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Why Android’s Smartphone Marketshare Doesn’t Matter

Why Android’s Smartphone Marketshare Doesn’t Matter

This past week at the Le Web conference, Google CEO Eric Schmidt was asked why he thought most mobile developers were choosing to develop for iOS first, and Android second. Schmidt replied, “Six months from now you’ll say the opposite. Because ultimately applications vendors are driven by volume. And the volume is favored by the open approach that Google is taking.” (See video here, answer is at 41 minutes)

I’m not sure if he actually believes that, or if it’s just what he has to say because he’s the CEO of Google. In either case, I think he’s wrong.

Chart: Smartphone Marketshare

Market Share

Schmidt is arguing that because there are more Android phones than iPhones, it only makes sense for developers to focus their efforts on the larger platform. He’s right in that Android currenty has almost twice the market share as iOS, and marketshare is a big part of the puzzle (just ask anyone thinking about building a Windows Phone app), but market share doesn’t tell the whole story. More

The coming revolt against Apple

Over the last few years, Apple has solidified itself as the cool kid’s legitimate alternative to the Microsoft mainstream. They have excelled at packaging hardware and software together in sexy ways with usability that has put all the first-movers on defense, scrambling to catch up. The iPhone has been a smash hit and helped them expand their Mac market share substantially. broken-iphoneBut when you’re at the top of the cool mountain, it becomes increasingly difficult to keep your footing. There are storm clouds on the horizon, and there’s a revolution brewing.

The torches are being lit over in iPhone land. The iPhone has been a cult success in spite of itself in many ways. Other phones had better hardware and more features, and the iPhone was missing long standard features like MMS. But nothing matched the allure of the all touch screen form factor and the brilliant iPhone OS. When the App store was released, that made up for many of the (still persistent) feature deficiencies. But now that App Store is becoming a real problem for users and developers alike.

No soup for you!

The biggest issue is that the App Store is the only way to get your software on an iPhone without hacking it. Apple is the gatekeeper, and decides what goes in and what doesn’t. They claim it’s to maintain quality standards, and phone stability, which is a noble goal. The problem is that there are some gray areas as well. For example, applications that contain profanity are regularly rejected (including dictionaries). Ok, maybe we can overlook that. Then there are apps that are rejected because they might use too much of AT&T’s bandwidth, like the sling player. Other phones on AT&T have the sling player, but fine, maybe we can overlook that too. Then there are apps that “replicate existing iPhone functionality”, like competing browsers such as Opera, or most recently, Google’s Voice app. Now it’s getting harder to overlook.

Our phones are less appliances, and more specialized and miniaturized PCs.

Many people, especially techies like me, don’t really see much distinction between our phones and our computers. Our phones are less appliances, and more specialized and miniaturized PCs. My iPhone basically has the same hardware as the Pentium III PC I took to college a decade ago, only it doesn’t weigh 20lbs. It runs a proper operating system (a stripped down version of OS X in fact), and has much of the same software and applications that I use on my desktop. For all intents and purposes, it is a PC in an ultra mobile form factor (PC here being the general term for a ‘personal computer’, not necessarily a Windows computer).

So imagine if Microsoft said “you can create any app you want for Windows, but it has to go through us first for Quality Assurance.” And then imagine that MS rejected Firefox because it duplicated the built in functionality of IE, or it rejected violent games due to ‘morality standards’, or it rejected applications because they might use too much of your ‘unlimited’ DSL bandwidth, or in some cases, arbitrarily rejected your app for vague and unexplained reasons? It’s hard to imagine that going over well, but that’s exactly what Apple is doing with the iPhone App Store.

A lot of developers have poured a ton of money into development for the iPhone, and a lot of cool apps have been released (I’m raving about the USAA banking app today). But the recent decisions by Apple must be giving developers serious pause.

g1-hpp

Google Android (G1)

It’s one thing to invest a couple hundred thousand dollars into an app and then not have it sell well, it’s a whole other issues to invest that kind of money and not be able to sell it at all because Apple won’t allow it into the store.

Meanwhile, Google has built their own mobile OS, Android, on open source principals. Anyone can develop any app for it, no different from a desktop computer. Android runs on a variety of different devices, across multiple carriers, and compared to the iPhone is looking like a much more free environment.

Certainly AT&T is a big part of the problem – and is taking it’s fair share of heat as well. But Apple should be holding the cards here – their exclusivity contract is nearly up, and they don’t have to play by AT&T’s rules.

Solutions

Developers can then submit their apps for review to get into Tier 1, but know that they can always fall back to Tier 2 if there’s a problem.

I don’t like to be critical without a proposed solution, so here is what I would propose Apple do to calm the revolt. First, don’t renew the exclusivity contract with AT&T. If they’re influencing decisions here, give users the option to use a carrier who won’t. Second, create a tiered App Store. Tier 1 is what we have today – verified software by Apple, no adult content, low risk, with extra functionality like push notifications. Tier 2 is what is available on the black market of jailbroken iPhones today – lacking certification and quality assurance, but providing users and developers the freedom to connect as they should in the computing world, without a middleman. Enable parental controls so that parents can configure phones for their children that only access Tier 1, but we adults can assume the risks of Tier 2. Developers can then submit their apps for review to get into Tier 1, but know that they can always fall back to Tier 2 if there’s a problem.

Apple is exposing a soft underbelly here that you can bet Google and Microsoft will be aiming for. Google’s alliance with Apple is all but dissolved at this point, with Google going it alone with their own devices. Microsoft has some new things cooking with Windows Mobile 7 as well, and it’s getting harder to arbitrarily hate everything Microsoft. Apple needs to get it’s act together or they will find themselves as the anti-competitive villain they claimed to be fighting against.

Customer Service is the new Marketing

Customer Service is the new Marketing is a mantra at Mural, and something we emphasize with our clients. We always make sure that customer service is a core value of our clients marketing efforts, because we believe that it’s an essential skill set in our new internet driven economy. I was recently contacted by an old client I did some work for about 4 years ago that proves how true this is.

This company is a family owned, but multi-million dollar HVAC company in the North Texas area. It was started by the current owner’s father decades ago, and has always maintained that small, family owned, low tech quality that can be a very endearing trait. They have done a lot of things right in the history of the company that has helped them grow to such a large size. They are extremely picky in who they hire, and hold them to very high standards. There are random drug tests, weeks of training, no cursing, no smoking, and the work day ends when the job is done, and not before. If you’re going to have some strangers in your house all day, you can probably appreciate the standards they enforce. They’re a bit more expensive than the independent guys, but they’ve worked hard to establish a level of trust that’s hard to beat.

The Internet has become a huge megaphone for consumer feedback, and customers who feel slighted or cheated have a really loud voice.

That is, until the last year or so. They’ve serviced over 100,000 homes around DFW just in the last few years, mostly for happy satisfied customers who have trusted their business for years. But as you can imagine, at such scale, screw ups happen. A bad egg tech slips through and pushes unnecessary repairs on customers, people with no A/C in the Texas summer lose patience when it takes hours longer than expected to get a tech out, and sometimes they have been slow to respond to unsatisfied customers who need repeat service. These types of issues have probably been with them forever, and surely plague their competitors as well, but there’s been a shift in power over the last few years. The Internet has become a huge megaphone for consumer feedback, and customers who feel slighted or cheated have a really loud voice.

Customers for this company have started to speak up when things go wrong. Things really came to a head for them when a collection of complaints about the company’s policy of refusing to turn gas lines back on if they detect a crack and possible carbon monoxide leak in a furnace were published in a local paper, and loyal customers started calling to cancel their service. When they called me, they were interested in an agency that could help them with a public relations problem. So I started looking into it – a google search quickly turned up the infamous article, as well as a couple dozen other review sites littered with 1-star reviews from angry customers. Anyone searching for this company online would likely be turned off from them very quickly, and would probably be warning their neighbors. The reviews were scolding. It would not surprise me at all if google is costing this company millions a year in lost revenue.

It quickly occurred to me that the problem was not one that could be covered up with positive PR to compete with the negative press. That would just be a bandaid on a gunshot wound. What was needed was a swift and dramatic shift in the customer service policies of the company to make sure as few customers as possible ever got angry enough to bother writing a bad review.

I made several recommendations to the company to help remedy the situation. I consider these points of sound advice for just about any business today:

  1. The first step is always admitting you have a problem. Make the decision to change what you need to get the problem fixed.
  2. Be immediately responsive to any complaint, and give it priority over new business.
  3. Be proactive – ask customers if they’re satisfied, and if not, what else you can do for them.
  4. Online communication must be two-way. Don’t just shout out into crowds, and don’t leave your unhappy customers to do the same. Connect with them! Monitor the web for new reviews of your business, monitor social networks like twitter. Dedicate a CSR to ‘online customer service’ and empower them to remedy any complaint found online.
  5. Do it publicly – don’t try to counter-review yourself online anonymously, but post a neutral review with your Online CSR’s direct phone number and email so anyone about to write a review sees that there’s a recourse. Don’t avoid problems, embrace them, solve them publicly, and demonstrate your commitment to customer satisfaction.
  6. Get involved with online communities like GetSatisfaction.com. Encourage your customers to visit and post an honest review. You can’t avoid the conversation, so you might as well embrace it.
  7. Commit to the long haul. This isn’t a campaign you run for 3 months and then slack off. This is as important, if not increasingly more important than traditional advertising. Consumers are wary of advertisements, but trusting of honest communication. This needs to be a permanent establishment of the company.

The gears are turning over at the HVAC company, and new policies and strategies are now being drafted. If they play their cards right, in a year they could very well have completely turned the tide, and converted a liability into an asset. The brave new world we find ourselves in requires a new set of strategies for companies to effectively engage with customers online, and companies ignore it at their peril. Google can be your savior, or your executioner – it’s up to you.