By John Gruber
Atoms: We are not selling shoes this time…
Just a bunch of points to keep in mind before you read this piece from Joe Wilcox:
Wilcox doesn’t come out and say so explicitly, but he’s defining “winning” as “highest unit sale volume”. So he’s probably right. I don’t think the iPhone, or any Apple product, will ever “win” in terms of unit sales. (Update: Uh, except for the iPod, of course.) But that’s because Apple doesn’t even want to win that game. If you instead measure by profits and growth, Apple and the iPhone look like the front-running favorites to me. (Same goes for the Mac.)
I try my best to shy away from the term “smartphone”, because I don’t know what it means exactly. There are already people calling the iPhone, Pre, and Android models “super smartphones”. What we’re talking about are handheld networked computing devices.
Wilcox cites Gartner projections regarding 2012 “smartphone” unit sale market share. First, it’s not like Gartner has a great track record in such predictions. Second, from what I’ve seen regarding this particular analysis from Gartner, the iPhone OS numbers are only for “smartphones”, and thus exclude the iPod Touch. Right now the iPod Touch accounts for about 40 percent of iPhone OS devices sold. Of course, maybe Android will be present on a slew of non-phone devices by 2012, too. It’s just another reason not to get too caught up in the word “smartphone”, though.
All that said, in terms of unit sale share for the entire handheld networked computer market, Apple might do a lot better over the next three years than Wilcox seems to expect. With phones, the biggest cost by far is the monthly service plan. You can “buy” an iPhone 3G for just $99, and the monthly plans from AT&T are about the same as those for any competing devices. (True for other iPhone carriers around the world, too.) The only way for a competitor to undercut the iPhone on price would be for some carrier to undercut AT&T on monthly service plan rates. Don’t hold your breath. And for non-phones, the iPod Touch is cheaper than anything similar.
If you look at the evidence and the direction of the trend lines, the iPhone’s prospects look stunning. I think Wilcox is instead starting with the conclusion that the iPhone will never break out of a Mac-sized market share niche, and working backwards from there.