Smartphones are our most mobile, most personal computers. There are already about one billion smartphones in use. At its peak, PCs were just over a billion units. If you believe, like me, that during this decade smartphones will replace the majority of feature phones now in use, then by 2020 we can expect at least 3 billion smartphones in operation all around the world.
Will they all be controlled by American companies? Has America already won the smartphone wars?
The answer is – it’s too soon to tell.
Right now, nearly every single one of the nearly 200 million smartphones that sell each single quarter are made by Android, which is owned by Google, or iPhone, made by Apple. Canada’s RIM continues to sell about 5% of the total number of devices, though Windows Phone, backed by Microsoft, is catching up. Given Microsoft’s global reach and resources it’s only logical to assume they will supplant RIM for the third-place ecosystem.
This means, Google Android, Apple iPhone and Microsoft Windows Phone will control the operating system of the new personal computing industry – and access to the web. Only, it’s not just operating systems. For content, Apple’s iTunes rules the world. Microsoft and Google are spending furiously to catch up. Apps – this new computing era’s software – are or soon will be accessed primarily via Apple’s App Store, Google Play and Microsoft’s ecosystem. Better still, for America, is that the VC industry and app developer funds are disproportionately concentrated here.
Payments, via iTunes, Google Checkout, Paypal, Square and a few others are America-centric. The mobile search market is dominated by Google. Apple’s Siri possibly leads in voice-based mobile search. Two of the most popular smartphone-centric services on the planet, Twitter and Facebook, are American. Similarly, we can’t discount the global popularity of YouTube, Gmail, Hotmail and other American-led software and services.
Can anyone catch up?
Again, the answer is…maybe.
Despite the hundreds of millions of dollars Microsoft has funneled to them, Finland’s Nokia continues to sell embarrassingly few Windows Phone devices. We must assume that Nokia will be forced to look for additional opportunities, such as a renewed focus on their low-end pseudo-smartphone Asha line, popular in India. South Korea’s Samsung easily dominates the Android market. They sell nearly as many Android devices as the next 10 Android handset makers combined. As I wrote previously, Samsung’s growing clout over the Android ecosystem, and their aggressive desire to mimic the Apple iPhone business model might lead them to take full control of Android.
We cannot overlook Asia’s role in the smartphone wars. Every iPhone, for example, is made in China. Though Apple manufacturing partner, Foxconn, has production facilities in Brazil, and unreliable rumors suggest they may one day build a factory in America, the fact remains that Apple is heavily reliant on China for manufacturing. Moreover, the top Android handset makers are all based in Asia. This includes Samsung, Huawei, Sony, LG, ZTE and others. Controlling the manufacturing of hardware not only gives Asia a prominent role in the ongoing smartphone wars, it affords them front-line knowledge on hardware innovation.
Moreover, the Asia market for smartphones is massive. Just three countries, China, India and Indonesia account for 2.5 billion of the world’s people and they have embraced mobile connectivity. Their unique needs, access points and budgetary constraints will have a stark influence on the ongoing development and success of all smartphone platforms.
Presently, America is dominating the smartphone wars. The odds of any non-American company building an OS and/or crafting a successful ecosystem alternative are exceedingly slim. But innovation, like smartphones themselves, are everywhere. In Africa, feature phones still dominate. So does M-Pesa, a Kenya-based mobile phone payment and money transfer platform. If the smartphone becomes the wallet – and the point of sale — then thanks to M-Pesa, Africa may lead the world in instant, mobile-based payments. There are also extremely popular, if localized services in Japan, Brazil, China and elsewhere. For example, China’s Sina Weibo, with about 400 million users, is nearly as popular as its counterpart, Twitter, with just over 500 million users.
The smartphone wars are not over. The iPhone, which led the global revolution in smartphone adoption, is only five years old. This technology and this industry are moving at light speed. Anything can happen, and from anywhere. It is a truly global phenomenon.