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Time for Apple to Step Up their Game

Apple’s marketshare has been shrinking since its highs of the last decade. Sure, it is not a zero sum game at the moment but their growth rates are also lower than their Android counterparts. This is a worry. I am an Android user at the moment, but I have no desire to see a competing platform sink the manner Macs did when Windows took a more open approach and continues to dominate desktops and laptops for over 3 decades. That, in all economic theory, is bad for the consumer. I am no fan of Apple, in fact, I completely dislike their arrogant tones and deliberate marketing lines that tend towards outright lies. Yet, it is better for technology as a whole and consumers to have variety and see the big firms competing.

 

Falling Market Share

iOS’s market share has been falling slowly but this year has been a telling one. In IDC’s report, similar year on year quarters were used which erases the usual arguments that the new iPhone has not been launched yet.

Android’s gigantic footprint of 46.9% in 2011 has surged further to 68.1%. Obviously, it ate up most of BlackBerry OS’s and Symbian’s share but Apple’s 10.11% drop has to be attributed to Android as well. The only other winner here is Windows Phone but not much can be said of its jump mainly because the base share was so tiny. In short, iOS is getting eaten away to 16.9% mainly by Android.

Operating System

Q2 2012 Market Share

Q2 2011 Market Share

Market Share Change

Android

68.1%

46.9%

+45.2%

iOS

16.9%

18.8%

-10.11%

BlackBerry OS

4.8%

11.5%

-58.2%

Symbian

4.4%

16.9%

-62.9%

Windows Phone 7 / Windows Mobile

3.5%

2.3%

+40.0%

Linux

2.3%

3.0%

-23.3%

Others

0.1%

0.5%

-80.0%

Grand Total

100.0%

100.0%

 Top Smartphone Operating Systems, and Market Share (IDC Worldwide Mobile Phone Tracker, August 8, 2012)

Android’s market share is closing in on Windows’ holy grail territory on desktops and laptops. This is a worry because I do not want to see a similar dominance that desktop and laptop users have faced over the past 3 decades.

 

Apple’s Track Record

Apple has proven over and over that they are the best company to bring technology to mainstream users. They were never inventors but they knew how to make machines and devices that non geeky people could pick up and use.

The Apple II - Brought PCs into Homes

The Apple II – Brought PCs into Homes

The Apple II system brought PCs into homes. It made put ‘personal’ in personal computing. IBM at that point already had a gigantic lead in business of which Apple tried to break into but failed with the infamous overheating Apple III. Apple than copied (‘or took inspiration from’ if you may) Xerox’s GUI and launched the Macintosh via the 1984 Superbowl commerical. The Macintosh line did not do well in numbers but brought desktop publishing to PCs.

Political turmoil left Apple on the tenterhooks requiring Microsoft to make an unlikely rescue with Jobs famously embracing Microsoft and calling a truce. Of course, Microsoft didn’t do it out of good will. It was also trying to avoid looking like a monopoly and facing legal follow ups. Here’s a timeless quote from Jobs:

“If we want to move forward and see Apple healthy and prospering again, we have to let go of a few things here. We have to let go of this notion that for Apple to win, Microsoft has to lose. We have to embrace a notion that for Apple to win, Apple has to do a really good job. And if others are going to help us that’s great, because we need all the help we can get, and if we screw up and we don’t do a good job, it’s not somebody else’s fault, it’s our fault. So I think that is a very important perspective. If we want Microsoft Office on the Mac, we better treat the company that puts it out with a little bit of gratitude; we like their software. So, the era of setting this up as a competition between Apple and Microsoft is over as far as I’m concerned. This is about getting Apple healthy, this is about Apple being able to make incredibly great contributions to the industry and to get healthy and prosper again.”

Since then, Apple has never got into a real one on one with Microsoft. Apple’s ads on ‘Macs vs. PCs” were never about OSX vs. Windows. It was Apple vs. HP, Dell, Acer, etc. Apple after all makes its money off hardware. Official support from Apple for Windows to run on their systems came in the form of Boot Camp.

Official Apple support for Windows 7 on Macs

Official Apple support for Windows 7 on Macs

Apple’s transition to squarely focus on consumer electronics thus made a lot of sense. They timed it right and it paid off. But with its track record, the current downswing in iPhones is not something new. In fact, it is the same thing happening again.

 

Time Is Ripe for Change

I watched iOS6 being presented with little interest not because I was no longer on the platform but rather because even the most diehard of Apple fans will tell you – nothing much really changed.

iOS looks dated and cluttered

iOS looks dated and cluttered

I had to dig deep to find something interesting to write and that possibly sums up everything you need to know about iOS6. Apple has been done many things right in iOS 1. Versions 2 and 3 brought improvements system wise. iOS4 brought a high resolution format, iOS5 copied Android’s notifications feature but iOS6 brought nearly nothing new to the table.  I won’t touch about Siri and FaceTime because frankly, how often do you actually use it?

  1. iOS needs a refresh feature wise. Make the phone do something cool that no one has thought of. Apple does not allow 3rd party applications to handle low level system tasks. I get their argument but maybe they should develop a powerful app on their own to allow the phone to intelligently know what to do at each location and make the smartphone experience purely automated. Make the phone a user’s true personal assistant. My One X knows where I am roughly without needing GPS (cell towers suffice). It knows when to go silent, when to connect to wifi and when to sync. I can use it without toying with the settings and it does everything the way I want it to. Of course, I had to set everything up the first time. If Apple is to continue its proud name of making products that improves the user experience, something akin to this should be built in.
  2. Form factor wise – thinner and bigger has had a proven track record in Android. The iPhone 5 will match the thinness of the Galaxy S3 and One X but still have a smaller screen. Many Asians (smaller hands) have taken to 4.8″ screens like a duck to water and there shouldn’t be a reason why Apple isn’t catching up in this area. Screen estate is king, Apple of all companies would know that.
  3. Looking at the design, beveled edges are out of fashion for the past few years, yet Apple clings on to the rounded, shiny, bloated looking icons when simplicity is now king. Both Android and Windows have moved to thin, straight lines that look sleek and minimal. It makes the iPhone look like a toddler’s toy really. A big screen of icons no longer suffices as well.

Apple can innovate on what others have done really well, but when it comes to improving on what they have, they seem very much locked up in their own world.

As much as Apple has overtaken Nokia a few years back, it’s starting to become Nokia in terms of clinging onto old concepts and designs. To put it short, it has to change and innovate on its own products. This is one key area that Apple is weak at.

 

Why Market Share Is Important to Apple

An argument can be made that Market Share means nothing to Apple who are just after maximal profits but one has to remember that they are invested into a proxy medium known as iOS. More importantly, they are the only flag bearers of that system.

Apple should have already learnt a painful lesson on Macs. As much as OSX seems to be more secure and much better tuned, its lack of apps support continues to cause it to be second best to Windows. Developers mean everything and the shrinking market share of iOS will be correlated with a similar dip in developer interest. If you need more real world indications of this, many once exclusive iOS apps have hoped to Android. Why? Simple economics. Demand.

Instagram, Path, Flipboard and many others have reacted to demand changes

Instagram, Path, Flipboard and many others have reacted to demand

Android matches iOS in numbers and now Windows is joining the fray. Microsoft has always been a huge magnet for developers and the current Windows line up is extremely enticing for app developers (develop for one platform and be on the desktop, laptop, tablet and phone).

Market share does mean a lot to Apple if they want to continue doing well and earning those profits shareholders expect them to. In software ecosystems, you either eat or get eaten, you can just stand still.

It is time Apple began eating again. In the past 1-2 years, that Apple logo has literally had a chunk bitten off.

 

What About Tablets?

Apple has a stranglehold of the tablet market basically and there is no close competitor. Samsung’s tablets are ok but no where close to the same quality offered on their phones. Furthermore, Android just doesn’t seem to click that well on a tablet. The best experience I’ve had with an Android tablet is with the Asus Transformer series but that is only for a select crowd.

Yet, Apple’s market share has dipped from a high 80+% to a recent 70% figure. This is natural because competitors are easing in and the market has not yet matured.

They must quickly iterate on iOS to avoid seeing the iPad’s market share continually eroding – just like how the iPhones are currently.

The iPad currently offers the best tablet experience. Even an android user like myself recommends it to buyers of current tablets. But such advantages cannot be sat on. They must be pushed aggressively. Apple cannot afford to sit around and idle as Microsoft gets ready to push out its highly tablet orientated Windows 8 and well anticipated Surface line up.

 

Conclusion

Apple has to buck up. After years of not wanting to give iOS and its iDevices line up a thorough refresh, it is beginning to look old and dated especially when placed next to its competitors. Apple has to take a good look at themselves and the competition to stay relevant and put themselves back on the cutting edge.

The iPhone 5 will boost their figures for the short term but if nothing changes with iOS7 and the iPhone 5S/6, expect more companies than just Samsung to leave Apple in its shadow.

I look forward to iOS7 with great interest. Do something that would make me excited about iPhones again.

Dave Junia

Dave Junia | administrator

Analyst. Cyclist. Photographer

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