According to the prognosticators, Google Android is "destined" to overtake the iPhone by 2012, and Palm Pre, which hasn't even shipped yet, is already being touted as a "compelling alternative" to iPhone.
Plus, now that Apple's App Store is nearing a $1B business pace just nine months after launching, the competition (Google, Palm, RIM, Microsoft, Nokia) is so totally getting themselves one of them App Store "thingys."
But can the competition outflank Apple, and what is an App Store anyway?
Let's start with what it is not. An App Store is not simply an e-wallet or marketplace that you bolt on to your (pick one):
- Hardware device business;
- Open source smartphone software play;
- Next generation mobile service provider.
Sure, it includes elements of the above, but fundamentally, a cash register ringing App Store is the manifestation, not the root cause, of having built a thriving developer platform and "ecosystem."
So what is the root cause? Number one, is having a good toolset (known as a software developers kit, or SDK) that is compelling to developers. Why is this integral? Because it's the developers who ultimately make or break a platform by embracing it (or not).
If your eyes are glazing over, it's understandable, but know this: executing a tools and ecosystem initiative is REALLY hard because there are a lot of pieces that have to go right for the platform to take root. But when you get it right, it's a game changer.
In fact, it is unarguably one of the top 2-3 reasons that Microsoft became the PC gorilla in the desktop computing wars. They built a thriving developer ecosystem, and Apple didn't (or at least not on a par with Microsoft).
In the mobile realm, this implies a platform that is synchronized across hardware, software and service layers. This synchronization is necessary to deliver a superior user experience, which is what consumers now expect post iPhone (I cover this topic in more detail in my guest post for GigaOM, 'Android vs. iPhone: Why Openness Might Not Be Best').
As a result, for the competition, who may only control one or two of these pieces (e.g., hardware and system software but not the actual mobile service, or in the case of Android, software only), the reality is that this means that they will be solving a different problem than Apple's end-to-end solution, which integrates these disparate layers and then makes them extensible and programmable via the iPhone SDK.
And let's be clear, regardless of the metric that you choose to measure Apple's success in this realm (developers, downloads, dollars, margins or consumer engagement), the platform engine and ecosystem is unquestionably humming on all cylinders.
Beyond the $1B business momentum for App Store; AND beyond the fact that iPhone has already emerged as the number two smartphone maker (behind only Nokia/Symbian, whose market position is at best, tenuous); AND beyond the fact that the device unit numbers don't even include iPod touches (which run virtually the identical software, sans the phone); AND beyond the fact that there are over 25,000 applications available right now on iPhone/iPod touch (yielding over 500 million downloads to date), there is one "unfair advantage" I haven't even mentioned.
That is the iTunes media/content piece of Apple's strategy, which no one else offers, which in itself is over 65M users strong, which has made Apple the number one seller of music on the planet (larger than Wal-Mart) and which integrates into the same user experience, workflow and marketplace function set as App Store.
So, as a developer, who can ride on top of the iTunes media freight train; write applications that reach into one device and device software form-factor across all global carriers that sell the iPhone; and reach the carrier-free segment vis-à-vis the iPod touch, that is a lot of leverage to build upon.
Two parting thoughts. One is that the bar (for the competition) is about to get even higher, as on Tuesday, March 17 Apple will be holding a developer event to preview the 3.0 version of iPhone software.
Will it provide visibility into the next hardware refresh of the iPhone and iPod touch? Will it be the point when they introduce new form factors of devices powered by the platform, such as a tablet/netbook sized iPod Touch HD? Perhaps it's the moment, when they will begin supercharging Apple TV with the iPhone's platform and ecosystem goodness.
Or maybe, it's something entirely different. What if Apple decided to reinvent the digital camera as a smart, connected, programmable device? It would certainly sync up with some of the features they have recently baked into iLife, such as facial recognition and geocoding of photos.
Finally, when you listen to the analysts prognosticating the good, bad and ugly of Apple as an investment, keep in the back of your mind that the financial market really hasn't a clue on the economic and competitive impact of the App Store. When they finally figure that one out, I expect Apple's stock to see a positive pop.
The bigger deal is that I don't believe that most of the competition really has a firm grasp on what App Store means from a platform perspective.
Now, that's a story that is yet to be written.