Don't Feel Bad for the iPad

Last month marked the tenth anniversary of Apple unveiling the iPad. The occasion took on a somber feel as the most common reaction in tech circles ended up being sadness and disappointment for what the iPad had failed to become. While some are convinced that the iPad is in some way a victim of neglect, mismanagement, or even worse, such feelings are misplaced. We don’t need to feel bad for the iPad.

Anniversary Reactions

Apple unveiled the iPad on January 27th, 2010. To mark the tenth anniversary of the unveiling, a few publications had articles recapping the iPad’s first decade. Some of the reactions were complicated, to put it gently.

Here’s John Gruber, over at Daring Fireball, in a post titled, “The iPad Awkwardly Turns 10”:

“[Steve] Jobs’s on-stage pitch was exactly right. The iPad was a new class of device, sitting between a phone and a laptop. To succeed, it needed not only to be better at some things than either a phone or laptop, it needed to be much better. It was and is.

Ten years later, though, I don’t think the iPad has come close to living up to its potential. By the time the Mac turned 10, it had redefined multiple industries. In 1984 almost no graphic designers or illustrators were using computers for work. By 1994 almost all graphic designers and illustrators were using computers for work. The Mac was a revolution. The iPhone was a revolution. The iPad has been a spectacular success, and to tens of millions it is a beloved part of their daily lives, but it has, to date, fallen short of revolutionary.”

Ben Thompson, over at Stratechery, agreed with Gruber and went further in his own article, “The Tragic iPad”:

“It’s tempting to dwell on the [Steve] Jobs point — I really do think the iPad is the product that misses him the most — but the truth is that the long-term sustainable source of innovation on the iPad should have come from 3rd-party developers. Look at [John] Gruber’s example for the Mac of graphic designers and illustrators: while MacPaint showed what was possible, the revolution was led by software from Aldus (PageMaker), Quark (QuarkXPress), and Adobe (Illustrator, Photoshop, Acrobat). By the time the Mac turned 10, Apple was a $2 billion company, while Adobe was worth $1 billion.

There are, needless to say, no companies built on the iPad that are worth anything approaching $1 billion in 2020 dollars, much less in 1994 dollars, even as the total addressable market has exploded, and one big reason is that $4.99 price point. Apple set the standard that highly complex, innovative software that was only possible on the iPad could only ever earn 5 bucks from a customer forever (updates, of course, were free).”

There were then tweets (lots of tweets), regarding the current state of iPad. Here are two:

Riccardo Mori: “What I believe is that the iPad and its OS could have been so much more than a reinvention of the computing wheel adapted for a touch interface.”

Loren Brichter: “[T]he App Store is what killed the iPad.”

You get the point. There was no shortage of writers, pundits, and industry analysts using the iPad’s 10th anniversary to give eulogies for the product in terms of its inability to be revolutionary, grab momentum, or even just meet expectations.

A handful of people talked highly of iPad on its anniversary. However, such perspectives were few and far between. Interestingly, the articles that were published still ended up including noteworthy disclaimers and qualifiers. For example, here’s Om Malik in “iPad at 10. An affair forever”:

“A decade after its introduction, I think the iPad is still an underappreciated step in the storied history of computing. If anything, it has been let down by the limited imagination of application developers, who have failed to harness the capabilities of this device.”

My Reaction

I hold a very different view of the iPad at 10 years old. In recapping the 2010s, I went so far as to position the iPad as one of two most important tech products of the decade (the iPhone being the other one). The iPad has become ubiquitous in various industries and sectors, and in the process, it has altered modern computing.

How can there be such a dramatic difference in opinion when it comes to iPad?

Different perspectives.

To see how important perspective becomes in this discussion, we need to go back to the iPad unveiling in January 2010.

Selling a Problem

A closer look at the iPad unveiling reveals it wasn’t that Steve successfully made the sales pitch for a new product category. Instead, Steve successfully sold consumers on a problem they weren’t even aware they faced.

A few daily tasks like email, web browsing, video watching, and mobile games could be better handled on a large piece of glass with multi-touch than on a small piece of glass with multi-touch (iPhones) or a non-multi touch device (MacBooks). Such juxtaposition elevated the iPad at the expense of the iPhone and Mac. The iPhone was positioned as a tiny device designed for portability while the Mac was positioned as a heavy beast blown out of the water by iPad when it comes to handling simple tasks.

Consumers agreed with Steve that there was an indeed a problem and that the iPad was a genuine solution to the problem. The iPad became Apple’s best-selling product out of the gate with the company selling 22 million devices in just the first 12 months. Ten years later, it is difficult to envision a new Apple product that will be able to grab that kind of adoption so quickly.

The iPhone

In January 2010, the iPhone was more of an idea and a promise than anything else. When the iPad was unveiled, there were only about 30 million people using an iPhone. Apple now sells that many iPhones in about two months. In 2010, it was the iPad, not the iPhone, that was considered to be the more important product in the future.

Given such lofty expectations, maybe it shouldn't have come as a surprise that the iPad’s tenth anniversary was met with awkwardness, sorrow, and even sadness as some look at the product as a promise that wasn’t kept. However, the early promises found with the initial iPad were met. There was just an unexpected twist.

The iPhone ended up carrying the vision found with a larger piece of glass supporting multi-touch that Steve unveiled on stage in January 2010. As iPhone screens became larger over the years, the product leveraged the inspiration found with the initial iPad and turned it into something consumed by nearly a billion people. There are 32x more iPhone users in the world today than there were when the iPad was unveiled in 2010. The iPhone became an iPad that fit in one’s pocket. Based on the iPhone’s resounding success, it is fair to say that those early calls that the iPad would turn into something very big ended up being true.

A Pivot

Instead of raising the white flag and letting the iPad set sail into the sunset after being replaced by the iPhone, Apple pivoted the product category to accomplish two things:

  1. Serve as a content creation machine (Apple Pencil for drawing / keyboard accessories for typing).

  2. Represent a low-cost entry point into the Apple ecosystem ($329 starting price).

Those two changes gave the iPad a very successful second chapter. Unit sales have stabilized at 45 million per year with approximately 20 million new people entering the iPad installed base each year.

The iPad is currently shaping industries far more than some people are giving the product credit for. There are at least 350 million people using an iPad in some capacity. The iPad has indirectly added billions of dollars of market cap to companies ranging from Slack and Microsoft to Square when considering the product’s widespread adoption and influence in enterprise settings.

A Line in the Sand

The iPad has become a line in the sand between those who grew up on laptops and desktops and those who never felt comfortable with such devices. Apple finds itself walking a thin line when it comes to adding functionality to the iPad for some users while keeping the device’s simplicity and intuitiveness front and center for other users.

Multi-tasking is a great example of this battle. For instance, some Mac users are not pleased with Apple’s implementation of multi-tasking on the iPad. These users find multi-tasking on an iPad to be a mental exercise. Meanwhile, a portion of iPad users have no need or desire for multi-tasking on iPad. These users are also likely to view multi-tasking on a laptop or desktop as not intuitive. Going a week with no laptop or desktop usage will do interesting things to one’s perception about computing and intuitiveness. When returning to a laptop or desktop, the machines feel like taking a step back. Our brain has to be rewired to handle something that is inherently less intuitive.

The iPad’s Problem

Apple doesn't sell perfect products. There will always be room for improvement, refinement, and new thinking. In some ways, the lack of perfection is what serves as motivation for Apple to keep pushing. When defining the problems now facing the iPad, my criticism is a bit unconventional.

The iPad’s primary problem is that it is viewed by some as needing to be a laptop replacement in order to have any value. This unrealistic viewpoint has resulted in a type of expectational debt being placed on the device. The iPad is expected to become more like the Mac and macOS over time. This is problematic as the iPad is not a laptop replacement.

MacOS should not be positioned as inspiration for where to bring the iPad or iPadOS. This isn’t meant to belittle macOS. Instead, touch-based computing has blurred the line between consumer and professional devices. When debating content consumption versus content creation and the broader definition of work, there is a habit in tech circles to not consider how such terms have dramatically different meanings for hundreds of millions of people.

The takeaway is that the iPad has become a different kind of product, and it should be allowed to stand apart from the iPhone without being forced to replace macOS. Hence, there is iPadOS and things like Apple Pencil support. Instead of asking how best to handle multitasking on an iPad, a better question is to wonder what multi-tasking should even mean on an iPad. Such questions present new challenges regarding user interfaces and design.

Being Itself

Apple’s product strategy is to push all of its major product categories forward at the same time. This is different from pushing the iPhone forward and trying to have the iPad and Mac come along for the ride. Positioning the iPad as a content creation platform for the masses, designed to handle some tasks given to laptops and desktops while also handling completely new tasks, is a winning strategy. It allows the iPad to be itself while not forcing the product into a corner in order to satisfy certain segments of the Apple installed base.

A lot has changed during the iPad’s first 10 years. Some may be disappointed with how the iPad has evolved, even to the point of thinking Apple lost a great opportunity. However, I wouldn’t feel bad for a device that revealed the iPhone’s true potential and then became a different kind of content creation tool now used by more than 350 million people.

Listen to the corresponding Above Avalon podcast episode for this article here.

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For additional discussion on this topic, check out the Above Avalon daily update from March 2nd: The iPad’s First Decade, The iPad’s Second Decade.

Apple Keynotes Still Matter

It didn’t take long for critics to go after Apple’s recent product event at Steve Jobs Theater. However, the backlash had a dramatically different tone this time around. Instead of focusing on the new products unveiled on stage, much of the criticism was aimed at the event itself.

The New York Times ran an opinion piece calling for the end of Apple keynotes and claiming there is no longer a place for such “pageants” in today’s polarizing world. Others took to Twitter to say how Apple’s dessert offerings suggested the company is tone deaf or to complain about members of the audience becoming too emotional while hearing Apple Watch users tell stories of how the device saved their lives.

While Apple cynicism isn’t new, the preceding opinions represent a new kind of outrage. Apple keynotes remain some of the most valuable marketing events in today’s media landscape. In addition, keynotes provide a number of intangibles that it would be difficult for Apple to communicate any other way. It is in Apple’s best interest to continue hosting keynotes and product events, especially as the company moves into the wearables era.

Odd Criticism

In an opinion piece titled, “The Last Apple Keynote (Let’s Hope),” Charlie Warzel wrote:

“But what started as a Steve Jobs TED talk has become a parody — a decadent pageant of Palo Alto executives, clothed in their finest Dad Casual, reading ad copy as lead-ins for vaguely sexual jump-cut videos of brushed aluminum under nightclub lighting. The events are exhausting love letters to consumerism complete with rounds of applause from the laptop-lit faces of the tech blogging audience when executives mention that you (yes you!) can hold the future in your hands for just $24.95 per month or $599 with trade-in.

The entire event is at odds with our current moment — one in which inequality, economic precarity and populist frustration have infiltrated our politics and reshaped our relationships with once-adored tech companies. But it’s not just the tech backlash. When the world feels increasingly volatile and fragile, it feels a little obscene to gather to worship a $1,000 phone. Serving journalists pastries topped with gold leaf doesn’t do much to help either.”

My initial reaction to Warzel’s article was that it must have been some kind of manufactured outrage piece since the “pageant” he describes didn't come close to describing an actual Apple keynote. The media doesn’t “worship” Apple at these events. The rounds of applause aren’t coming from the media / press.

The following screenshot from inside Steve Jobs Theater during the recent Apple event does a good job of showing who attends Apple keynotes at Steve Jobs Theater. Contrary to what some may think, the media and press, denoted by the laptops in use, make up 55% to 60% of the audience. The rest of the crowd is comprised of Apple employees, guests, and VIPs.

Apple’s decision to serve refreshments, which did include delicious desserts, isn’t obscene. Instead, it’s a courtesy extended to guests who wouldn’t otherwise have a chance to eat anything. Many tech writers and reviewers spend up to six hours on Apple event days doing their jobs (shooting videos, taking photographs, getting hands-on time with the products, filing reports by strict deadlines).

After reading Warzel’s piece a few times, the only logical takeaway was that the Apple keynote was a victim of a deeper discontent that he holds towards Apple. Warzel sounded uncomfortable with the idea of Apple having the audacity to sell approachable luxury in a world that is apparently turning against tech companies.

Value

Not surprisingly, Warzel failed to recognize any reason why Apple keynotes still matter and are of immense value in today’s media landscape.

Apple derives three primary benefits from its keynotes:

  1. Earned Media. Apple keynotes command days of media coverage during an era when the news cycle is measured in hours. No other company is able to grab the kind of attention that Apple earns. When taking into account previews published ahead of Apple events and the various reviews in the days that follow, it is conceivable that Apple receives hundreds of millions of dollars of free press from a single keynote.

  2. Theater and Design. Apple events are productions built and designed to provide an experience to those in attendance. This is one reason why Steve Jobs Theater is so important to Apple. The event venue ends up telling guests a little bit about the people who built the products announced on stage. The typical Apple keynote audience will include representatives from various Apple partners, industry leaders, and special guests.

  3. Employee Morale Boost. No one wants the product that they have spent two or more years working on to be unveiled to the world in a press release. Instead, to have that new idea unveiled on stage at an event watched by a few million people provides an amount of satisfaction and accomplishment that goes a long way given the sacrifice that went into making that product a reality.

Any one of those items by themselves would be reason enough for Apple to continue putting on keynotes. With all three factors on display at most keynotes, there is no valid or logical reason for Apple to stop hosting these events. Holding keynotes is a smart and rational business decision for Apple.

Evolution

The Apple keynote isn’t a static entity. What used to be smaller affairs targeting technology writers and gadget reviewers have evolved into global events bringing together people from different continents and diverse backgrounds.

Although it is now difficult to believe, Apple keynotes weren’t even live-streamed as recently as a few years ago. Instead, event live blogs were the only way to find out what Apple was even announcing. Meanwhile, the recent event at Steve Jobs Theater was live-streamed on YouTube for the first time and reportedly had three million viewers.

The now iconic iPod unveiling at Apple’s Town Hall auditorium back in 2001 doesn’t look anything like the modern day Apple keynote.

Apple events used to be targeted toward tech writers and gadget reviewers who would publish the all-important “yes” or “no” decision as to whether or not a new Apple product was worthy of purchase. Walt Mossberg, the dean of gadget reviewers, symbolized this era. Things are dramatically different today. No single reviewer or publication holds enough influence to make or break a new Apple product.

The Apple keynote presentation itself has changed dramatically as well. Fifteen years ago, Apple keynotes consisted primarily of Steve Jobs going through slide after slide with a few demoes here and there. In January 2007, during the iPhone unveiling, Steve Jobs was on stage by himself for 88% of the 103-minute presentation. Much of his focus was spent on making the case for why a certain new Apple product should exist. Apple had a user base that was a fraction of its current size. Steve ended up selling more than just the product announced on stage. Steve was selling Apple.

In contrast, last week’s Apple keynote had nine different presenters, Apple employees who worked on the product being unveiled. Tim Cook, in what has become his usual role of a master of ceremonies, was on stage for approximately 14% of the time.

Leveraging Video

A few years ago, the Apple keynote was thought to be on its last legs. Thanks to the rise of social media, Apple events were expected to have trouble remaining relevant in the news cycle for longer than a few hours. In addition, it wasn’t entirely clear how Apple would handle critical product unveilings, demos, and “one more things” that had been handled by Steve.

As it turned out, the Apple keynote went on to not just maintain its influence, but to actually gain value in today’s media landscape.

What changed?

Apple bet big on video.

Apple keynotes now include a heavy reliance on video for handling many segments of the traditional presentation. Everything from showing off products for the first time to going over the product’s sales pitch is handled by video. It helps that these videos are very well done.

While Apple’s initial move to video was viewed as a way to handle the presentation role that had been given to Steve, the increased usage of videos began to serve other purposes. Videos shown during Apple events now go on to be watched and passed around on social media. In 2007, the iPhone unveiling consisted of six short videos, most of which were just clips of TV shows and movies, representing 2% of stage time. At last week’s Apple event at Steve Jobs Theater, 11 videos were shown, representing nearly 22% of stage time. Three of those videos, some of which went on to be included in ad campaigns, have a collective 55M views on YouTube.

Apple extended this bet on video to include 120-second comical recaps of its keynotes. The videos have been receiving rave reviews after each event. Such recap videos were unimaginable just a few years ago as they would have been looked at as Apple essentially telling people not to bother watching the full presentation. As it turned out, the recap videos have become a great way for Apple to bring the keynotes to life. Recap videos receive four to five times the number of views as the full keynotes. Relatively speaking, few people go back to rewatch a 100-minute Apple keynote. However, people do go back and watch a two-minute recap video of that 100-minute Apple keynote.

Seriously abbreviated Apple Event. Introducing iPhone 11 Pro, iPhone 11, Apple Watch Series 5, and the new iPad. And announcements about Apple TV+, Arcade, and more. Learn more Song: "Adiós" by Benjamin Clementine https://apple.co/Adiós

Improvement

Apple is in a league of its own when it comes to product unveilings. Amazon’s strategy of shipping duds and failures in an attempt to find something that people will like doesn’t support large-scale product keynotes and events.

Google has tried to get into the hardware event mindset, but the company just doesn’t seem interested in following Apple down the big keynote path. Microsoft and Samsung try to emulate Apple keynotes with both companies going heavy on the theatrical side of things. At the end of the day, keynotes from these companies just aren’t able to generate and sustain the level of buzz and interest that Apple creates.

There are two areas in which Apple can improve the keynote.

  1. Onstage demoes need to be rethought.

  2. Aim for greater secrecy.

Giving precious stage time to game or app demoes is increasingly questionable. This isn’t meant to say that we have moved past demoes altogether and Apple should simply fill the time with more videos. There is a role for demoes to play if showing something in the flesh can prove a point more effectively than a simple video can - not an easy thing to accomplish given how good Apple’s marketing videos have become. However, a balance is needed between the tangible demo and video.

It’s been a while since there has been a memorable demo at an Apple keynote. One example that jumps out at me is from 20 years ago when Phil Schiller, Apple’s SVP marketing, jumped off a 20-foot ledge.

http://www.thinkingbricks.com/1/macworld-new-york-1999-keynote-address/phil-schiller-dive.html death dive = Steve Jobs + Phil Schiller + Apple iBook, MacWorld New York 1999 Keynote Address This clip was taken from my amateurish, shaky, Sony Hi8 HandyCam recording of the 1999 NYC MacWorld Public/ Keynote address; shot from the standing-room-only audience (unlike other public versions).

Another example is the Steve Jobs’ hula hoop demo. In both cases, the demoes were a clever way of highlighting the “freedom” associated with Wi-Fi on an iBook.

http://thinkingbricks.com/1/macworld-new-york-1999-keynote-address/steve-jobs-demonstrates-wireless-iBook.html This clip was taken from my shaky Sony Hi8 HandyCam recording of the 1999 NYC MacWorld Public/ Keynote address; shot zoomed in from afar way in the back of the standing-room-only audience (unlike Apple's public version).

One reason the preceding demos worked so well was that they were performed in front of a massive audience of developers. Even today, Apple’s WWDC keynotes have a different vibe than events at Steve Jobs Theater given the 5,000 developers in the audience.

With on stage demos come risks, and it is understandable that Apple would want to de-risk its keynotes as much as possible. Two years ago, a minor mishap with a Face ID demo ended up being one of the most talked about items from Apple’s event with some going so far as to say the demo failure meant the feature wasn’t ready for prime time. Such a demo failure probably wouldn’t have been made into as big of a deal ten years earlier.

Well-done demos can give keynotes a certain amount of soul. During Apple’s Services event this past March, the “demo” involving Hollywood celebrities played out well from the perspective of being in the audience. Apple had a message that it wanted to push forward - it had the ability to grab the biggest names in Hollywood for Apple TV+, and the “demo” effectively reflected that message.

As we move further into the wearables era, Apple demoes involving smart glasses could prove to be a great way of unveiling new ideas and concepts to the world. The recent string of AR demoes at Apple keynotes have left much to be desired as people simply run around empty tables or desks with iPads in hand.

The other area that can always be improved upon is secrecy. There is something about seeing or learning about a product for the first time when it is announced on stage. Google’s decision to soft unveil the Pixel 4 removes much of the oxygen from its upcoming Pixel hardware event. While it’s not easy for Apple to maintain secrecy around unannounced products, the company has seen more success on the secrecy front recently. Last week, Apple was able to surprise the world by positioning an always-on display as a key feature of the Apple Watch Series 5. The feature didn’t leak beforehand.

Products

Apple keynotes end up reminding me a lot of Apple retail stores. The success found with each item ultimately depends on the product being sold. If Apple doesn’t have compelling products that people are interested in, the keynotes used to demonstrate such products will fall flat.

While some may hold cynicism towards a trillion dollar company unveiling $1,400 Apple Watches and $1,100 iPhones in an underground theater that cost more than $100M to build, such a stance ignores the impact Apple products are having on people’s lives. Apple keynotes end up being a way for the people building these tools to tell the world why such products should exist and how they can be used to improve the lives of a billion people. There is still a role for the Apple keynote to play in today’s always-changing world.

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Tim Cook. The Architect.

While some have responded to Steve’s resignation as Apple CEO by recalling personal stories involving Steve or Apple, others have focused on how Apple’s culture will handle a different leader.  Let’s take a step back and reassess Apple’s current situation. 

Current Products

I have extreme confidence that Apple will successfully update its flagship products in the near-term. As I previously wrote, Apple’s start-up structure assures resources are allocated to a product in the months leading up to a refresh; breaking down the “walls” between executives and workers - the same walls that often destroy other technology companies. Having executives involved in seemingly detailed and mundane aspects of a product is the difference between having a product be “magical” or “good”. Tim Cook will continue to hash out aggressive business contracts with Apple friends and foes. Apple’s expanding supply and distribution channels will continue to be run with the dedication and intelligence that have put competitors to shame. As a prime example of how much confidence I have in Apple’s ability to execute in the near-term, I have no intention in lowering my forecasts for Mac, iPod, iPhone, or iPad sales in my AAPL earnings model following Steve’s resignation. 

Future Products 

Apple will continue to innovate and brainstorm ideas that will change the world.  While it is difficult to pinpoint why the iPod, iPhone, and iPad have been so successful, it is important for Apple to continue to make similar industry-changing strides.  I think this is where Apple will face its first significant challenge with Steve no longer at the helm.  What makes Apple so great is its willingness to take abnormally large risks and essentially bet the farm on those risks.  Apple is able to translate a big idea (big bet) into reality with very little friction and inefficiency. The biggest risk enters the equation on the demand side - whether consumers want the product. Steve made bets. Big ones. Will Tim be able, or willing, to take similar big risks?

At this time, I do think Tim is capable of such responsibility.  Tim isn’t some young gun who has been thrown into the game. Observing how the world has changed (and where it will go) is an art not a science, and while Steve mastered that art so successfully, Tim was in a perfect position to watch the master perfect his art, giving him a  significant  advantage over everyone else in Silicon Valley.  Apple will lose on some bets, but will still be able to strive to new heights if more is wagered on winning bets. 

Face of Apple

Apple is Steve and Steve is Apple and that will not change. However, there is now a debate as to who will become the new face of Apple or if Apple even needs a singular public representative given Apple’s size and power.  I do think the entire Apple executive team will gain more exposure with some SVPs acquiring new affiliations with consumers. Forstall as Mr. iPhone and iPad,  Jony as Mr. Apple Design, Schiller as Mr. Apple Brand,  while Tim remains the “Big Dad”.  Great brands create emotional connections between users and products.  People will want to connect with Apple and its leadership in new ways. When Apple is ready to unveil its next big thing, we will most likely have a few members of the Apple team explain why the world needs this new product, whereas up to now, only Steve has had the honor. 

AAPL

Concerning financials and other AAPL stock decisions, I would expect no significant changes or speed bumps with Tim as CEO.  In addition, an internal CEO promotion often results in minimal changes to prevailing capital philosophies concerning dividends and share buybacks.  

The Architect

At the end of the day, Steve built the foundation for a magnificent castle and Tim is a great architect. As I wrote back in December: "As long as most of the risk variables are monitored and marginalized to a certain extent by upper management (and Steve  Tim) - the consumer is left as the biggest risks. Apple can then rely on its brand power to turn the odds in its favor.”

iPhone Can Still Beat Android in Smartphone Market Share

On smartphone battlefields where iPhone hasn’t yet arrived, Android is winning the battle. 

It is premature to declare Android the eventual winner in the smartphone market share race, even with Google now activating 300,000 Android units/day. Steve Jobs noted on Apple’s recent quarterly earnings call that there is "no solid data" on Android phone shipments. For this argument, let me assume Google is actually selling 300,000 Android units/day (27 million/quarter). Apple sold 14.1 million iPhones in the most recent quarter and is on track to sell 15-16 million iPhones/quarter.  

How can iPhone outsell Android if these sales numbers are correct? Here are the reasons why I think iOS can still beat Android in terms of smartphone unit market share:

1) iPhone (4 and 3GS) is outselling Android (dozens of models) in markets where both iPhone and Android are competing face-to-face on the same carrier.

iPhone dominates European mobile ad market

Mobile OS usage; iOS #1 in North America, Europe, and Australia

When a customer has the choice between iPhone and Android, side by side, they are choosing iPhone. 

(I recognize that these links rely on data that carries a number of disclaimers and is often based on some sort of survey, to which I say, show me clearer evidence. With Google, mobile carriers, and phone manufactures not releasing actual Android unit sales figures, what other type of evidence can be obtained on a regional basis? The only surveys and evidence that even try to depict OS mobile market share continuously point to iOS leading Android in regions where both are sold on the same carriers)

2) Verizon. Android has received a ton of attention and mind share due to its strong hold on Verizon’s 90 million customers. While a few million Verizon subscribers have jumped ship over the past three years to buy iPhone on AT&T, the majority haven’t due to high carrier switching costs, including termination fees, sticky family plans, and differing coverage areas.

Why are Verizon customers buying Android phones?

A) Coming from a feature phone, any Android phone will appear amazing. The ability to use the internet or check email on a touchscreen is truly amazing for someone coming from a basic phone. 

B) Android phones are in front of Verizon customers.  Most Verizon subscribers pick a phone from the selection that they see in a Verizon store or kiosk. If the only thing a customer sees is Android, chances are good that they will buy an Android phone. 

C) Verizon customers have few options: stay with a feature phone, buy Android, or leave Verizon and buy iPhone on a network that doesn’t support phone calls due to their awful coverage and service.  Which option would you choose?

In addition, with Sprint and T-Mobile not selling the iPhone, Android has the perfect incubator to flourish - a market of about 180 million subscribers with no access to iPhone (AT&T has 90 million subscribers).  

3) Interesting Android developments in recent weeks have actually supported my thinking that iOS isn’t in as bad shape as some may say. For example, the Samsung Galaxy Tab has sold 1 million units in its first 28 days - nearly as fast as the iPad - pretty remarkable.

Although the Galaxy Tab is a tablet computer and not a smartphone, I think there is an interesting development to be seen from this data. The Galaxy Tab has done well thanks in part to its sales in South Korea, a country where android has 80% market share, a country where Samsung is a source of national pride. Reports indicate that approximately 50,000 - 70,000 Galaxy Tabs were sold in South Korea in the first 28 days (the Galaxy Tab went on sale in a total of 30 countries). What about iPad? In South Korea, the the iPad just went on sale three weeks ago and initial sales are already on par with Galaxy Tab and I imagine iPad sales will soon exceed the Galaxy Tab. The Galaxy Tab entered a market that was void of iPads, with people eagerly wanting to get their hands on iOS. 

Google VP of Engineering Andy Rubin recently said, “After the US, (Android) saw Asia go crazy” with sales in South Korea going “berserk” in the past four months. Once again, it’s funny how Android is doing so well in South Korea. How about iPhone? Well, South Korea recently decided to allow iPhone sales in South Korea.  So Android was doing great in South Korea, a country where iPhone was banned.  A true battle is one where both sides are present.

China is another interesting story. China Unicom, China’s second largest mobile carrier with approximately 175 million customers, is the exclusive provider of iPhone in China. Last year, the iPhone unveiling was a disaster in China due to restrictions imposed on the device by the Chinese Government. In 2010, iPhone 4 is a complete success with over 200,000 pre-orders being taken for the device and curbs having to be put in place to control the buying frenzy in Apple stores.  Overall though, Apple still has a small presence in China with only four retail stores and the largest mobile carrier, China Mobile and its 570 million customers, still not carrying the iPhone.  A true battle is one where both sides are present. 

My thesis will be validated, or disproven, by Verizon iPhone data in 2011 (and possibly by China Mobile carrying iPhone in 2011). If Verizon sells the same number of iPhones as AT&T (somewhere in the neighborhood of 10-15 million in the first year), my thesis will most likely hold true and iOS will be the top selling smartphone platform in the U.S.