Unofficial iPhone Blog

Now that the first Android phone is out, most of the analysis has centered on the fascinating contrast in smart phone business models between Apple and Google. You’ve got Google with a wide open approach, in which almost anyone can create applications or create new Android-compliant phones, versus Apple’s more closely managed approach. Apple seems likely to keep a tighter rein on what software gets into its AppStore, and it’s clearly going with an iPhone-only hardware strategy. You’ve even got HTC’s keyboard/touchscreen, versus Apple’s touchscreen-only product.

But while such comparisons are interesting, there’s another simple reality that will also determine who comes out ahead in this Battle of the Titans. It’s Apple’s first mover advantage. Already, thousands of developers have already created apps for the iPhone, and many are making real cash money on the more than 100 million apps that have been downloaded fromthe AppStore so far. Had Apple and Google announced their SDK on the same day, these developers may have created versions for both right away. That didn’t happen, though. Since Android came nearly six months later than Apple (and Arik broke the news of Apple’s SDK plans way back in October of 2007), many will likely take a “wait-and-see” approach to Android. That creates a chicken-and-egg conundrum for Android, seems to me. If top developers are waiting and seeing while iPhone sales zoom ahead, it could impact or at least temper Android’s ability to get off the ground.

Take Pandora, the popular Internet radio site. It’s had huge demand for its service since setting up shop on the AppStore. “The iPhone eclipsed all of our other mobile Internet partners in about 12 hours,” says CTO Tom Conrad. As of my visit to Pandora earlier this month, 10% of its listenership was already on the iPhone—a huge number for what had been a PC-dominated service. It’s such a big number that CEO Tim Westergren thinks he’s got the critical mass to start monetizing the interest—both through a $3 a month paid service, or through increased advertising to free listeners.

Obviously, this took some commitment to the iPhone platform. As soon as Steve Jobs said that Apple would create an SDK back last year, Pandora assigned three of its ten software developers to create the iPhone version of the service. “That was a big decision for us, but we wanted to be more than ready on Day One” after the AppStore opened thus summer, says Conrad.

What about Android? While Conrad thinks its very promising, “we don’t have anyone working on Android. We want to be where our customers want us to be.” Until those customers demand Android, it sounds like Pandora will keep its focus on iPhone.

If T-Mobile’s HTC G1 phone doesn’t get Android off to a fast start, there could be plenty of Pandora’s. So says Jeff Holden, CEO of Pelago, maker of a social networking program called Whrrl that’s available on the AppStore. A former top executive at Amazon, he’s seen first mover advantage in action—and thinks it could be important in this context. “Network affects are very important. Apple has a great ecosystem going with the iPhone and AppStore, and consumers go where developers go and developers go where consumers go. So being the first game in town can create a lot of advantage.” If Google can’t quickly start creating a network effect of its own, Android could become like all those early e-auction sites that never caught up with eBay. “eBay was only game in town for long time. Trying to catch up with that can be an extremely difficult thing.”

Either way, while the product comparisons will dominate the headlines, the war for developer allegiance will be just as critical.

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Reader Comments
Synthmeister
September 25, 2008 01:55 PM

Not just first mover advantage, but first MONEY advantage. The App store moved 100 million downloads in the first 60 days and is averaging $1 million per day. Then there’s the dev who made $250K in the first 60 days with a $4.99 game!

It’s probably going to be at least a year before anyone has an end-to-end solution with development, marketing, distribution & sales like Apple. By then there will be around 40 million iPhones in the wild.

At this point in time, there are no Android phones even for sale yet, and when they do go on sale, they will be with the smallest network and only 20 3G markets.

Now if AT&T and Apple are getting crucified for lame 3G coverage in 200 markets, what is going to happen to T-Mobile with only 20 markets?

First mover indeed.

Florian Seiche, whose company designed Google’s answer to the iPhone, believes the personal computer will soon join the dodo.

“This is really big news for the entire mobile world,” he says, after finally managing to tear himself away from the new G1 Google mobile phone.

Mr Seiche claims the phone, which was launched by Google’s founders Larry Page and Sergey Brin amid a frenzy of excitement in New York this week, is set to transform the way we think about the internet – and could even make the personal computer obsolete.

“It is so fast, responsive and easy to navigate that you basically have the same browsing experience you would have on your desktop at home,” he enthuses.

In a couple of years time people will look back and remember how “awkward” it was that they could only go online when they were sat down in front of their PC, because “it will just be very natural that you can enjoy the internet wherever you are”.

Although he is usually the picture of modesty, Mr Seiche could be forgiven for currently being a little smug: his company, HTC (High Tech Computers), until now a little-known Taiwanese communications outfit, designed the phone.

HTC has transformed itself since foundation in 1997 as a product developer for established manufacturers, including Microsoft, to break away on its own and become the clear market leader in smartphones.

Since launching its brand in 2006 it has taken the challenge to its former clients, releasing 18 acclaimed smartphones to market, including the Tuch Diamond.

But the G1, which for UK consumers will be available for free on some T-mobile tariffs from November, will pitch HTC into a David and Goliath-style battle against Apple and the hugely popular iPhone. It is a challenge the 41-year-old relishes.

“We have been focused on smart phones and smart devices for 10 years – today we are the leading provider of smart phones in the world,” he says. “But, still many consumers don’t know us.

“This is a great opportunity to showcase that we can make innovation happen.”

The G1 is set to strike at the heart of the iPhone’s selling point: making crucial daily tasks pain-free while on the move. It does so by taking advantage of Google’s wealth of applications that have already transformed the desktop.

It offers one-touch access to Google mail, which revolutionised web-based email services. It promises to make watching videos on the Google-owned YouTube a delight. Meanwhile instant-messaging via the Google Talk chat service could mean the end of back-and-forth text messaging.

While the iPhone already offers Google’s Maps function, which helps users navigate their way around the world using GPS satellites, the G1 goes one step further. It adds a built in compass and Street View, street-level photographs of roads around you, removing the need for even basic map-reading skill.

HTC hopes the G1’s unique slid-out Qwerty keyboard will appeal to businessmen who have found the transition from their blackberry keyboard to touch screen iPhone difficult.

The phone boasts so many “very, very cool and compelling features”, including an mp3 player with access to Amazon’s music download service, that he believes “many users will find it highly addictive”.

“That is all available on day one of the platform going live,” Mr Seiche says. “So you can just imagine within six months, within a year, the vast kind of choices consumers will have about what to turn their mobile device into.”

The real revolution is the phone’s operating system which will allow the phone to evolve into the future. Developed by Google, and 30 other technology and mobile phone companies, Android is an “open source” system design to allow anyone to build on and alter it. Technology geeks can barely contain their excitement.

“From a consumer perceptive it is a huge change, in the past a lot of content and experience has been controlled by others whether on the iPhone by Apple, or in a lot other cases by other mobile operators,” he says.

“But now open source will allow the user to turn the phone into whatever they want it to be and make it do whatever they want it do by adding all the applications people will develop.”

For all his understandable excitement, Mr Seiche, who has spent more than 10 years in the telecommunications industry first with Siemens and then at Orange, refuses to sound the death knell for traditional mobiles.

He concedes that not even the G1 can be the so-called “Jesus phone”, rendering all others irrelevant. Even boring old call and text phones will remain necessary for some consumers, he says. “I have always believed that not one single device will be the perfect answer for everyone.”

Mr Seiche admits it will be consumers who decide how the mobile phone market “evolves” but he hopes HTC’s burgeoning research and development department, which accounts for one in four of all staff, will keep the company at the forefront of the telecoms revolution.

“I’ve been working with mobiles phones for a very long time,” he says. “I’ve never been as excited as I am now.”

CV

Name: Florian Seiche, Vice president HTC Europe

Age: 41

Lives: Windsor

Hobbies: travelling, lucky really as I’m always going somewhere

Car: A German one! (Mercedes)

Education: masters and doctoral degree in economics, University of Cologne, Germany.

Family: lives with his wife and six-year-old son