From Andrew's piece:
Today's long overdue updates to Apple's iPhone line, which had been moribund for years, are going to squeeze some rival manufacturers to death. New iPhones at last means that Android, Google's smartphone middleware, will soon look attractive only for budget vendors selling into fast-growing emerging markets.
The problem, in a nutshell, is this. Why should you continue to make something at all if you lose money doing so?
The answer some big names will shortly come to is: "Sorry, we can't - we're bailing out." Because it's all about margins.
Back in 2008, Google made the consumer electronics industry an offer it couldn't refuse. We'll give you a operating-system platform that lets you make an almost-as-good-as-an-iPhone, so you can make profit margins almost-as-good-as-Apple's. Android was modern and it was "free", and manufacturers could tailor it. Neither Microsoft nor Symbian could compete, while RIM/BlackBerry milked its ancient platform for too long, until it too dropped out of contention.
He goes on to, slightly prematurely perhaps, predict the commoditised demise of the Android smartphone world, but it's a thought-provoking read.
Of course, the three companies concerned, Google (Android), Apple (iOS) and Microsoft (Windows), all have two things in common:
- they're looking not just to immediate smartphone share/profit/acceptance, but to success in a wider ecosystem involving tablets and laptops too
- they have deep, deep pockets and are unlikely to run out of cash anytime soon, meaning that smartphones and smartphone OSes can be something of a loss leader if needed
As a result, none of the three mobile operating systems (per se) are in imminent danger, though Andrew does make some good points about individual manufacturers. It really is tough to make money at the middle and high end of the market unless your name is Apple, which plays to very high end, luxury, high profit margin business.
Which all makes it especially interesting that Microsoft bought Nokia's Devices and Services business - yes, the best-selling Lumias were at the low end, but there were certainly high end models like the 1520, 1020 and even the new 930 which would have been tough to rely on for mass market profit, so an independent Nokia would have had to make some tough decisions about device line-up going forwards.