24 June

Smart Phone gives way to PersonalOS transformation

Understanding a market segment transformation

Sometimes there is a change that is so obvious that its as big as the Earth ... yet nobody sees it. That's because no one notices the elephant in the room when they are too busy scratching where the fleas are biting.

Bottom line - the largest volume OS market is about to come online. Only Google and Apple are well positioned to compete. Everyone else is stuck playing catch up in the prior market definition known as "Smart Phone" - they are missing the "left turn", just before volume spikes. Read more ...

So ... my son's visiting this week from UCLA, we're driving down the freeway, and drive by a Google Android billboard. He literally erupts with an almost incoherent torrent of observations on the rapid domination of the Droid and other Android-based phones around him at UCLA and the LA business circles he consults for - too much too fast.

The net take-away from this flood of information - Google's "application momentum" is overwhelming Apple, in ways that vastly broaden the market segment. There are parallels with the past - Apple with the Mac attempted to rigidly control apps and developers when Microsoft chose explosive growth instead. Then as now, Apple wishes to define the game to maximize control so as to profit best off of market segment growth.

But Microsoft's goals back then in the early days of Windows was to nail down as many vendors as possible, to define the concept of a PC as requiring Windows. This is closer to the Google approach today - that of overwhelm and devastate on the volume of apps, allow as many vendors/providers as possible, and let vendors carry the load of support.

Microsoft has license revenue from those vendors - if it efficiently supports them, streamlining production by the vendors they only increase the revenues back to them - its in their interest to have fast time to market.

Google's business model is different - Android's not for license revenue but for market share. They don't want to be locked out of provider "walled gardens" - so you have to look at the core business, not the penny ante CE mobile side, which is entirely now the vendor's pie, unshared with a Microsoft or Apple. The vendors themselves haven't yet completely understood this, nor that certain consultants are the ticket to fast time to market. A function of learning curve at winning at the Android business game.

All of this doesn't mean Apple is losing here - by its vertical nature, they will continue to ruthlessly extract every last penny to be found in their niche - not unlike how IBM historically extracts value on the enterprise side. But it reminds me of when I was at Tandem Computers - which sold against IBM, but only at the "top of the pyramid", to a very high end clientele only. Google is undercutting Apple, adding more base to the pyramid. What happens when the pyramid is 100x bigger? While Apple is focused on narrowing its definition and extracting even greater percentage out of vendors/providers for the privilege of selling an Apple product.

Meanwhile Microsoft is clearly losing the game. Palm lost the game, got sold, and HP wants a try at bat to take a swing at the game - extremely smart that they can use this to distance themselves from Microsoft, soon to be the next Palm in this market - they clearly, like Palm, don't get it. Why Microsoft is not Google.

Watch Google grow this pyramid, and eventually own 90% of it. It isn't the "Smart phone" anymore ... its the Personal OS. Eventually on PC's, tablets, phones, fridges ... even dog collars. Subsuming PC's into CE.

See what I mean?

Posted by william at 20:04 | Comments (0) | Trackbacks (0)
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