Sometimes it’s the small decisions that change the world
The multi-platform messaging service par excellence, WhatsApp, says it will no longer provide support for BlackBerry OS and Windows Phone from December 31, making official what we have all known for a long time: that there are only two mobile platforms: Android, with a market share of between 80% and 90%, and iOS with the remainder. Everybody else is an also-ran.
How did we get to this point? In August 2005, Google acquired Android, a company founded by the visionary Andy Rubin, turning it into the company’s best acquisition ever. The operation positioned the company in the increasingly important smartphone ecosystem, which with the launch of the iPhone in January 2007 redefined terminals into pocket computers with an increasingly broad range of features.
The launch of the App Store in July 2008, with a total then of 500 applications, followed by Android Market (now Google Play) in October of the same year, gave us one of the keys of the then nascent app segment. If a company did not have enough terminal base installed, developers weren’t going to create applications for them, while those users looked enviously at other terminals capable of using them. The move caught BlackBerry on the back foot, still convinced that the consumer market was a distraction from the much more lucrative corporate segment, while Microsoft, despite launching Windows Phone at the end of 2010, then setting up Windows Phone Store, failed to convince developers to create versions of their applications for it. Without an adequate supply of applications, both operating systems languished until their announced closure: in January 2013, BlackBerry said it was withdrawing its operating system and support for it ended in December of that same year, joining the lower leagues of manufacturers of Android-driven devices, while Microsoft announced the end of Windows Phone in January 2016 and ended support on July 11, 2017, abandoning a line that also spelled the end of Nokia as we knew it.
What next? Android is already the most important operating system in the world, ahead of Windows, while iOS remains reasonably stable with a market share that peaks each time Apple launches a new phone. The situation echoes what happened with the world of computers, which ended up being practically a monopoly: today, Windows dominates desktops and laptops, with a 90.7% market share, compared to Apple’s 5.9% and Linux’s 3.4%, a divvy-up that isn’t going to change any time soon. Windows domination of a market that offers control over an operating system and an app store is pretty much unchallengeable, giving it a de facto monopoly. And while control of the Android market is now being fought over by Chinese and South Korean manufacturers, Apple has managed to consolidate itself, despite its relatively poor market penetration, as the company with the highest profit margins and with the highest share rating, while also setting trends.
Is market concentration based on buy outs a technology-specific trend, or a pattern common to all industries? It seems pretty clear that the network effect tends to play a stronger role in technology markets than in other industries, but given technology’s characteristic of extending into other industries, forming an increasingly important part of them, the question is worth pondering. Seen in perspective, Google’s acquisition of Android for around $50 million was arguably the most important operation in the recent history of technology, playing a leading role in defining the ecosystem we know today, and that will likely influence many other areas.
Sometimes, it’s small decisions, like IBM awarding Microsoft the development of the operating systems for its PCs or the conversation between Andy Rubin and Larry Page that led to the acquisition of Android, that end up defining the technological landscape that we know. The rest, as they say, is history.
(En español, aquí)
