I’ve spent most of my tech reading time over the past few days reviewing the world’s reactions to Google I/O. Google announced some pretty cool stuff for Android, and the company clearly has Apple in its sights when it comes to market share. Even more interesting to me, though, was that the “Microsoft” didn’t seem to be on anyone’s mind. John Gruber put together a great read on the subject, so I’ll defer to him here.
As Gruber sees it, Google is taking its gigantic, Android-shaped bite out of Microsoft’s pie, not Apple’s. Google is the licensed OS player because it licenses Android for free, not on a fee-per-unit basis. That says nothing of Microsoft’s crazy volume requirements to turn a profit. The company currently charges something between $8 and $12 per handset. When you hold just 6.8 percent of the world market share, that license fee is a joke.
The volume game isn’t necessarily where you find the profits, either. Nokia sells a LOT more units than Apple, but Apple still makes a better profit. Microsoft is in an absolutely awful position to make a dent in the market. Hell, they still haven’t even launched a competitive platform. Microsoft was already too late when the iPhone launched three years ago. I have to thank John Gruber for this Ballmer quote about the iPhone launch, which I had never seen before:
“There’s no chance that the iPhone is going to get any significant market share. No chance. It’s a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I’d prefer to have our software in 60 percent or 70 percent or 80 percent of them, than I would to have 2 percent or 3 percent, which is what Apple might get.”
Well, Steve, I have bad news. The iPhone OS was just reported at 15.2 percent of the global market share. That 80 percent market share you were hoping for? Yeah, that’s never going to happen.
Source: Daring Fireball
