A Platform Fit For A King

It was recently reported that Apple iPhone users were the most loyal smartphone owners with over an 80% retention rate (in contrast to Blackberry’s 48%). This is big news and presents a long-term challenge for Windows Mobile and Google’s Android.

In a January (2010) blog post I attributed platform loyalty to more than just user interface and network availability. Additionally, I stated that a consumer’s investment in applications – many of which do not operate cross platform – would play an important factor:

“Every app purchased on a mobile device represents a small investment by a mobile user in their respective mobile ecosystem.”

Today, Apple far outpaces Google in terms of dollars generated through app purchases. As we’ve learned from Microsoft, there is big money in software. In a staggering figure, Apple accounts for roughly 85-90% of all dollars spent on mobile applications.

These numbers are alarming when one considers that Apple accounts for only 5% of global market share for mobile devices. This is a massive problem for Google, and the longer it goes unchallenged the bigger the problem will become.

The study released by GfK regarding platform loyalty further illustrates the dangers posed by Apple to its competitors. Apple’s 80% retention rate can easily be tied to several factors beyond investments made into the App Store. The study underscores that unseating current Apple users is an uphill, if not futile effort. Imagine how this will translate to tablet market where the iPad enjoys a 75% market share.

Fortunately, the smartphone market is anything but mature with a global penetration rate of 27%. There is still plenty of room for platform growth in the tablet market. The mobile market, whether it be a smartphone or a tablet, represents the future of computing. In two years we’ve seen companies who’ve pioneered and ruled the marketplace diminish in influence, and dance with death (RIM, HTC, Nokia, Motorola etc.).

Microsoft dominated in the 80’s and 90’s and what we are seeing now is a battle for the new king of computing. With no apparent heir, what’s becoming apparent is that a cohesive, cross-device platform will rule the land. With a king yet to be crowned, iPhone loyalty, iPad market dominance, App Store dollar spend and the introduction of iCloud, seem to be positioning Apple as the frontrunner for succession.

Categories: Mobile
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