Technology is our friend: Why Android is the game changer
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March 31, 2010

Why Android is the game changer

It’s only a few days until the iPad hits the shelves, and as we know from suppliers, they are prepared to deliver 8-10 million units in 2010 alone. Everyone rants about if and how the iPad may be a game changer. It will be a beautiful device, and seeing what magazines could do there (check the Wired Demo) is definately exciting. But changing "the game"? No. The game is already there, it is old, it is learnt, and the iPad just widens its scope, but it changes nothing. Not for the magazine and newspaper industry (impressively shown by TBI Research), not for movies, TV shows or games – at least not on the long term. The iPad is merely just another mosaic stone to Apple’s already established media ecosystem. The mechanics of this system, the way it works, are already there and will not be influenced by the iPad. But the Apple system will either change significantly – or destroyed. Let’s have a closer look:

Any system consists of several elements in interdependencies towards each other, in this case organized in levels. In Apple’s System, there’s input from content (and app) producers who will have to get Apple’s approval to publish their stuff and of course have to accept the terms and conditions defined by Apple. But at least there are many of them. Let’s call this the “Genisis Level”. On the distribution level, there is just iTunes. In many markets there is even only one player at the access level (and Apple protecting the respective participant by playing cat and mouse with jailbreakers), and on the device level, of course, there is just one single player organizing the output of that system: Apple with its i-Range of devices. Apple is operating several toll booths on its roads. Building and running such an ecosystem is no crime. But it is old-school, closed, based on controlling (hence limiting) the number of participants within that system, be it a gradual limitation (among content providers) or radical limitation (on all other levels).  Therefore, competition is limited as well. And as we know, competition is what drives innovation, low prices, and progress in general. A system that allows competition will therefore outrun any closed system. History taught us..

... some lessons, and we dont even have to use the i-mode vs. WAP analogy. VHS for example has won against Betamax and Video 2000 because Phillips, owning Video 2000, controlled the content (and did not allow porn) and wanted to build the most significant share of Video-2000-devices by itself. Matsushita (with JVC and Panasonic) allowed porn and aggressively gave away licenses to direct competitors to build VHS devices, on the short term limiting the potential profits with their own devices.
But on the long run, this secured VHS’s win over the other systems: Competition on the device level led to better products, lower prices and higher innovation rates, and openness at the “Genisis Level” led to a higher choice for consumers.
Or let’s see how the Atari 2600 and Mattel’s Intellivision vanished from the market. They were extremely closed systems, locked consumers in on their end devices and dictated who could offer what kind of game in which physical form on their system – limiting the number of game suppliers and therefore limiting free and open competition. Then the Commodore 64 came, where everyone could produce games due to an open programming language, where open standards (datasette, floppy disk) were used for distribution, where competition existed on all levels besides the end device. Guess who offered better games at lower prices.

Now let’s have a look at Android. The degree of openness a system offers is defined by how freely anyone can become a participant at any level and can offer his contents, services or products. And Android is very open: Anyone can use it for any device, from a tablet PC to a smartphone, a car or a fridge. 
And with its Apache license, competition among device manufacturers is even enhanced, because you can design your own version of Android without having to play it back to the open source community. HTC Sense (left) outscoring Google's own phone interface in usability is a good example for that. Access can be offered by any network. And anyone can publish any app and any content, while the Android Market’s terms and conditions basically consist of reminding participants to stay within their respective local legal boundaries. So besides the Android Market itself (and Google Checkout as a payment system), there is a maximum degree of openness, hence competition. This leads to a huge diversity of devices of any kind at any price range, and will soon lead to a s…load of content and apps.

Competition is the driving force for any system to adapt to the future and keep moving
- and this counts for competition among systems as well. Apple may manage to intrinsically motivate themselves to build great hardware, but they won’t be able to compete with simply the rest of the world. Android is gaining market share rapidly. With AdMobs latest mobile traffic stats, it came close to even with the iPhone. 

Once Android gains real momentum, there’s no stopping it, because everyone is free to participate in that system, forcing everyone else to try harder, be better, cheaper, faster.

So here’s how Android will be the game changer: Apple will have to open its system significantly (and, for example, license its OS to other manufacturers or allow competitive shops within iTunes or sell data formats that can be easily transferred to other devices as well) – or be destroyed.