Prezi from my lecture last week on the battle between Apple and Google for the future of the mobile internet. I am drawing short histories of both companies, and then concentrating on the importance of the mobile internet, and the strategies of both companies for dominating it. I discuss Apple’s closed garden model, and Google’s attempts to keep Android an open system; the short OODA loop of open networks and why this will always be an overwhelming advantage; and the pluses and minuses of both systems in terms of security, user comfort, and freedom.
This little graph from IHS Reseach has been making a lot of noise around the interwebs in the last three days. The message is that app store revenue is growing all over the board, in some cases quite dramatically, which is ultimately just another proof that the trend away from the desktop and towards the cloud is real and getting stronger. Android Market revenue grew 861.5% year-over-year – read that figure again. Of course the Android revenue is still puny compared to what Apple is making on its apps, but the other important figure is that the Apple App Store lost 10% of market share over the same period. With the three-way competition between Samsung, HTC and Motorolla for control over the Android hardware market only heating up, these figures can go only one way for Apple.
To make things even gloomier for Apple, Eric Schmidt just announced at MWC2011 that Android has 300 000 activations per day and rising, that YouTube apparently gets 160 million mobile views per year, and that ChromeOS is definitely coming this year. I will probably have another post with more on that speech.
The 4th quarter sales figures for the worldwide smart phone market in 2010 just came out and according to Canalysis Google Android is practically destroying the competition. As the graph below illustrates, the Android platform seems to have attained a market leader position with roughly 33% market share globally (to Apple’s 16%). Whatever the current market share, the most impressive figure is the year-on-year growth in the last column – this is just phenomenal growth considering that Android is barely 2 years on the market and has had minuscule advertising compared to the iPhone. The growth generated by the Android clones should be the final proof that open access platforms beat closed gardens, and the impending explosion in Android-based tablets should make these figures even more one-sided.
Five billionth device about to plug into Internet – Network World on the explosion of permanently connected mobile devices. According to the author, today there are around 1 billion computers (PC’s, laptops) with regular net connectivity. The remainder of that 5 billion from the title is comprised of mobile devices and all sorts of peripherals such as cameras, TV’s, picture frames, etc. The key development is that the number of networked objects is growing at such an astonishing rate, that fixed-place connectivity (the venerable personal computer in other words) is soon to lose its raison d’etre. Accordingly, the most important developments seem to be in the area of machine-to-machine connectivity.
The next billion geeks: How the mobile internet will transform the BRICI countries – The Economist on the Brazil, Russia, India, China and Indonesia mobile revolution. According to the article, there are 610 million regular internet users and 1.8 billion mobile-phone users in the BRICI market as a whole. Interestingly, and perhaps predictably, due to very poor to non-existent copper/fibre infrastructure in places like India and Indonesia mobiles have leapfrogged the PC as the main internet access interface in these countries. Only 81 million Indians have regular net access through fixed lines, but there are 507 million mobile phone users paying as little as $o.oo6 per minute, and more and more of these mobile users are also starting to surf the net through their phones. These numbers are incredible because they illustrate how a deregulated market based around a new technology can rapidly develop and leapfrog an established technology. This is also interesting in the context of Australia’s national broadband network plans which will eventually deliver a tragically outdated technical solution to a problem which can be solved rapidly as India’s example demonstrates.
How Google is Looking to Cut Apple’s Margin and How the Sell Side of Wall Street Will Enable This Without Sheeple Investor’s Having a Clue – Boombust Blog analyzing the cloud strategies of Google, Apple and Microsoft. Some very interesting analytics of earnings numbers and market share, but above all a clear spelling of the probable long-term strategy of Google with the Android phones/tablets. Google seems to have taken Apple entirely by surprise with its strategy to not only give away Android for free but to make it entirely open-source which in turn makes the platform an instant favorite with every real tech geek out there. This of course means that Google doesn’t have Apple’s fat margins from sales, but on the other hand it allows Google to not only expand rapidly (they have already achieved larger market share then Apple – an astonishing achievement), but to also undercut the future margins of the iPhone. Significantly, Apple has to compete on the software front with Google and its legion of geek volunteers, while simultaneously competing with all the hardware companies out there – HTC, Samsung, Motorolla to name just a few. On both of these fronts Apple is terribly outplayed in terms of innovation cycles – i.e. how fast can it research, release, update new products. Because of its cultist philosophy and total-control business model Apple has been maneuvered by Google into reacting in either of two ways:  cut prices, which will result in lesser margins and less resources for future development, or  break down the cult and open its metaphorical walled garden, which will go against the very core of what Apple and Steve Jobs stand for. Either way leads to doom, and Google has achieved that by completely embracing the open source movement. How is that for ‘Don’t be Evil!’?
As I discussed here, and here, Google seems to seriously plan for and work towards a prime position in cloud computing (web 3.0?). A couple of interesting links relate to that. First comes the now infamous interview Eric Schmidt, Google’s CEO, gave at the WSJ. In that interview he made a number of comments indicating where Google are looking at the moment, but for some reason all it was remembered for is his quip that because of privacy issues with social networks in the future kids may end up having to change their names when they reach adulthood. Ok, this is odd, and it came out of nowhere, but surely there are more interesting bits in what he had to say. Much more interesting for example is his hint that Google are seriously working on developing semantic algorithms:
This statement has to be read in the context of Google’s move to the cloud. In that paradigm the semantic depth of your search query will be provided by your entire cloud footprint. This is quite literally an Artificial Intelligence in full operational mode. As William Gibson writes in a recent article in the New York Times,
“We never imagined that artificial intelligence would be like this. We imagined discrete entities. Genies.”
We imagined HAL, and Wintermute, but instead of managing an ultimately controllable anthropomorphic machine we have to deal with a distributed mind that is built of…us. An ambient socio-digital system.
In part 1 I mentioned Google’s focus on low latency sensors and massively redundant cloud data centers. Google is not the only company in the race though, and probably not the most advanced down that road. Ericsson – the world’s largest mobile equipment vendor – is seriously planning to operate 50 billion net-connected devices by 2020. Only a small fraction of these will be what we consider as ‘devices’ – mobile phones, laptops, Kindles. The enormous majority will be everyday objects such as fridges (strategic object due to its central role in food consumption), cars (see the new Audi), clothes, basically everything potentially worth connecting. This implies an explosion in data traffic.
As Stacey Higginbotham writes over at Gigaom:
So even as data revenue and traffic rises, carriers face two key challenges: One, the handset market is saturated; and two, users on smartphones are boosting their consumption of data at a far faster rate than carriers are boosting their data revenue. The answer to these challenges is selling data plans for your car. Your kitchen. And even your electric meter.
In other words, it is in the interest of mobile providers to extend the network to as many devices as possible so that they can start profiting from the long tail. As the competition in mobile connectivity is fierce and at cut-throat margins, the first company to start mass-connecting (and charging) daily objects is going to make a killing. Hence Google’s focus on sensors and data centers.
This presentation by wireless analyst Chetan Sharma outlines the motivation for mobile providers to bring the internet of things as quickly as possible.
What collapsing empire looks like by Glenn Greenwald: – The title speaks for itself. A list of bad news from all across the US – power blackouts, roads in disrepair, no streetlights, no schools, no libraries – reads like Eastern Europe after the fall of communism, only that the fall is yet to come here.
Special Operations’ Robocopter Spotted in Belize by Olivia Koski: – Super quiet rotors, synthetic-aperture radar capable of following slow moving people through dense foliage, and ability to fly autonomously through a programmed route. This article complements nicely the one above.
Open Source Tools Turn WikiLeaks Into Illustrated Afghan Meltdown by Noah Shachtman: – Meticulous graphical representation of the WikiLeaks Afghan log. The Hazara provinces in the center of the country, and the shia provinces next to the Iranian border seem strangely quiet.
Google Agonizes on Privacy as Ad World Vaults Ahead by Jessica E. Vascellaro: – A fascinating look at the inside of the Google machine. They seem to have reached a crossroad of their own making – they either start using the Aladdin’s cave of data they have gathered already, or they keep it at arm’s length and lay the foundations of their own demise. Key statement: ‘In short, Google is trying to establish itself as the clearinghouse for as many ad transactions as possible, even when those deals don’t actually involve consumer data that Google provides or sees.’