Google versus iPhone: The race has shifted--the lead now goes to late-comer Droid.

It's a suprise to many--especially Apple devotees!

Last week the A.C. Neilsen reported some unexpected findings: Apple's iPhone no longer leads the market in terms of prospective buyer's "most desired smart phone" in terms of their next purchase.  This change appears to be an inflection point, for during the the third quarter of 2010, most people who were surveyed [33%] said they preferred Apple's iPhone over Google's Android [26%].  However, that's all changed: During the first quarter, Google's shot up substantially to 31 percent and Apple's slipped to 30, now making Apple second.

Installed BaseWhat's going on in the market?

The installed Android base is now 10 percent larger that Apple's [see chart of Installed Base], at 37% over Apple's 27%.  A view of recent buys point to even more growth [see chart of Recent Buys]; 50% of new smart phones are now going in favor of Android.  

How this should be understood is, from a marketing point of view, not all that complicated or unexpected.  It's a page out of the lecture on the product life cycle and really little more.  Here's my simple take...

How does one explain this? 

Apple really gets all the credit for introducing to the mass market a consumer-friendly smart phone and then effectively pioneering that offering in a most ingenious and formidable way.  And that isn't to say that the promotion was so slick as much as it touted a terrific, innovative device.  

As with all product offering--however clever and wonderful they may be at first--there really is an upper limit to market penetration occurring which on the one hand completely satisfies market expectations and, on the other hand, doesn't trigger strong competitive reaction--but now with the capacity to offer an improved, albeit second generation, product to an already more knowledgeable, receptive marketplace.  

Recent buys

It's IBM all over again. 

The explanation for Apple's now subordinate share is not more complicated than that.  This all reminds me of the rule of thumb in the mid-1970s and early 1980s that went like this:  "You'll never lose your job [i. e., as an executive] for deciding to buy an IBM computer over any competitor"--IBM was just that dominant in the mind-set of, first the main-frame and then desk-top market.  But that approach only worked for a while, until innovative and more sophisticated competitors came into the marketspace to erode IBM's early and almost total preeminence.  

It is safe to go out and not buy an iPhone?

The same is true for smart phones today.  Until just recently, when one wanted to buy such a device, you'd have to have been crazy to not seriously consider each of Apple's iPhone models as they came along.  But now that's all changed; there's ample strength in the competition that's completely expected--and by what the market reports, welcomed by those not completely served by the only serious offering until just a little while ago!  

Good for everybody in the process, both sellers and buyers! It's a great marketplace to be in--no matter who you are!  What a country!  
_______________________________________________________________

Follow Keith's biz blog on Twitter for updates and see more of what he's reading about on his Facebook Page. If you are inclined, you can write him at kmurray@bryant.edu.