Apple's Smartphone Dominance Is Over: 10 Reasons Why

By Don Reisinger  |  Posted 2010-08-03

Apple's Smartphone Dominance Is Over: 10 Reasons Why

In 2007, when Apple first launched the iPhone, there was significant speculation over whether a device that provided a vastly different input functionality could survive in a world that was governed by physical keyboards, trackballs, and other mechanical functions. It was a risk. And after a short time, it was abundantly clear that that risk paid off. The iPhone became a technological marvel that exceeded almost all analyst expectations. Four brief technological generations later, it's still going strong.

But things are starting to change in the smartphone market. As important as the iPhone is as the device that set the standard for smartphones in the space, it's being overtaken by Google's Android platform. In fact, Nielsen reported that Android captured 27 percent of U.S. smartphone sales over the past quarter. Apple acquired 23 percent of all U.S. smartphone sales over the same period. It's worth noting, however, that the figures don't include the iPhone 4 or the Motorola Droid X.

Regardless, this is the second time that Apple has heard the news that Android devices are outpacing the iPhone. It's also quickly becoming clear that at this rate, Apple's position as the dominant force in the mobile market will soon fade away, Take a look at the reasons why.

1. The numbers speak for themselves

It's hard to argue against concrete evidence. Nielsen's data clearly shows that Android has beaten iOS quite handily. With 27 percent market share and gaining, it's clear that Google is well on its way to mobile dominance. Apple, on the other hand, could find it is permanently relegated to second place. That's not necessarily a bad thing, and on a phone-by-phone basis, the hardware company will still beat all competitors. But in terms of overall market share, the numbers seem to show that Apple's dominance is over.

2. More Android-based devices are coming

The biggest issue facing Apple and its iPhone is that the company is up against a deluge of devices that are making their way to store shelves. Aside from the Droid X and the HTC Droid Incredible, Android's success has caused several more vendors to want to bring their own Android devices to the market. As that happens, look for Apple's influence in the mobile space to decline even more. Those individual releases might not beat out the iPhone, but as an aggregate, they will continue to put pressure on Apple and its market share in the space. There is power in numbers.

3. Motorola has proven it's possible

Motorola has proven something both to consumers and other vendors: with the right set of features, and the proper vision, a company can develop a phone that will compete well against the iPhone. Apple is now forced to compete with a device - the Motorola Droid X - that can come close to matching the iPhone. Motorola has proven that success is achievable against the iPhone. That's not good for Apple's market share.

4. Google's Android 2.2 is decisive factor

Android owners running Android 2.2 on their smartphones are able to view just about any video or play any game on the Web. It's something that iPhone owners don't have available to them. Going forward, Android 2.2 could be the linchpin that sends a deluge of consumers to Google's platform. The inability to view some videos or play Flash games is a real issue with Apple's software. If Flash works well on Android and consumers like it, the addition of Adobe's platform will become a key selling point for Android phones.

Competition Ganging Up on Apple iPhone

5. Developers keep coming

One of the main reasons why Apple has been so successful is its ability to attract developers. With millions of users, developers have created more than 240,000 applications to profit off Apple's growing user base. But with Android selling so well and its year-over-year growth nearing 1,000 percent, developers are starting to realize that there might be as much, or perhaps even more, sales opportunity on Android. Look for the Android market to expand rapidly and Apple's App Store growth to plateau. It might not happen overnight, but it could happen sooner than some think.

6. One against many

Apple is facing an increasing number of competitors. The company is up against Symbian OS, RIM's BlackBerry, Windows Mobile and a slew of competitors that are trying desperately to capitalize on the market that Apple carved out. As that competition grows, it will be even more difficult for Apple to maintain its dominance. After all, the iPhone might be tops right now, but eventually, the competition will come up with something new and put the onus back on Apple to innovate. With more competition, the chances of that happening grow exponentially.

7. RIM and Microsoft

Google might be the biggest threat to Apple right now, but Microsoft and RIM are also closing in. RIM is well on its way to unveiling BlackBerry 6, the latest version of its venerable software, which could be its best answer to iOS yet. And although Microsoft has been slow to capitalize on the market Apple has carved out, Windows Phone 7 could potentially change things up in the mobile market, thanks to the software's new design ideas and Microsoft's ability to attract vendors. Microsoft could hurt Apple's chances of fully dominating the mobile market more than expected.

8. Apple's PR struggle

Apple has made several mistakes with the iPhone 4 that could negatively affect its ability to sell smartphones going forward. By not handling the iPhone 4's antenna issues the right way, Apple has put itself in the crosshairs of those customers that expected a prompt and permanent fix from Apple. By allowing the iPhone 4's antenna woes to continue to be news, Apple has caused some to wonder if they should really get an iPhone 4. Admittedly, that won't drastically affect Apple's sales. But it could turn those people to other devices. And when that happens, Apple will lose another sliver of the market.

9. The iPhone isn't the only viable phone anymore

For a while, the iPhone was the only viable touch-screen smartphone on the market. It was far ahead of anything that was being offered by the competition. But all that has changed. The Motorola Droid X is a fine alternative to the iPhone. Even the HTC Droid Incredible stands up nicely against the iPhone. With RIM preparing a new slate of BlackBerry devices to take on Apple, it's quickly becoming clear that consumers have more solid choices than ever before. That won't be good for Apple's market share figures.

10. Consumers are starting to trust Google

Trust is a major obstacle for most consumers to overcome. They need to know that the device they plan on buying is one that will work the way they want it to. Apple has enjoyed the trust of consumers for a long time. And when it came to touch-screen smartphones, it was alone. Today, it's not. Consumers believe that Google can provide just as viable of an experience as Apple. And they're proving that by voting with their wallets. As that trust grows, look for Google to capitalize, and for Apple to lose market share because of it.


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