Data to Support Apple's iPhone Strategy

Post by
Scott Francis

In previous posts I pointed out how Apple made the right call in putting off all the me-too features in favor of the platform-? and then a followup post on the actual execution of that strategy once the iPhone 3GS was released.? The day after the latest Apple presentation seems like a good time to revisit the topic.

First, its apparent that the standalone iPod line is a little less interesting than it was, now that the iPhone and iPod Touch are here.? The incremental improvements are still there, but a little less exciting when you're so many iterations into a product cycle that gets new offerings literally every 12 months.

But let's take a look at how the iPhone is doing, shall we?? Oh, we could look at unit sales.? Or revenue.? Or profit margin.? But I just read a blog post that makes the point from the application developer's perspective. Matt Hall writes in "Android Market Sales, Are Those Tears or is it Raining in Here?" that Android sales are dramatically lower than sales on the iPhone - more so than just the difference in units shipped would suggest.

Let's take a look at the two charts that are pretty brutal:

[caption id="" align="alignnone" width="434" caption="Larva Labs Android Market Sales"]

Larva Labs Android Market Sales


Followed by a comparison of how their apps are doing on Android Market versus iPhone's Appstore:

[caption id="" align="alignnone" width="350" caption="Larva Labs Sales Android vs. iPhone"]

Larva Labs Sales Android vs. iPhone


Ouch.? Matt goes on to give a good critique (and advice) to the Google Android Market for improving their site from a developer's perspective. But my thought is the key thing the Android Market is missing is that it doesn't appear to be as focused on making buying decisions easy.? The iPhone/Apple App Store didn't get everything right with their App Store, but they sure made buying apps easy.? Those customer-facing or customer-touching processes are really important...Matt remains optimistic about Android in the medium- to long-term and I think that's valid - because the OS is good and it is free - it is likely to be adopted by a lot of phone makers and be in the hands of a lot of users.? But it also may get fragmented like Unix (see China Mobile's plans for its oPhone and its own application market, powered by Android but not exactly "in" the original marketplace). There are also a lot of complaints in the comment feed about piracy (something Apple's ecosystem makes harder).? There's a lot of platform risk in the Android market... and not much (anymore) in the iPhone App Store platform.

And the strategy of building the network-effect marketplace behind a new software platform on the iPhone appears to be a big winner for Apple at this point.? No one else is even close to challenging its ecosystem in this respect.

Still not convinced?? Take a look at the Chart of the Day from the Business Insider:

[caption id="" align="alignleft" width="610" caption="Apple's iPhone Games vs. Nintendo DS and Sony PSP"]

Apples iPhone Games vs. Nintendo DS and Sony PSP


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