Apple vs. android

MKTG/267
IBS Center for Management Research
Android Vs iOS: Mobile Operating System Wars in 2010
This case was written by Adapa Srinivasa Rao, under the direction of Debapratim Purkayastha, IBS Center for
Management Research (ICMR). It was compiled from published sources, and is intended to be used as a basis for class
discussion rather than to illustrate either effective or ineffective handling of a management situation.
2011, IBS Center for Management Research. All rights reserved.
To order copies, call +91-08417-236667/68 or write to IBS Center for Management Research (ICMR), IFHE Campus, Donthanapally,
Sankarapally Road, Hyderabad 501 504, Andhra Pradesh, India or email: info@icmrindia.org
www.icmrindia.org
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MKTG/267
“Google and Apple are playing a chess game, and everyone else is playing catch-up.”1
- Scott Schwarzhoff, vice-president of marketing, Appcelerator2
, in 2010.
“It’s a software platform war. The fight is over who will create the most powerful ecosystem of
developers, users, and mobile devices. Indeed, the reason the fight has gotten so nasty is because
history tells us that in such a fight, one platform typically dominates the market (see Microsoft vs.
Apple and IBM, eBay vs. Yahoo Auctions and Auction Universe, Google vs. Yahoo and
Microsoft).”3
- Fred Vogelstein, Wired Magazine4
, in 2010.
INTRODUCTION
On May 10, 2010, The NPD Group Inc.5
(NPD), a leading market research company, said that
Android, the mobile operating system had overtaken the iOS, the default operating system of the
iPhone, Apple Inc.‘s (Apple) mobile phone, in the US market for the first quarter of 2010.6
The
Android operating system, owned by the Open Handset Alliance7
(OHA) and backed by Google
Inc. (Google), had moved into the second position with a market share of 28% next only to the
BlackBerry OS (BBOS) of Research in Motion Limited‘s8
(RIM) BlackBerry smartphone devices,
NPD said. However, RIM‘s operating system still commanded a 36% share in the US market. The
growth of Android was considered unprecedented in the field of mobile operating system. Android
had achieved the feat by replacing iOS in the US market within two years of its launch in October
2008. Many analysts said Android would replace iOS, which till then, had been considered the best
mobile operating system. Google launched its own mobile operating system which was to be
distributed to mobile handset manufacturers free of cost to control the smartphone business.
Google‘s entry into the mobile operating system market became imminent with many people all
1
Olga Kharif, ―Google‘s Android Gaining on Apple via Developers,‖ http://www.bloomberg.com, June
24, 2010.
2
Appcelerator is a technology company headquartered in California, USA. It helps Web developers create
Mobile, Tablet, and Desktop applications.
3
Fred Vogelstein, ―Letter From Silicon Valley: Doing the Math on Android vs. Apple,‖ www.wired.com,
July 28, 2010.
4
Wired is an American technology magazine and online periodical. It reports on issues like the effects of
technology on culture, economy, and politics.
5
NPD Group Inc., headquartered in Port Washington, USA, is a leading market research company.
6
―Android Overtakes iPhone,‖ www.smh.com.au, May 11, 2010.
7
Open Handset Alliance is a consortium of mobile operators, software companies, and handset
manufacturers. It was established in November 2007 with 34 members led by Google with the motto of
developing open standards for mobile devices.
8
Research in Motion Limited, headquartered in Waterloo, Ontario, Canada, is a mobile phone company
noted for its BlackBerry range of smartphones. For the fiscal year 2009, its revenue was US$ 11.065
billion.
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over the world starting to browse the internet on their mobile phones. Many analysts were initially
skeptical about the Android‘s chances of success. They said Android would be a wasteful
investment for Google, which did not have much experience in developing operating systems to
compete with giants like Apple and RIM. James Faucette, an analyst at Pacific Crest Securities,
Inc.9
(Pacific Crest), said, ―For Google, Android is a cash drain. They are going to lose money on
Android as an operating system. They hope to make it up from the services that they are delivering
through their infrastructure and servers.‖10
But Android silenced critics by growing rapidly and
proving to be a viable alternative to Apple‘s iOS.
However, in October 2009, Gartner Inc.11
(Gartner) predicted that the Android software would
overtake iOS by 2012.12
This new projection by Gartner raised expectations about Android.
Apple‘s iOS had, till then, been the choice of millions of smartphone users all over the world as
well as third party application developers. As the operating systems used in mobile phones became
the main domain in the battle for dominance in the mobile sector, the growth of Android put more
pressure on Apple, which had been basking in success after emerging as the world‘s biggest
technology company in terms of market capitalization, overtaking Microsoft Corporation13
(Microsoft).14
Android‘s rapid growth was attributed to many factors. The most important of these was the
advantage Android had over iOS by virtue of being an open source operating system. iOS, on the
other hand, was a closely guarded proprietary operating system used in the products of a single
firm. Many third party application developers started to prefer Android to iOS due to the flexibility
it gave to them in developing applications. Another factor attributed for the growth was the
adoption of Android by some major handset manufacturers like HTC Corporation15
(HTC) and
Motorola Inc.16
(Motorola) which, in turn, had tie-ups with some major telecom operators like
Verizon Wireless17
(Verizon). Android also gave operators some flexibility -- some of the services
like email could be customized to be offered by the operators themselves. This adoption of
Android by major handset manufacturers helped it become the operating system in many top
smartphones. The popularity of the Android software could be gauged from the fact that five of the
ten top smartphones for the year 2009 were running on it, overshadowing iOS and BBOS (Refer
to Exhibit I for top ten smart phones for the year 2009).18
9
Pacific Crest Securities Inc., headquartered in Portland, Oregon, USA, is an investment-banking firm that
provides financial advisory services to public and privately held technology companies.
10
Miguel Helft and Saul Hansell, ―Google Introduces an iPhone Rival to Whims,‖ www.nytimes.com,
September 24, 2008.
11
Gartner Inc., headquartered in Stamford, Connecticut, USA, is a technology research and advisory firm.
12
Erika Jonietz, ―Droid Set to Take on the iPhone,‖ www.technologyreviewonline.com, October 28, 2009.
13
Microsoft Corporation, headquartered in Redmond, Washington, USA, is one of the leading technology
companies specializing in software products. For the fiscal year 2009, its revenue was US$ 58.437
billion.
14
Charles Smith, ―Microsoft Dethroned as Apple Becomes Largest Tech Firm,‖ www.ibtimes.com, May
26, 2010.
15
HTC Corporation, headquartered in Taoyuan, Taiwan, is a manufacturer of smartphones. For the fiscal
year 2009 its revenue was US$ 4.55 billion.
16
Motorola Inc., headquartered in Schaumburg, Illinois, USA, is a major telecommunications company. For
the fiscal year 2009 its revenue was US$ 22.044 billion.
17
Verizon Wireless, headquartered in Basking Ridge, New Jersey, USA, is a leading telecommunications
company and has the largest mobile telecommunications network in the US.
18
―Top Ten Best Coolest Smartphones of 2009: Review of Reviews -- iPhone, Droid, Palm Pre, and
BlackBerry Bold 9700 Top List,‖ www.wirelessandmobilenews.com, December 20, 2009.
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Apart from emerging as the top mobile operating system, Android was also being increasingly
being used in many tablet computers which were getting more popular by the day. Google said that
it was planning to introduce a full-fledged operating system for laptops and netbooks called
‗Google Chrome OS‘19
and that it had plans to merge both Android and Chrome to create a single
operating system that could be used in multiple computing devices ranging from smartphones to
laptops. Apple, on the contrary, had different kinds of operating systems for its smartphones and
other computing devices, which could make the integration of two platforms cumbersome. Google
also launched its own smartphone branded as ‗Nexus One‘ so as to compete with Apple better.
But analysts said the battle between Android and iOS was far from over -- Android still could face
many challenges to its growth. iOS, since its launch in 2007, had grown to become almost
unchallenged in the smartphone market with its touch capabilities unrivalled by any other mobile
operating system. Many analysts said that despite its innovative features, Android was no match
for iOS where its touch capabilities were concerned. The same touch capabilities of Android had,
however, given it an edge over other mobile operating systems like Symbian20
. The new version of
iOS called ‗iOS4‘, which was released in 2010 was expected to give more competition to Android.
Some industry experts said that many Apple fans might have postponed their purchase of Apple
products anticipating the release of the much more advanced iOS4 and this might have caused the
share of iOS to go down temporarily
BACKGROUND NOTE
Apple
Apple, initially called Apple Computers Inc., was established on April 1, 1976, and incorporated
on January 3, 1977, as a maker of personal computers. It was founded by Steve Jobs, Steve
Woznaik, and Ronald Wayne and headquartered in Cupertino, California, USA. Apple‘s initial
products were basic desktops like Apple I and Apple II which were mainly focused on the business
segment. The growth of the company continued till 1980 owing to the success of its initial
launches. But Apple then faced some stiff competition from other leading players in the market at
that time like International Business Machine Corporation21
(IBM). Apple bounced back with the
launch of its Lisa computers in 1983 and Macintosh computers in 1984. The Lisa and Macintosh
computers were considered as milestones in the computing industry because of the introduction of
the Graphical User Interface (GUI) which made computing more user friendly. .
Despite introducing the groundbreaking user interface, the Lisa and Macintosh computers were a
commercial flop. Apple reached its nadir with the expulsion of Jobs in 1985 by its then CEO John
Sculley. Many analysts predicted that Apple would be wound up or sold off. It lost its position in
the personal computing industry to Microsoft which later emerged as Apple‘s arch rival. However,
Apple‘s fortunes revived with the return of Jobs as its CEO in 1996. Upon his return, Jobs
launched a new operating system called Mac OS X. Apple launched another important product, the
iMac, in the year 1998. The iMac was a good commercial success. After the success of the iMac,
Apple tried its luck as a maker of consumer electronics goods with the launch of its revolutionary
portable digital music player, the iPod, in 2001. With the iPod, Apple introduced the click wheel
which made the access of music files very easy. The iPod proved to be a resounding success and
Apple was reborn as a maker of consumer electronics goods. The company removed the word
19
Google Chrome OS is a Linux-based operating system designed to work exclusively with web
applications. It is based on the open-source Chromium OS.
20
Symbian is one of the operating systems used by Nokia for its mobile devices. As of 2010, it was the
largest mobile operating systems in the world and was run exclusively on ARM processors.
21
IBM, headquartered in Armonk, New York, USA, is one of the leading information technology
companies in the world. For the fiscal year 2009 its revenue was US$ 103.630 billion.
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‗Computer‘ from its name and became Apple Inc. in January 2007, to mark its transition into a
consumer electronics goods company. Apple entered the mobile phone market with the launch of
its iPhone in June 2007.22
Like its previous products, the iPhone shook up the mobile phone market
with its new multi-touch user interface which facilitated many tasks on the mobile phone like
complete Internet access. .The iPhone rewrote the rules of the high-end mobile phone market with
its huge success. The killer feature in the product was its operating system, the iOS, which was a
complete mobile operating system unlike the operating systems available on other mobile phones
at that time.
Google
The roots of Google lie in a research project by two PhD students at Stanford University, Larry
Page (Larry) and Sergey Brin (Sergey) in 1996. Google pioneered a new technology called
‗PageRank‘ which determined the importance of the website by the number of pages and the
importance of the pages that linked back to the original site. This new technology was a shift from
the earlier method followed by other search engines which ranked the results by the number of
times the search terms appeared on the page. The primary domain of Google, ‗www.google.com‘
was registered in September 1997 and the company was incorporated in September 1998 at a
friend‘s garage in California, USA.
In 1999, the company moved its headquarters to Palo Alto, California, which was the home of
several other technology companies. Google started to sell advertisements associated with search
keywords, though with some initial opposition from the founders, Larry and Sergey. Thus began
Google‘s reliance on search related advertising for its revenues. This business model of Google‘s
was a huge success. From 2001, Google based its growth strategies on acquiring many small
companies. It added many other products to its product portfolio like Google Earth23
and
YouTube24
. Apart from acquiring other companies, Google also launched its own products like the
free webmail, called ‗Gmail‘ in April 2004. Gmail was also well received by the web community
due to the manifold increase in storage space provided by Google (initially one GB). The success
of Gmail made Google the undisputed leader on the internet, overtaking many other established
internet companies like Yahoo! Inc.25
(Yahoo).
Despite its dominant position on the internet, Google started facing competition from the mobile
phone companies which owned their own operating platforms. Due to the increase in mobile phone
penetration, people all over the world started using their mobile phones to browse the internet
rather than their personal computers. Google, therefore, had to make applications for its various
services to work on these various platforms. Developing applications for a variety of platforms
also proved to be cumbersome. Google decided to launch its own open source platform for mobile
phones, which would give the application developers the freedom to develop applications for
various mobile phones without depending on any handset manufacturer or service provider.26
Application developers had earlier had to depend on and adhere to the standards and conditions set
by the handset providers which owned their respective operating systems. Google expected that
this new open source platform would give it significant control over the mobile internet which was
gaining prominence. This step was also expected to relieve Google of having to develop
applications to different platforms.
22
―Company Overview,‖ www.google.co.in/intl/en/corporate.
23
Google Earth is a virtual globe, map, and geographic information application owned by Google.
24
YouTube is a video sharing website owned by Google. Users can upload, share, and view videos on the
website.
25
Yahoo! Inc., headquartered in Sunnyvale, California, USA, is an internet company which provides
services like search engine, webmail, online mapping, etc. For the fiscal year 2009 its revenue was US$
6.460 billion.
26
Geoff Duncan, ―T-Mobile Launching First Android Phone?‖ www.digitaltrends.com, August 15, 2008.
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As of September 2009, the revenue of Apple was US$ 42,905 while that of Google was US$
23,650 (as of December). The huge gap in the revenues of the two companies could be attributed
to the success of some of Apple‘s products like the iPod and the iPhone. Google‘s revenue, was on
the other hand, mostly advertisement-based (Refer to Exhibit II for the key financials of Apple and
Google as of 2009).
A BRIEF NOTE ON ANDROID AND IOS
Android
Android was an open-source operating system for mobile devices owned and developed by OHA.
In its basic form Android was developed by Android Inc., which was later acquired by Google in
the year 2005.27
Google later started developing a full-fledged Linux-based operating system for
mobile phones based on its experience in developing applications for other mobile phone operating
systems. The objective of developing a new operating system was to come up with a mobile phone
operating system that would be flexible and upgradable easily multiple times. In November 2007,
the OHA was formed by several software and mobile handset manufacturing companies with the
goal of developing open standards for mobile devices.28
OHA later unveiled its product Android, a
full featured mobile operating system. Android was made open-source in October 2008, so that
private companies could develop their own applications and extensions and sell them. The first
version of the operating system, Android 1.1, was released in February 2009 and an update
Android 1.5 was released in April 2009. Another major upgrade to the software was made in
October 2009. The Android 2.2 was released in May 2010. A major feature of the Android
operating system was that multiple upgrades were released in the same year unlike other mobile
operating systems like iOS which were mostly upgraded once in a year. Over time, many handset
manufacturers embraced Android for their mobile phones. By February 2010, the market share of
Android increased to 6%.29
Gartner predicted that Android would become the second most popular
mobile operating system overtaking BBOS and iOS by the year 2012.30
iOS
iOS was the default operating system for many of Apple‘s products like the iPhone, iPod Touch,
and iPad. When it was released in June 2007, it didn‘t have any name of its own and was simply
called ‗OS X‘, with reference to its parent software Mac OS X, which was used in the Macintosh
range of personal computers made by Apple. Unlike some other mobile operating systems which
were being made open-source, Apple‘s iOS was a tightly controlled proprietary operating system.
At the time of its launch, even third-party applications were not supported. Later in March 2008,
Apple released a software development kit31
(SDK) for software developers to enable them to
develop applications for the ‗OS X‘. At the time of the launch of the SDK, OS X was given a
formal name -- ‗iPhone OS‘ which was again renamed as ‗iOS‘ in 2010. The new iOS became
extremely popular among consumers due to its intuitive touch responsiveness. Many analysts said
that there was no other software which could respond to touch the way iOS did. Successive
versions of the iOS were later released for the iPhone 3G and the iPhone 3GS. Application
27
Gareth Beavis, ―A Complete History of Android,‖ www.techradar.com, September 23, 2008.
28
―A Short History of Google Android,‖ www.brighthub.com/mobile/google-android/articles/18260.aspx.
29
Rachel King, ―Nokia, Symbian Still Lead Smartphone Market, Gartner Says,‖
www.zdnet.com/blog/gadgetreviews, February 23, 2010.
30
Matt Hamblen, ―Android to Grab No. 2 Spot by 2012, Says Gartner,‖ www.computerworld.com, October
6, 2009.
31
The software development kit is a set of development tools which will facilitate the development of
applications by third party developers for an operating system, software package, video game console,
etc.
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developers took keen interest to develop applications for iOS due to its growing popularity among
high-end users who would be willing to pay for the applications. The number of applications
available for iOS had increased to 225,000 by June 2010 -- the highest for any mobile operating
system -- and the number of downloads from Apple‘s App Store32
,33
had reached five billion. As
of February 2010, iOS had a market share of 8.7% in the smartphone market.34
iOS 4 was released
in June 2010 for the iPhone 4.
THE SLUGFEST
The market for the smartphone operating systems had long been dominated by players like Nokia
Corporation35
(Nokia) with its Symbian operating system which enjoyed a dominant position.
Analysts attributed the dominance by a single player mostly to the lack of any serious competition
in the mobile operating system area (Refer to Exhibit III for market share of various mobile
operating systems). All this changed when Apple entered into the smartphone business to realize
its dream of emerging as a serious consumer electronics company. Apple was one of the few
technology companies which entered the mobile phone space with its iPhone and its own
proprietary operating system ‗iOS‘. Some other companies like Google whose main focus was on
dominating the internet space, entered the mobile space by launching their own mobile operating
system which could be used by other mobile phone companies in the market. It became very
important for Google to enter the mobile operating system market as many people were starting to
use the internet through their mobile phones.
As the competition in the mobile phone market increased, the race for becoming the top player in
the field of mobile operating systems too grew fiercer. The advancements in the area of mobile
hardware by almost all the major players made it difficult for mobile phone companies to
differentiate themselves from other players. Analysts said the war for the top spot in mobile
phones had therefore moved to the software front. The operating system used to run the mobile
phone became the main area for the mobile phone companies to differentiate themselves from the
others. While some players started developing their own high-end operating systems for their
mobile phones, other companies started relying on third party operating systems for their phones.
The iOS that Apple used in its iPhone and some of its other gadgets like the iPod Touch and the
iPad, was released in 2007 with the launch of its iPhone. iOS, which was highly touch responsive
when compared to existing mobile operating systems, was an instant success in the market and
started gaining quick market share. The number of applications which were available for the iOS --
considered one of the benchmarks for the popularity of any mobile operating system -- increased
and its market share also rose significantly. Though the market share of iOS was still negligible
when compared to market leaders like Symbian, the numbers attached to iOS gained significance
due to the lucrative high-end user base of iOS when compared to other mobile operating systems
(Refer to Exhibit IV for the competing platforms of Android and iOS).
OHA, which was led by Google, released its mobile operating system Android in February 2009.
Though it met with a lukewarm response at the time of its release, Android started to gain market
share as more and more handset manufacturers like HTC and Motorola began to embrace it for
their smartphones. Companies like HTC did not have their own operating systems and so adopted
32
Apple‘s App Store is a part of the iTunes Store which allows the users of various Apple products like the
iPhone, iPod Touch, and iPad, to download applications. The applications available through the App
Store are developed using the iPhone SDK.
33
―Apple Says App Store has Made Developers Over $ 1 Billion,‖ www.appleinsider.com, June 7, 2010.
34
Rachel King, ―Nokia, Symbian Still Lead Smartphone Market, Gartner Says,‖
35
Nokia Corporation, headquartered in Espoo Finland, is the world‘s leading mobile handset company. For
the fiscal year 2009 its revenue was € 40.99 billion.
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Android and made it popular. Even though the growth of Android was mild in the initial days of its
launch, it started to grow much faster than any other mobile operating systems later.36
The success
of the HTC Hero smartphone, which first made Android popular, unleashed the potential of
Android.37
Analysts said that the success of HTC Hero made Android one of the contenders for the
top position among the mobile operating systems, challenging iOS.
Further magnifying the struggle between the two mobile operating systems was the report by NPD
which said that Android had overtaken iOS in the highly competitive US smartphone market for
the first quarter of 2010.38
But the US market was still dominated by BBOS with its market share of
36%. The report was based on the results of online consumer surveys which were conducted every
month but not on actual sales. Apple dismissed the report of NPD totally. Commenting on the
report, Apple‘s representative Natalie Harrison said, ―This is a very limited report on 150,000 U.S.
consumers responding to an online survey and does not account for the more than 85 million
iPhone and iPod touch customers worldwide.‖39
Though Apple brushed the report aside saying it
was incomplete, many industry observers opined that the threat to Apple‘s iOS was real and
happening. The report also gained significance as this was the first time that Android had
overtaken iOS. The strong sales of Motorola‘s Droid and HTC‘s Droid Eris models were cited as
the reasons for Android overtaking iOS in the US market.40
Motorola‘s Droid was one of the most
successful smartphones powered by Android. According to one estimate, Droid had sold nearly
1.05 million units in the first 74 days of its launch in November 2009, when compared to 1 million
units of the iPhone after its first launch in 2007.41
NPD‘s report was also in tandem with an earlier
report by Gartner in 2009 which forecast that Android would be the second most popular mobile
operating system by 2012 after Symbian.42
Gartner forecast that Android would overtake iOS in
2009 itself, when Android was enjoying a market share of less than 2%.
COMPARING ANDROID AND IOS
Several factors were cited as the reasons for the faster growth of Android as compared to iOS. The
NPD report said that apart from being embraced by mobile handset manufacturers like HTC and
Motorola, it was the aggressive marketing by mobile operators like Verizon, which promoted
Android by giving attractive price offers for Android-powered smartphones that had led to the
success of Android. Google had tied up with Verizon in 2009 to face competition from Apple
which had exclusive tie-ups with operators like AT&T Inc.43
(AT&T).44
The tie-ups with operators
like Verizon helped in developing smartphones which were preloaded with Android applications.
This served to increase the market share of Android. Ross Rubin, NPD‘s executive director, said,
36
Rob Jackson, ―Android Growing Ridiculously Faster than All Other Mobile Platforms (In the US),‖
www.phandroid.com, March 10, 2010.
37
Katherine Hannaford, ―HTC Hero Wins Gadget of the Year and Phone of the Year at T3 Gadget
Awards,‖ www.t3.com, October 14, 2009.
38
39
Scott Lowe, ―Android Overtakes the iPhone: Report Says Android has Surpassed the iPhone in U.S.
Sales,‖ www.ign.com, May 11, 2010.
40
41
Peter Farago, ―Day 74 Sales: Apple iPhone vs. Google Nexus One vs. Motorola Droid,‖
http://blog.flurry.com, March 16, 2010.
42
Matt Hamblen, ―Android to Grab No.2 Spot by 2012, Says Gartner,‖ www.computerworld.com, October
6, 2009.
43
AT&T Inc., headquartered in Dallas, Texas, USA, is one of the major telecommunications company in
USA. For the fiscal year 2009 its revenue was US$ 123.018 billion.
44
Stacey Higginbotham, ―Google Lines Up with Verizon to Fight Apple,‖ http://gigaom.com, October 6,
2009.
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―Carrier distribution and promotion have played a crucial role in determining smartphone market
share. Carriers continue to offer attractive pricing for devices, but will need to present other data-
plans to attract more customers in the future‖.45
Despite having exclusive tie-ups with operators like Verizon in the US, Android being an open
source operating system was available to many other networks both in the US and all over the
world. iOS, on the other hand, couldn‘t be used on multiple networks due to Apple‘s exclusive tie-
ups with a single operator in many international markets. Analysts said that the exclusive tie-up
that Apple had with AT&T in the USA and in many other international markets was actually
stifling the growth of iOS when compared to other mobile operating systems which were available
with multiple carriers. It was expected that the market share of iPhone could actually double if
Apple started selling the iPhone through multiple carriers. Kathryn Huberty, an analyst at Morgan
Stanley46
(Morgan Stanley), said, ―In the top six iPhone markets that are still exclusive, we believe
that Apple‘s market share could rise to 10%, on average, in a multiple carrier distribution model
from 4% today. These six markets represented almost 70% of iPhone shipments in
C2Q09.‖47
Some other analysts said that exclusive tie-ups with operators could actually facilitate
better marketing support from the operators and Apple would benefit in the long run.48
Apple had
extracted a lot of freedom from AT&T at the initial launch of the iPhone regarding the network
standards as well as preference in marketing of the iPhone. Apple was also expected to do away
with the exclusive tie-ups with some operators and thereby make the iPhone available to many
other operators by the end of 2010. Analysts said that this could increase the competition for
Android. Apart from the exclusive tie-ups with the operators in various international markets,
Apple‘s iOS was not accessible to multiple smartphone and other computing device manufacturing
companies as it was exclusively used for products made by Apple which was another limiting
factor for the growth of iOS. The chances of Apple making iOS available to other handset
manufacturers were also bleak. Some observers hoped that Apple‘s new products like the iPad
which also used iOS would not be restricted to a single operator. Only then might it result in the
proliferation of iOS among a wider user base.
Android was an open source operating system which gave third party developers more freedom in
developing applications unlike iOS which was a closed and well-guarded operating system. Apple
initially wanted its iOS to be a closed operating system where any online program could be run
only on its inbuilt web browser rather than having third party applications that could be
downloaded by the users directly.49
Though Apple later allowed third party developers to develop
applications for iOS, it placed a lot of restrictions on them. For example, third party developers
were restricted from discussing Apple‘s SDK openly. Many analysts said that those kinds of
restrictions on third party developers could pose problems for the future growth of applications for
iOS.50
On the other hand, it was very easy for third party application developers to get their
applications approved for Android as it was an open source operating system.51
Even though
Apple‘s App Store had the largest application base for any mobile operating system in the world,
the availability of applications for Android was growing at a much faster pace than that for iOS.
45
―Android Overtakes iPhone in US,‖ www.hindustantimes.com, May 11, 2010.
46
Morgan Stanley, headquartered in New York City, New York, is a global financial services firm.
47
Dan Frommer, ―iPhone Market Share Could More Than Double when Apple Drops AT&T Exclusivity,‖
www.businessinsider.com, October 2, 2009.
48
―Five Top US Operators Pick Samsung Galaxy S Phones,‖ http://economictimes.indiatimes.com, June
29, 2010.
49
Egan Orion, ―Apple Stifling Iphone Apps Developers,‖ www.theinquirer.net, August 26, 2008.
50
Amy Vernon, ―Is the Android truly Open Source,‖ www.networkworld.com, May 5, 2010.
51
Kevin Schram, ―Android Market Has 30,000 Apps [Android Apps Market Seeing Tons of Growth,
Outnumbered by iTunes Five To One],‖ http://nexus404.com, March 16, 2010.
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The number of applications available on Android Market52
grew from just 10,000 in September
2009 to 27,243 in April 2010, which made Android Market one of the fastest growing mobile
application stores.53
The number of applications added to Android Market per month was also
growing at a phenomenal rate from just 1,558 in July 2009 to 9,330 in March 2010 (Refer to
Exhibit V for growth in the number of applications added to Android market).
Analysts said this growth of Android Market and Apple‘s rigid approval process for applications
on its App Store could pose serious problems for iOS as the number of applications available for
any mobile operating system showed the popularity of that operating system. The growth of
Android Market could also hit the profits of Apple as the mobile application market was expected
to reach US$ 15 billion by 2013.54,55
The growth numbers for the new acquisitions for iOS and
Android from June 2010 to November 2010 in the US market also showed that consumers were
favoring Android over iOS. The number of new acquisitions for iOS was stagnating while it was
growing for Android (Refer to Exhibit VI for US smartphone operating system share from June
2010 to November 2010). Though Apple and RIM were reported to share 70% and 80%
respectively of their software application revenues with the developers56
the balance amount left
for handset manufacturers was said to have a major share in their revenues. Apple and some
analysts supported the rigid approval norms for applications for iOS stating that this would
facilitate and protect the customers from some unwanted, fraudulent, and low quality applications
being sold on its App Store. Steve Jobs, CEO of Apple, said Apple could not approve the sale of
fraudulent and porn related applications for iOS on their App Store unlike Android. There were
instances of customers suffering due to the posting of some fraudulent applications related to
banking, pornography, etc. on Android Market. Some analysts said that this lack of monitoring of
the applications sold on Android Market could prove detrimental to Android in the long term as
customers started to feel the pinch as most of the internet access on the mobile phones was through
applications rather than directly through the phone‘s default browser.
Another reason attributed to Android‘s success was Android‘s unique focus both on the
smartphone tasks and communications as well as on third party applications. In stark contrast,
other operating systems like Nokia‘s Symbian focused exclusively on smartphone tasks. Ken
Dulaney, an analyst at Gartner, said, ―Android has blended a focus on applications and tasks pretty
well.‖57
On the other hand, iOS was focused mainly on applications for its growth without much of
a focus on smartphone tasks and applications. Another reason cited by the analysts for the greater
acceptance of Android by third party developers was the possibility of its being customized. When
Motorola‘s Droid was used, the mail application used in it was customized for the customers of
Verizon. Though Google mail might be the underlying foundation for mail, it could be customized
as Verizon mail. The same customization was true for other services like social networking and
online search. Commenting on the customization that was possible with Android, Daniel Roth, a
columnist at the Wired Magazine, remarked, ―Those hoping for a new gadget to rival the iPhone
52
Android Market was an online store for the sale of applications developed by third party developers for
Android based devices.
53
Sarah Perez, ―Android App Growth on Rise: 9000+ New Apps in March Alone,‖
www.readwriteweb.com, April 6, 2010.
54
Sarah Perez, ―Android App Growth on Rise: 9000+ New Apps in March Alone,‖
55
Kevin Schram, ―Android Market Has 30,000 Apps [Android Apps Market Seeing Tons of Growth,
Outnumbered by iTunes Five To One],‖ http://nexus404.com, March 16, 2010.
56
Jennifer LeClaire, ―Google Store Will Help Android Developers Earn Cash,‖ www.newsfactor.com,
January 2, 2009.
57
Matt Hamblen, ―Android to Grab No.2 spot by 2012, Says Gartner,‖ www.computerworld.com, October
6, 2009.
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finally understood that Google had something radically different in mind. Apple‘s device was an
end in itself — a self-contained, jewel-like masterpiece locked in a sleek protective shell. Android
was a means, a seed intended to grow an entire new wireless family tree.‖58
Apple, since the success of its iPod and iTunes, had built up its own ecosystem for the sale of
software applications online. Following the tradition of the iPod and iTunes, which followed
highly controlled access for their users, Apple had built up the iOS ecosystem based on
applications for almost every specific utility rather than having the default phone browser to be
used for accessing the internet. This was in contrast to Google‘s strategy of making most of its
services available through the general built-in browser in the phone rather than specific
applications for every kind of service. Some analysts said that this could prove detrimental to
Android as many people had started feeling comfortable accessing many online services through
applications rather than the phone browser. Some industry observers felt that it would prove to be
very tough to change the habits of the users and this would give iOS the edge.
Another area where many analysts felt iOS could score over Android was the touch responsiveness
of iOS. Having been exclusively developed to meet the multi-touch capabilities of the iPhone, iOS
was considered as being far superior in this aspect. Though Android also supported multi-touch
capability, analysts said that it could not rival iOS in its touch responsiveness. The problem was
compounded by the fact that the hardware and software were not manufactured by a single player
in the case of Android and this posed some synchronization problems.
THE FIGHT NOT LIMITED TO SMARTPHONES ALONE?
The fight between iOS and Android was not just limited to smartphones. Many other portable
devices like tablet computers and netbooks were being developed by technology companies around
the world, enabling consumers to access the internet on the go as well as facilitating other tasks
like gaming, reading of ebooks, basic computing, etc. The demand for such portable computing
devices was attributed by analysts to the low power consuming chips that these devices used and
the extended mobility offered by such devices to consumers. Analysts opined that the future of
computing rested on many such portable devices apart from mobile phones. Though iOS was also
initially used in Apple‘s iPod Touch apart from the iPhone, it was not considered as a reliable
computing device as it did not have seamless internet access. iOS was later modified by Apple to
be used on some of its portable devices like its iPad, The iPad, a tablet computer, was released as
midway between a smartphone and a laptop to facilitate tasks like reading of ebooks, accessing the
internet, and playing games. Some models of the iPad could access the 3G59
telecom networks and
have seamless internet connectivity, allowing the consumers to download music, games,
periodicals, etc. almost seamlessly. Soon after its release in early 2010, it was very well received
by the consumers. Apple sold nearly two million iPads within the first two months of its launch.60
Apple and some industry experts felt that the iPad would boost the fortunes of iOS and help it give
tough competition to Android.
Responding to the iPad, OHA also started releasing tablet computers using the Android operating
system. Notable among these were the Cisco ‗Cius‘ by Cisco Systems, Inc.61
(Cisco) and the Dell
Streak by Dell Inc.62
(Dell).63,64
Dell said it was planning to launch more such tablets in the near
58
Philip Elmer-DeWitt, ―Android vs. iPhone: ‗This is Where the Pain Happens‘,‖
http://tech.fortune.cnn.com, June 25, 2008.
59
3G refers to the third generation mobile technologies which deliver high speeds of data connectivity
through the better and more efficient use of the spectrum.
60
―iPad Sales Top Two Million,‖ www.thesun.co.uk, May 31, 2010.
61
Cisco Systems, Inc., headquartered in San Jose, California, USA, was a consumer electronics, networking
and communications technology and Services Company. For the fiscal year 2009 its revenue was US$
36.117 billion.
62
Dell Inc., headquartered in Round Rock, Texas, USA, was a multinational information technology
corporation. For the fiscal year 2009 its revenue was US$ 61.101 billion.
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future to take a share in the ever expanding market for mobile devices. Though the sales of
Android-based tablet computers was still not promising when compared to the iPad, analysts said
that the expected launch of many new Android tablet computers would help increase the usage of
Android.
Rather than being a niche market segment, tablet computers like the iPad and the Cius were
expected to cannibalize the market share of desktops and laptops. Market research conducted at
Barclaysplc65
(Barclays) predicted that there would be strong sales of 15 million for tablet
computers in 2010 and that it would rise even further to 18-25 million in 2011.66
The rising market
for these tablet computers was expected to take the battle between various mobile operating
systems into unforeseen territories as these tablet computers mostly used mobile operating systems
which were light and simple. The use of comparatively smaller operating systems like Android on
tablet computers and netbooks was made possible by the advent of cloud computing67
where much
of the processing and storage of data was done in some remote servers, which eased the pressure
on the actual computing devices. Some analysts even predicted that tablet computers could boost
cloud computing rather than it being the other way around.68
The thumping success of the iPad could prove to be detrimental for Android as it would take some
more time for Android tablets to catch up with iPad, said some analysts. They contended that
Apple‘s experience in making bigger computing devices like laptops and desktops could give it an
edge in the tablet space. Devices like tablet computers needed much more standardized operating
systems like iOS or Windows rather than a purely open source operating system like Android as
people demanded more reliability in their use and data security. Even though some tablet
computers were being released which worked on Android, Android was lagging behind iOS, they
said. Other industry observers felt that even though Apple had been initially successful in the
market for tablet computers, the bevy of cloud computing services which were expected to be
offered by Google could tilt the balance in favor of Android in both smartphones and tablet
computers.69
Google announced its plans to come up with a full-fledged operating system for netbooks and
other big computing devices like laptops and desktops called ‗Chrome OS‘.70
Google co-founder
Sergey also said they were planning to merge both the Android and Chrome operating systems
sometime in the future and to create a single major operating system which could be used in
multiple computing devices ranging from smartphones to laptops.71
Analysts said that the creation
of a single operating system by merging Android and Chrome OS could actually increase
competition for iOS as Apple used different operating systems for its laptops and desktops called
‗Mac OS‘ and did not have any plans to converge them into a single major operating system. But
63
―Cisco Cius: A New 7 inc Android Tablet,‖ www.android-tablet.org, June 30, 2010.
64
―Dell Launches Streak Tablet PC Across Europe,‖ www.news.bbc.co.uk, May 25, 2010.
65
Barclays plc, headquartered in Tower Hamlets, London, UK, was British financial services firm with
international operations. For the fiscal year 2009 its revenue was £29.954 billion.
66
―2011 Tablet Sales will Hurt Intel and Microsoft,‖ www.android-tablet.com, July 9, 2010.
67
Cloud computing refers to internet based computing where the software, data storage, and processing
power are provided to the consumers on demand through the internet rather than directly on the device
itself.
68
Lucas Mearian, ―Apple iPad, Other Tablet PCs, to Drive Cloud Storage,‖ http://news.techworld.com,
April 12, 2010.
69
―Chrome, Android, and The Cloud,‖ www.avc.com, September 2, 2008.
70
MG Siegler, ―Google Drops a Nuclear Bomb on Microsoft. And it‘s Made of Chrome,‖
http://techcrunch.com, July 7, 2009.
71
Andrew Nusca, ―Sergey Brin: Google Android, Chrome OS Likely to Converge,‖ www.zdnet.com,
November 23, 2009.
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some other technology analysts said that even though Apple had different operating systems, iOS
had actually been developed from the earlier operating systems of Apple used for desktops and
their seamless integration would not pose any problems in the future.
Google also released its own branded mobile phones into the market in order to have
control over both the hardware as well as the software of the phones entering the market.
Google released its own handsets branded ‗Nexus‘. The first of the Nexus series of handsets called
‗Nexus One‘ was released in partnership with HTC in January 2010.72
While the core design and
research and development were done by Google, the manufacturing of the smartphones was
outsourced to HTC. Google decided to sell these own branded handsets through its website -- a
direct channel. Analysts said Google‘s decision to launch its own brand of handsets rather than just
supply its software was made to have the same kind of control over the design of both the
hardware and software that had contributed to Apple‘s huge success. The manufacture of both
the hardware and software had given Apple complete control over much of the design of the
handsets.
Another reason attributed for Google‘s decision to launch its own brand of handsets was the
company‘s desire to have an impact on and control over how mobile internet evolved. This became
necessary as more and more consumers mostly from the third world countries had started to access
the internet through their mobile phones as the penetration of personal computers was low in these
countries. Ben Schachter, an analyst at Broadpoint Am Tech Inc.73
(Broadpoint), said, ―If all of a
sudden everyone is getting on the internet via their mobile device, Google needs to make sure it
has an influence on that. They need to make sure they have influence on how the mobile web will
develop.‖74
Industry experts said that the launch of its own handset would give Google access to
valuable consumer data which could be used to sell advertisements to consumers at premium
prices.
The response to Google‘s handset offering was good from both analysts and customers. But many
analysts opined that it was far from being a real ‗iPhone killer‘. Commenting on the new handset,
Joshua Topolsky, the editor of the prominent technology blog, Engadget75
, said, ―The design and
feel of the phone is better – much better, in fact – and it's definitely noticeably faster than
Motorola‘s offering. But it‘s not so much faster that we felt like the doors were being blown off ...
don‘t get us wrong, the phone cooks – but it‘s not some paradigmatic shift for Android.‖76
Google
was also expected to launch another handset under its Nexus series. The other challenge for
Google, analysts felt, would be with regard to the distribution of its mobile phones. Even though
selling of its own branded smartphones over its website was easy, it would be difficult to build its
own retail distribution network. Analysts felt that the online sale of handsets might not be
sufficient to meet competition from rivals. Some analysts said it was unwise for Google to enter
the mobile handset business as retailing of handsets was a very complex business that needed
special skills in supply chain management and distribution which was not easy for a software and
Internet company to master. The fundamental reason to which the success of Apple was attributed
was always its excellent marketing skills despite its technological innovations. Many analysts said
that it would not be possible for Google to match the marketing skills of Apple or its charismatic
72
Bobbie Johnson, ―Google Challenges iPhone with Launch of Nexus One Mobile,‖ www.guardian.co.uk,
January 5, 2010.
73
Broadpoint Am Tech Inc., headquartered in Greenwhich, Connecticut, USA, is a technology research
firm.
74
―Google Phone set for Launch: Video Emerges of New Nexus One Mobile Dubbed iPhone-Killer,‖
www.dailymail.co.uk, December 16, 2009.
75
Engadget is a popular weblog and podcast about consumer electronics.
76
Bobbie Johnson, ―Google Challenges iPhone with Launch of Nexus One Mobile,‖ www.guardian.co.uk,
January 5, 2010.
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CEO Jobs. Responding to the competition from Android in the mobile phone space, Jobs exuded
confidence in Apple‘s marketing skills, saying it wouldn‘t be possible for Google to overtake
Apple. He said, ―There‘s not a chance that Google will match – or, at best, surpass – Apple‘s
prowess in the mobile phone space.‖77
According to some analysts, another area where Android had taken a lead over iOS was 4G78
. 4G
cellular services provided some exciting new services like online gaming, very high speed data
transfers, high definition video, etc. Android was already being offered on 4G networks. Android
entered the 4G space with the launch of HTC EVO which supported very high speed data through
4G.79
But Apple‘s iPhone 4 released in 2010 supported only 3G networks. Many exciting services
which needed very high speed data transfers like video conferencing were not available on iPhone
4. As Apple took a minimum of one year between the releases of its new versions of its operating
system, analysts said iOS might in fact be slow in the 4G race. The availability of Android on 4G
networks could also help Google to leverage on its cloud computing services as these services
needed very high speed data transfers. But the 4G technologies available in the market did not
meet the exact specification80
of 4G like LTE of International Telecommunication Union81
(ITU)
and the real 4G was still considered to be some time away. Though the first generation of the
iPhone was not even 3G enabled, the second 3G enabled model quickly caught up in the 3G race.
Some analysts said that Apple could make the future versions of iOS 4G enabled and that it would
not affect the growth of iOS much.
COMPETITION SET TO INTENSIFY
In addition to competing with each other, there was the possibility of the two operating systems
facing competition from other new players entering the field. Some other players, which hitherto
had not had their own operating systems, had decided to roll out their own operating systems.
Samsung Electronics82
(Samsung), for instance, announced its own open mobile platform for its
high-end smartphones called ‗bada‘ in November 2009.83
Samsung said this would help
application developers develop applications for its high-end smartphones. HTC also said that it
wanted to limit its reliance on third party mobile operating systems and to develop its own mobile
operating system or acquire any other existing mobile operating systems.84
The market leader,
Nokia was also expected to launch an improved and upgraded version of its Symbian OS called
Symbian^3 to face the competition from the new operating systems that were entering the
market.85
Apart from Symbian^3, Nokia and Intel Corporation86
(Intel) jointly announced a new
77
Quentyn Kennemer, ―Steve Jobs: ‗Not a Chance for Google to Leapfrog Apple,‖ www.phandroid.com,
May 24, 2010.
78
4G referstothe new range of cellular technologies like LTE and Flash-OFDM which provide very high
speed data speeds when compared to the 3G services. 4G was a successor the 2G and 3G families of
standards for cellular networks.
79
Ginny Mies, ―Sprint and HTC Reveal the EVO 4G Android Smartphone,‖ www.networkworld.com,
March 23, 2010.
80
As per the norms issued by ITU a 4G technology should be able to support data speeds up to 1Gbps and
the minimum data transfer speed should not come down below 100 Mbps.
81
ITU is a global agency of UNO which regulates information and communication technology issues.
82
Samsung Electronics, headquartered in Seoul, South Korea, was a leading electronics company. For the
fiscal year 2009 its revenue was US$ 117.4 billion.
83
―Samsung Launches Open Mobile Platform,‖ www.bada.com, November 10, 2009.
84
Anuroop Kaiser, ―HTC Tempted by the Fruits of its Own OS?,‖ www.technopedia.info, April 10, 2010.
85
―Symbian Announces Symvbian^3 and Immediately Gives it Away,‖ www.symbian.org/news-and-
media/2010/02/15, February 10, 2010.
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open source Linux-based mobile operating system called ‗MeeGo‘ which could be used in a
variety of mobile devices like smartphones, tablets, and netbooks.87
This new platform announced
jointly by Nokia and Intel was expected to work smoothly with Intel‘s own processors like their
new range of ultra-low-voltage Atom processors, mostly intended for mobile internet devices. In
late 2010, there were also rumors that Nokia, with competitors catching up fast on its mobile
operating system, was mulling whether to offer Windows Phone 7 of Microsoft for its
smartphones. Some analysts felt that the Windows Phone 7 was a good operating system that was
in search of distribution and Nokia had the products, scale, and global reach, and hence the
arrangement could work.88
Many other handset manufacturers like Motorola and HTC which adopted Android initially, said
that they too were planning to launch their own operating systems.
WHO WILL HAVE THE LAST LAUGH?
More than 296 million smartphones had been shipped in the year 2010, according to Gartner. Out
of this, Symbian, Android, and BBOS were the three leading players with market shares of 37.6%,
22.7%, and 16% respectively.89
While iOS was fourth in this list, it had emerged as the market
leader in the US market by the end of 2010. According to Nielsen90
, the November 2010 data
showed that iOS had a 28.6% market share in the US followed by BBOS with 26.1% and Android
with 25.8%.91
A big challenge for Google was to see whether a common mobile operating system cutting across
the lines of handset makers would make sense in the long term or not. Analysts said this question
was gaining importance given the newfound interest due to the newfound interest by mobile phone
companies to develop their own operating systems instead of relying on third party operating
systems. Some analysts also pointed out that this new interest by mobile phones companies to
develop their own mobile operating systems could be attributed to their desire to differentiate
themselves from other mobile phone companies. They opined that a common operating system
didn‘t give much scope for the mobile phone companies to differentiate themselves as the basic
features of the operating system would remain the same despite some cosmetic changes in the user
interface that could be made by the handset makers. Apple could have an edge in this respect as
iOS was uniquely different and would not be available with any other handset manufacturer.
Analysts said that in this case, this exclusivity rather being a disadvantage, could be beneficial to
Apple in the long run when the market for mobile operating systems consolidated and two or three
leading operating systems emerged.
Android still had a long way to go before reaching the top position among the mobile operating
systems, some analysts pointed out. iOS was dominating the US market and BBOS was also going
strong due to the high preference from corporate customers for BlackBerry smartphones. In
markets like Europe and Aisa, some other operating systems like Symbian were highly preferred.
Symbian still commanded up to 48% in Europe while Android‘s market share was still hovering
86
Intel Corporation, headquartered in Santa Clara, California, USA, is a leading technology company and is
the world‘s largest semiconductor chip maker. For the fiscal year 2009, its revenue was US$ 35.127
billion.
87
ImadSousou, ―Welcome to MeeGo,‖ http://meego.com, February 10, 2010.
88
Larry Dignan, ―Nokia and Microsoft‘s Windows Phone 7: It Could Work, But Why Stop There?‖
http://www.zdnet.com, December 20, 2010.
89
Don Reisinger, ―Gartner: Android Market Share to Near 50 Percent,‖ http://news.cnet.com,April 7, 2011.
90
Nielsen is a marketing and advertising research company headquartered in New York, United States.
91
Christina Warren, ―Android Nipping at iOS‘ Heels in Market Share,‖ http://mashable.com, January 3,
2011.
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around 5% in Europe.92
Many consumers in Europe and Asia were actually ignorant of Android
despite being heavy users of high-end smartphones. Commenting on Android‘s weak performance
in Europe, IDC analyst Francisco Jeronimo said, ―Consumers steer clear of Google‘s OS and sell-
out is below everyone‘s expectations. Consumers recognize the Google brand, but still do not
understand what Android is.‖93
As for Europe, another main reason cited for the weak performance
of Android was the lack of availability of more number of handsets made by European handset
manufacturers.
Google was also planning a big push for Android in Asia, another market which was still
dominated by Symbian. To achieve this, Google said that it would attract third party application
developers by offering them special incentives. Google also said that it was planning to take
Android to the masses by installing it in many cheap handsets manufactured by Chinese handset
manufacturers. Commenting on Google‘s strategy for expansion in the emerging markets, the vice-
president of engineering, Andy Rubin, said, ―The down-market opportunity is about to happen. It‘s
actually quite a revolution.‖94
It was felt that this new strategy could bring about a manifold
increase the number of handsets available with Android by breaking the price barrier as Android
had hitherto been available only on highly expensive smartphones which were not affordable for
many people with low incomes in the emerging economies. This was seen by analysts as Google‘s
strategy to see Android installed on more devices and to create new avenues to sell
advertising.95
Apple, which traditionally focused on the premium segment of the market, did not
seem to have the same kind of plans to make iOS more affordable to the masses. At the same time,
Apple also did not have any tie-ups with operators in emerging markets like India, which made
their devices expensive for the price conscious consumers.
Apple and Google were the two companies in the mobile operating system space that consumers
identified as innovators.96
Industry observers felt that these two companies were at the very center
of the ongoing software platform war. Some likened it to a chess game that was being played
between the two companies with both vying to establish their respective platforms. According to
Gartner, the smartphone shipments would be around 468 million units in 2011 and would increase
further to more than 630 million in 2012. By then, Android and iOS would be the top two mobile
operating systems in the world. 97
Some of them wondered which platform would eventually
dominate the market and which company would have the last laugh.
92
Gareth Beavis, ―Android ‗Below Expectations‘ in Europe: Analyst Slates Google‘s Early OS Growth,‖
www.techradar.com, December 7, 2009.
93
Gareth Beavis, ―Android ‗Below Expectations‘ in Europe: Analyst Slates Google‘s Early OS Growth,‖
www.techradar.com, December 7, 2009.
94
Olga Kharif, ―Google to Push Android Deeper into Asia,‖ www.businessweek.com, June 30, 2010.
95
Olga Kharif, ―Google to Push Android Deeper into Asia,‖ www.businessweek.com, June 30, 2010.
96
―Why Does the Media Report on iOS vs Android Market Share When They Never Reported on iPhone
OS vs Symbian Market Share?‖ www.quora.com/Why-does-the-media-report-on-iOS-vs-Android-
market-share-when-they-never-reported-on-iPhoneOS-vs-Symbian-market-share
97
Don Reisinger, ―Gartner: Android Market Share to Near 50 Percent,‖ http://news.cnet.com,April 7, 2011.
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Exhibit I
Wireless and Mobile News‟ Top Ten Coolest Smart Phones of 2009
Rank Smart Phone OS
1 iPhone 3GS iOS
2 Droid Android
2 Palm Pre webOS
2 BlackBerry Bold 9700 BBOS
3 BlackBerry Tour BBOS
4 HTC Touch Pro2 Windows
4 Droid Eris Android
5 HTC Hero Android
6 Nokia E71 Symbian
6 BlackBerry Storm2 BBOS
6 myTouch 3G Android
6 Motorola Cliq Android
7 Samsung Memoir Samsung OS
7 BlackBerry Bold BBOS
Source: “Top Ten Best Coolest Smartphones of 2009: Review of Reviews - iPhone, Droid, Palm Pre and
BlackBerry Bold 9700 Top List,” www.wirelessandmobilenews.com, December 20, 2009.
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Exhibit II
Financials of Apple and Google
Apple
(As of September 2009)
Google
(As of December 2009)
Revenue 42,905.0 23,650.6
Cost of Goods Sold 25,683.0 8,844.1
Gross Profit 17,222.0 14,806.4
Gross Profit Margin 40.1% 62.6%
SG&A Expense 4,149.0 1,983.9
Depreciation & Amortization 734.0 1,524.3
Operating Income 11,740.0 8,312.2
Operating Margin 27.4% 35.1%
Nonoperating Income 326.0 (160.7)
Nonoperating Expenses -- 229.7
Income Before Taxes 12,066.0 8,381.2
Income Taxes 3,831.0 1,860.7
Net Income After Taxes 8,235.0 6,520.4
Continuing Operations 8,235.0 6,520.4
Discontinued Operations -- --
Total Operations 8,235.0 6,520.4
Total Net Income 8,235.0 6,520.4
Net Profit Margin 19.2% 27.6%
Diluted EPS from Total Net Income 9.08 20.41
Dividends per Share 0.0 --
Source: www.hoovers.com.
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Exhibit III
Market Share of Various Mobile Operating Systems in February 2010
(figures in percentages)
Symbian
44%
BBOS
26%
iOS
12%
Windows
18%
Android
0%
Others
0%
34346
Source: Rachel King, “Nokia, Symbian Still Lead Smartphone Market, Gartner Says,”
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Exhibit IV
Competing Platforms
Symbian OS: Symbian OS was the main operating system of the handset maker Nokia. In
addition to Nokia, some other handset manufacturers like Samsung and Sony Ericsson also used
the Symbian OS in their handsets. It was also the most popular mobile operating system in the
world with a share of 46.9% in the total smartphone sales in 2009. In 2000, the Ericsson R380
became the world‘s first phone to be based on the Symbian OS. Over time, the Symbian OS
gained in popularity and by November 2006, 100 million smartphones running on the Symbian
OS had been shipped. Many new versions of the OS intended for various devices like the Nokia
S60, Nokia Series 80, Nokia Series 90, etc. were developed for different kinds of devices. By
July 2009, more than 250 million devices running the Symbian OS had been shipped. But the
release of the latest mobile operating systems by other companies increased the competition for
the Symbian OS. In 2008, Nokia purchased the former Symbian Software Limited which owned
the Symbian OS and established a non-profit organization called the Symbian Foundation. The
objective of setting up the Symbian Foundation was to create open source software which could
be used by various mobile handset manufacturers without their having to pay any royalty. The
Symbian Foundation was responsible for unification of the various user interfaces for future
development. By February 2010, the total open sourcing of the software was achieved and the
code was published under the Eclipse Public License which was available to all for free. A new
version of the Symbian OS called the Symbian^3 was expected to be launched by the end of
2010.
BlackBerry OS: BlackBerry OS (BBOS) was the proprietary mobile operating system
developed by RIM for its BlackBerry range of smartphones. BBOS was considered one of the
most advanced mobile operating systems in the world available for mobile phones. The unique
feature of the software was the support it provided for corporate email which was the main
feature of the BlackBerry range of smartphones. Even though they were proprietary software,
application developers could develop software for BBOS which were made available for
download through the RIM‘s very own BlackBerry App World. The updates for the BBOS too
were available to customers for automatic updating. The new version of the BBOS 6.0 was
announced in April 2010 and was to be available for download in the third quarter of 2010.
Windows Phone: Windows Phone (Windows) was the mobile operating system owned and
developed by Microsoft. Windows was previously called Windows Mobile. Windows was first
released in the year 2000 and was then called as ‗Pocket PC 2000.‘ Another version of the
Pocket PC series was launched in the year 2002. Later, Pocket PC was renamed as Windows
Mobile in the year 2003. The initial versions of Windows were mostly meant for portable palm
sized computers rather than for mobile phones. Some new versions of Windows followed,
focusing on the fast growing smartphone market. Windows was mostly supplied to other
independent mobile phone manufacturing companies like HTC rather than used in any of the
devices made by Microsoft as it was only a software company. As of 2009, Windows was the
fifth most popular mobile operating system but was steadily losing market share. Microsoft
announced the launch of a new version of Windows called ‗Windows Phone 7‘which would be
released by the end of 2010 to face competition from new mobile operating systems like iOS
and Android.
Compiled from various sources.
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Exhibit V
Growth in the Number of Applications Added to Android Market
Source: Sarah Perez, “Android App Growth on Rise: 9000+ New Apps in March Alone,”
Exhibit VI
US Smartphone Operating System Share from June 2010 to November 2010
Source: http://www.androidtapp.com/apple-leads-smartphone-race-for-now-yet-android-attracts-most-
recent-customers/us-smartphone-operating-system-share-6-month-recent-acquirers/
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References and Suggested Readings:
1. Don Reisinger, “Gartner: Android Market Share to Near 50 Percent,”
http://news.cnet.com, April 7, 2011.
2. Christina Warren, “Android Nipping at iOS‟ Heels in Market Share,”
http://mashable.com, January 3, 2011.
3. Larry Dignan, “Nokia and Microsoft‟s Windows Phone 7: It Could Work, But Why
Stop There?” http://www.zdnet.com, December 20, 2010.
4. Fred Vogelstein, “Letter From Silicon Valley: Doing the Math on Android vs. Apple,”
www.wired.com, July 28, 2010.
5. “2011 Tablet Sales will Hurt Intel and Microsoft,” www.android-tablet.com, July 9,
2010.
6. “Cisco Cius: A New 7 inc Android Tablet,” www.android-tablet.org, June 30, 2010.
7. Olga Kharif, “Google to Push Android Deeper into Asia,” www.businessweek.com,
June 30, 2010.
8. “Five Top US Operators Pick Samsung Galaxy S Phones,”
http://economictimes.indiatimes.com, June 29, 2010.
9. Olga Kharif, “Google‟s Android Gaining an Apple via Developers,”
http://www.bloomberg.com, June 24, 2010.
10. “Apple Says App Store has Made Developers Over $ 1 Billion,”
www.appleinsider.com, June 7, 2010.
11. “iPad Sales Top Two Million,” www.thesun.co.uk, May 31, 2010.
12. Charles Smith, “Microsoft Dethroned as Apple Becomes Largest Tech Firm,”
www.ibtimes.com, May 26, 2010.
13. “Dell Launches Streak Tablet PC Across Europe,” www.news.bbc.co.uk, May 25,
2010.
14. QuentynKennemer, “Steve Jobs: „Not a Chance for Google to Leapfrog Apple,”
www.phandroid.com, May 24, 2010.
15. “Android Overtakes iPhone in US,” www.hindustantimes.com, May 11, 2010.
16. “Android Overtakes iPhone,” www.smh.com.au, May 11, 2010.
17. Scott Lowe, “Android Overtakes the iPhone: Report Says Android has Surpassed the
iPhone in U.S. Sales,” www.ign.com, May 11, 2010.
18. Amy Vernon, “Is the Android truly Open Source,” www.networkworld.com, May 5,
2010.
19. Lucas Mearian, “Apple iPad, Other Tablet PCs, to Drive Cloud Storage,”
http://news.techworld.com, April 12, 2010.
20. Anuroop Kaiser, “HTC Tempted by the Fruits of its Own OS?” www.technopedia.info,
April 10, 2010.
21. Sarah Perez, “Android App Growth on Rise: 9000+ New Apps in March Alone,”
22. Ginny Mies, “Sprint and HTC Reveal the EVO 4G Android Smartphone,”
www.networkworld.com, March 23, 2010.
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23. Kevin Schram, “Android Market Has 30,000 Apps [Android Apps Market Seeing
Tons of Growth, Outnumbered by iTunes Five To One],” http://nexus404.com, March
16, 2010.
24. Peter Farago, “Day 74 Sales: Apple iPhone vs. Google Nexus One vs. Motorola
Droid,” http://blog.flurry.com, March 16, 2010.
25. Rob Jackson, “Android Growing Ridiculously Faster than All Other Mobile
Platforms (In the US),” www.phandroid.com, March 10, 2010.
26. Rachel King, “Nokia, Symbian Still Lead Smartphone Market, Gartner Says,”
27. Imad Sousou, “Welcome to MeeGo,” http://meego.com, February 10, 2010.
28. “Symbian Announces Symvbian^3 and Immediately Gives it Away,”
www.symbian.org, February 10, 2010.
29. Bobbie Johnson, “Google Challenges iPhone with Launch of Nexus One Mobile,”
www.guardian.co.uk, January 5, 2010.
30. “Top Ten Best Coolest Smartphones of 2009: Review of Reviews - iPhone, Droid,
Palm Pre and BlackBerry Bold 9700 Top List,” www.wirelessandmobilenews.com,
December 20, 2009.
31. “Google Phone set for Launch: Video Emerges of New Nexus One Mobile Dubbed
iPhone-Killer,” www.dailymail.co.uk, December 16, 2009.
32. Gareth Beavis, “Android „Below Expectations‟ in Europe: Analyst Slates Google‟s
Early OS Growth,” www.techradar.com, December 7, 2009.
33. Andrew Nusca, “Sergey Brin: Google Android, Chrome OS Likely to Converge,”
www.zdnet.com, November 23, 2009.
34. “Samsung Launches Open Mobile Platform,” www.bada.com, November 10, 2009.
35. Erika Jonietz, “Droid Set to Take on the iPhone,” www.technologyreviewonline.com,
October 28, 2009.
36. Katherine Hannaford, “HTC Hero Wins Gadget of the Year and Phone of the Year at
T3 Gadget Awards,” www.t3.com, October 14, 2009.
37. Matt Hamblen, “Android to Grab No. 2 Spot by 2012, Says Gartner,”
www.computerworld.com, October 6, 2009.
38. Stacey Higginbotham, “Google Lines Up with Verizon to Fight Apple,”
http://gigaom.com, October 6, 2009.
39. Dan Frommer, “iPhone Market Share Could More Than Double when Apple Drops
AT&T Exclusivity,” www.businessinsider.com, October 2, 2009.
40. MG Siegler, “Google Drops a Nuclear Bomb on Microsoft. And it‟s Made of
Chrome,” http://techcrunch.com, July 7, 2009.
41. Jennifer LeClaire, “Google Store Will Help Android Developers Earn Cash,”
www.newsfactor.com, January 2, 2009.
42. Miguel Helft and Saul Hansell, “Google Introduces an iPhone Rival to Whims,”
www.nytimes.com, September 24, 2008.
43. Gareth Beavis, “A Complete History of Android,” www.techradar.com, September 23,
2008.
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44. “Chrome, Android, and The Cloud,” www.avc.com, September 2, 2008.
45. Egan Orion, “Apple Stifling Iphone Apps Developers,” www.theinquirer.net, August 26,
2008.
46. Geoff Duncan, “T-Mobile Launching First Android Phone?” www.digitaltrends.com,
August 15, 2008.
47. Philip Elmer-DeWitt, “Android vs. iPhone: „This is Where the Pain Happens‟,”
http://tech.fortune.cnn.com, June 25, 2008.
48. “A Short History of Google Android,” www.brighthub.com/mobile/google-
android/articles/18260.aspx.
49. ―Company Overview,‖ www.google.co.in/intl/en/corporate.
50. “Why Does the Media Report on iOS vs Android Market Share When They Never
Reported on iPhoneOSvs Symbian Market Share?” www.quora.com.
51. www.androidtapp.com/apple-leads-smartphone-race-for-now-yet-android-attracts-most-
recent-customers/us-smartphone-operating-system-share-6-month-recent-acquirers/
52. www.hoovers.com.
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Apple vs. android

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