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The Android Upwards Push

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With the feverish hype surrounding the iPhone’s launch into the consumer marketplace last Friday, TMV thought it apt to dig deeper and look at what new developments are happening with Google’s Android mobile operating system. TMV delves into the pros and cons for Apple’s iPhone and Google’s Android, with the aim of determining which will become the dominant global mobile phone platform in the next 5-year time frame.

Firstly, Apple managed to sell in excess of 1 million handsets over the weekend of its launch. Compared to the Palm Pre’s 100K sales in the US, it is commendable. But in the global scheme of things where does it sit? Utter peanuts in TMVs view. The current strategy Apple seems to be following makes it reliant on the ever-decreasing APRU we are witnessing in western markets. This is at the expense of focusing on where real growth is occurring at phenomenal levels.

The real growth in mobile subscribers and usage is the emerging markets. India has been experiencing more than 10 – 11 million new mobile subscribers per month for over two years. This is just one example of an emerging market – there are so many more. That is pretty much more than the whole of the western market combined. Western Markets are already experiencing over 100% subscriber penetration – so how much growth is there left? Very little in TMVs view.

Google’s Android platform on the other hand has numerous mobile phone manufacturers, including Motorola, Samsung, HTC, Sony Ericsson and others. Why does this matter? Well for starters Motorola has the 2nd largest market share in terms of handset owners in the territory of China. Samsung and HTC rule the Korean territory in terms of market share and the same goes for Nokia in India, China and Africa.

The only problem? Well, each of the aforesaid handset manufacturers along with others like Nokia keep missing the key area where the iPhone excels. It’s called “User Experience” folks. The majority of handset manufacturers have music propositions, but the experience for the user both on the non-music and music level alike is absolutely dismal!

I’ve come across too many western content owners stating falsities that the uptake of smart phones in emerging markets is minimal. Utter bullocks I suggest those of you that have this misconception get your bums off seats and go check out India, where most people listen to music from their mobile phones. In this same market Airtel (India’s largest telco) manages to serve music content using 20 different mobile consumption channels and made over $170 million last year selling music alone.

Furthermore, TMV have had an unnamed source from Nokia confirm that Western markets will soon witness shortages in its lower end smart phone range due to high demand in India and other emerging markets.

So regardless of the abysmal “User experience” of Nokia, Samsung, LG, Motorola et al handsets, their strategies have been focusing on the long-term growth markets. In turn this means they are and will be immensely better positioned to capitalize on rampant emerging market 3G rollouts and subscriber uptake whilst Apple and the iPhone are left competing for an ever decreasing and over penetrated western mobile marketplace.

Most large emerging markets will be ahead of the curve in terms of 3G uptake, subscriber numbers and smart-phones in comparison to our supposed traditional markets within the next five-year time frame. For example, as of March 2008, per capita ARPU spend on content in Nigeria of $20 per month was more than the UK and US combined.

So how is all of this relevant to Android versus iPhone? Quite simply it is this – Android is being implemented by all of the handset manufactures that command decent market share across emerging markets. In turn this means Google’s Android platform by default should within this five-year time frame possess an un-surmountable market share of mobile handset operating systems when compared to the iPhone on a global level.

Reinforcing this is the high price of the iPhone along with its accompanying non- competitive data and voice price plans. Both are non-viable for emerging markets, as instead of steep upfront prices and plans it is about scale on a massive level. By the time Apple begins to think strategically about emerging markets Android will be the default leader, with users accustomed to its “UI”. And it is TMVs view that as a consequence Apple will experience a very real problem in terms of spreading uptake of the iPhone into newer untested markets for its product base.

It cannot be doubted that yes, the iPhone wins hands down in the “User Experience” stakes by a mile. However, sadly user experience is not the tool that will win this battle. Whether we like it or not, it is the ever-growing middle classes of these “emerging markets” that will soon be ahead of us in the mobile technology stakes. So, will we in the west become the equivalent of “mobile peasants” in terms of the evolution of the mobile ecosystem? I’ll leave you to decide but I know where I would be putting my investment money…

 

 

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