Why Android will smash Apple’s iOS

The tides are turning.

After nearly reinventing the smartphone space with the now-ubiquitous iPhone, Apple has finally seen its stampede of buyers surpassed by an even bigger horde: Those chasing Android-powered devices.

Nielsen reported on Tuesday that over the last sixth months – which includes the launch of the iPhone 4 – Android devices outsold iOS devices for the first time ever. And it’s only going to get worse. Here’s why Apple’s early grip on the mobile phone world can only weaken over time.

Closed ecosystem, closed possibilities

In many ways, the tight integration between iOS, the iPhone hardware and even AT&T vaulted the Apple’s wünderphone to success more any other single factor. The same rigid inflexibility will end up dragging Apple down as the race carries on.

The iPhone is Apple’s Model T: It revolutionized the smartphone market by making people who didn’t even know what a smartphone was want a smartphone. It broke the rules, rewrote new ones, and is well on its way to making an entire category of product indispensible for the average American. But like Ford’s “any color you like, as long as it’s black” mantra with the Model T, the iPhone doesn’t offer much choice.

While Google has licensed Android to companies that build big phones and small phones, cheap phones and expensive phones, phones with QWERTY keyboards and phones without, phones across all four major U.S. networks, Apple sells… the iPhone. One phone, one manufacturer, one operating system, one network. At least for now. Sure, rumors are swirling about the iPhone coming to Verizon, but will that really give them the push forward they need?

Without a doubt, it’s arguably the greatest one-size-fits-all product conceived, another fitting parallel to the Model T, but even Ford eventually realized he needed coupes, sedans, trucks, convertibles and vans to meet the needs of discerning consumers. Apple needs to do the same, but it won’t.

Even if Apple does manage to expand the iPhone line internally, (you could call the iPad a variant of it, if you really wanted to), the company’s refusal to license iOS to any outside manufacturer will never allow the same breadth of products to come to market as Android can muster. The iPhone can outsell every one of them 10 to one, which it nearly has, but the sheer volume of them in aggregate will still cause Apple to fall behind in market share.

Essentially, it’s the 1980’s all over again, except instead of seeing its operating system surpassed by Microsoft, Apple will see it surpassed by Google this time.

The upcoming developer exodus

So who cares about market share, anyway?

Anyone with a smartphone should.

Mom might have always said that popularity doesn’t matter, but when you’re peddling an operating system, it does. A lot. The explosive popularity of iOS gave Apple an early edge by luring all the leading mobile developers over to it. Right now, if you want the same refined, mainstream apps your friends are talking about, you buy an iPhone. It’s where the action is, just like Windows on desktop computers. But as its market share becomes smaller and smaller beneath Android, that will change.

Developers simply want to put their products into as many hands as possible to make the most money. Right now, that means developing for iOS, which holds 28 percent of the smartphone market, compared to just 19 percent from Android. (BlackBerry technically holds the most at 31 percent, but still suffers from a late start after BlackBerry App World launched nearly a year after Apple’s App Store.)

But Apple already shows signs of weakening – just look at Nielsen’s figures. Apple’s iOS has hovered around 27 to 29 percent marketshare for all of 2010, seemingly plateaued. With only one phone to sell and one carrier, which covers only a quarter of total wireless users in this country, that should come as little surprise; Apple just doesn’t have that many more people to sell phones to. Android, by contrast, has clawed from just 8 percent to 19 percent, and continues to climb. A swell of new devices from dozens of manufacturers ensures that it will continue.

The cycle is a vicious one – for Apple anyway. As Android swallows more market share, developers will pay more attention to it, making it more and more attractive to buyers, in turn making it more and more attractive to developers. Rinse and repeat. Eventually it will be Android, not iOS, that has a reputation for offering the widest array of the best software. Google’s aggressive licensing and partnerships have predestined Android to become the Windows of the mobile phone space – open and spread across hundreds of different devices and across the world, while Apple will once shrink back to the same niche it holds in the personal computing market, shunting software growth along the way.

As if a larger user base weren’t enough reason for code monkeys to invest their time in Android, Apple has also developed a reputation for denying apps for silly reasons, inconsistently censoring them, and purging existing apps based on new rules, not to mention laying so many restrictions on how apps can interact with the iPhone hardware that many useful, perfectly legitimate apps cannot exist on iOS.

End of an era?

Apple’s iOS is here to stay. We won’t see it sink beneath the waves, but with one arm tied behind its back, it seems unlikely that it can hang beside competitors swimming full speed ahead with both arms cranking and flippers.

From a Ford-like start in smartphones, Apple seems to be veering towards a Mini future – enthusiastically embraced by a cult following, but less and less significant in the market as a whole. Mac fans have no reason to fear this – it’s the reality they live with every day – but don’t expect the current bounty of iOS software to continue. The days of iDominance may be coming to a close.

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