consumer market or in anyone’s hands. Nokia sold its handset division to Microsoft, which then shut it down and wrote it off.
And that was the end of the great platform wars. Windows Phone is (almost) dead. BlackBerry is a shell of what it used to be and is now (barely) making Android phones. The only people that care about Sailfish or Tizen or any other Linux deviant operating system are the people that make them. WebOS lives exclusively in LG televisions.
Apple and Google won. The unpredictability of the market ceased and the numbers stabilized. The yelling from the Apple and Android fan boys telling at me that I was a paid shill for one or the other finally, mercifully, stopped.
The Final Score For The Platform Wars
The most telling signal that the platform wars are over is that Apple just announced quarterly earning results that showed a 15% decline in iPhone sales year-over-year. Yet, the only people that really care are Wall Street investors that count on Apple’s massive earnings to provide significant quarterly dividends to their customers’ portfolios.
Overall growth in the smartphone sector will be incremental from now on, driven by low-cost Android smartphones in emerging markets. The top end of the smartphone market in developed economies has become a matter of flavor preference. The top smartphones have become so good from a hardware, performance and reliability standpoint that they are virtually indistinguishable from each other. Do you prefer the simple and easy iOS? The more flexible Google version of “default” Android on its Nexus smartphones? The slick industrial design of Samsung’s array of high-end devices?
One of the most “controversial” articles I ever wrote during the platform wars was based a simple number: 68%. That is the percent of global market share that Android had attained by the second quarter of 2012. The article noted that this number had Apple worried (and it did, at the time) and that a lot of what Apple did at the time was designed to mitigate the coming world of Android dominance (such as the epic patent wars with Samsung and the purchase of the Nortel patents with the so-called “RockStar Consortium”).
The most ardent Apple fans argued that Android was inferior to iOS (in reality, both were pretty shallow at the time in comparison to what we have now) and that Apple would ultimately prevail in the market share wars. Of course, that didn’t happen. Android rose to 75% global market share by the end of 2012 and has held between 80–85% ever since.
Andreessen Horowitz analyst Ben Evans has been at the crux of the platform wars since the very beginning (Evans used his insights in the mobile economy to transition from being an independent analyst to a gig at one of the most prestigious venture capital firms in the world). This week Evans decided to gave the “final score” of the platform wars, noting that things will basically stay the same going forward as smartphone adoption grows towards 2.5 billion today to 5 billion in the medium term future.
So, for March 2016:
630m iPhones and 250m iPads, for a total of 880m
1.3–1.4bn Google Android phones, and 150–200m Google Android tablets.
Maybe 450m additional Android phones and 200m Android tablets in China, not connected to Google services
For a total base of 2.4–2.5bn iOS and Android phones, and (say) 600m-750m iOS and Android tablets.
“Meanwhile, it’s now perfectly clear that both Apple and Android have sufficient scale for their ecosystems to be viable (including the Android subset in China), and that no-one else does,” Evans wrote. “But at the same time, once you’ve achieved that scale, further changes in market share are not very meaningful. It doesn’t matter to a product manager at a big US bank how many Android users there are in China, nor to a product manager launching in India how any iPhones are in California. Where your users are, which users you want and which users spend what is more important.”
The Expansion Of The Platform Wars To New Fronts
When it became clear that the runway for smartphone growth was beginning run out (in late 2013 or so), the platform companies began to expand the footprints of their ecosystems in earnest. The primary battlefields: the home, the car, the television, physical retail/commerce/payments, media (audio, video, news), infrastructure and enterprise. Services built on top of the operating systems became tantamount for margins and recurring revenue.
What many people do not know about the current computing market is that it is fundamentally built on mobile. I always give the example of the “mobile supernova.” We spent 50 years turning a bank of computers the size of a small building into a powerful, portable and connected piece of plastic, metal and glass. That being achieved, the density of the computing power contracted on itself and exploded … like a star going supernova. The material ejected from a supernova is used to create new stars and planetary systems. When the smartphone exploded, it provided the material to create the consumer and industrial Internet of Things and the coming era of virtual and augmented reality.
The platform wars are not quite as intense in this new technological and business landscape. No super fans are yelling at me in the comments of articles, shouting for Nest over Honeywell and calling me an idiot. Retailers, television manufacturers, automobile makers et al. realize that they need to support both iOS and Android as well as have a presence on the Web.
The surface area created with the mobile supernova — based on ARM chip architecture — has opened the door to third parties to achieve market success. Fitbit is the top selling wearable. Roku is near the top of the over-the-top TV streaming market. Nest (now owned by Alphabet, the parent company of Google) and Honeywell and others have the opportunity to capture the smart home. These companies can compete with the same platforms that dominated the smartphone wars (iOS and Android) while also, sometimes, being built on top of them.
What Is Coming In The Next Phase Of The Platform Wars
This is a phrase that journalists and consumers generally hate to hear. People want the next big thing, not the thing that is slightly better than the thing that came before it.
People want big breakthroughs and new features. Flashy headlines and breathless reviews. They don’t want, care or understand incrementalism.
The march of progressive iteration is powerful when it accumulates over time. I remember writing about the iPhone 5 when it came out when most everybody said, “it’s not that much better than the iPhone 4S.” But if you look at the iPhone 5 compared to the original iPhone, the difference is night and day. One (the original iPhone) was, in retrospect, a pretty bad pocket computer with no apps, flaky connection and a bad Web experience. The other (the iPhone 5) was a slick computer with a million apps, great connection and Web experience and dozens of other terrific features. And the coming iPhone 7 is going to be light years ahead of the iPhone 5 (even as people prepare for an iPhone that is only slightly better than the iPhone 6S).
Progressive iteration is how new industry sectors are built. How economies of scale are created over time. How the hardware of the mobile ecosystem diffuses into all different kinds of products.
And that is fine.
“Rather, the changes, and the things to think about, come from other directions — VR and AR on one hand, AI and machine learning on the other. They might change the balance between Apple and Google, but they’re more likely to make that distinction boring,” Evans wrote.
What progressive iteration means in the short to medium term is continuing the work of connecting people homes and their cars, one gadget at a time. Building faster, more robust cellular networks. Adding sensors to cities and analyzing the data to build smarter infrastructure. Creating more power efficient and practical virtual and augmented reality experiences. Taking all of the data created by the new era of intelligent devices and building new, automated processes.
And so on.
Nearly all of these innovations will be built on the back of the platforms and mobile components.
The platform wars are over. But the real work has just begun.
Originally published at arc.applause.com on July 27, 2016.