What Happens When iPhone Users Become the Majority?
While it seems that each one of Apple's iPhone generates more value for advertisers, developers, and general e-commerce than Android-based smartphones, Google could always point to Android's overall market share in response. While Android users may not be as valuable to business, there were always more.
But not for much longer. Through extrapolating out the data, while somewhat of a shaky exercise in such a disruptive industry, the iPhone will soon capture more than half of the U.S. smartphone market within a few years.
What does this mean for the smartphone market?
This is the expected date that the iPhone will become the most popular smartphone operating system in the U.S. with 50% market share, according to Horace Dediu of Asymco. This takes into account the growing market penetration of the smartphone industry as a whole, and the iPhone's ability to grow share with the industry. Right now, Android has 52% market share, iOS captures 41%, BlackBerry limps along with 4%, and Microsoft rounds out the pack with 3%, according to comScore.
What happens when the once premium-placed platform becomes the standard?
Building network effects
Greater adoption of iPhones means that Apple will continue to strengthen the power of its product and service ecosystem. With more users, more will use iMessage to communicate, iPhoto for pictures, iCloud to store their data, iTunes for media purchases, and users will want to tie it all together with other Apple products like a MacBook or iPad. As one study from last year notes, "Of the households that own Apple products, they own an average of three."
A less lucrative crowd
Struggles for other platforms
The fact that iPhone users are more valuable and will become the majority of smartphone users will hurt the ecosystems and potential of other platforms vying for users -- especially ones attempting to build a base from very little. This is because of how developers will choose which platforms to build on. Right now, they make the trade between a potentially more valuable iPhone user with the larger, albeit less lucrative, Android user (while developers who can afford to build for both do). In a future where iPhones not only have a more lucrative user but also the greater number of users, the cost to build for Android may not be worth the hassle.
And as BlackBerry and Microsoft know, one of the keys to gaining users is a healthy developer ecosystem. Both companies have offered plenty of incentives to developers to create applications. This year, Microsoft offered $100 per application for up to 20 applications for its Windows 8 and Windows Phone 8 platforms. BlackBerry offered developers a free development device along with software worth $400.
A growing Apple
The implications of Apple capturing the majority of the smartphone market could be impossible for other companies to reverse until another great technological disruption. However, such a look into the future must be tempered with the fact that BlackBerry once had a stranglehold on the same disruption-prone market. Apple could very well achieve 50% market share in 2015, but only if it keeps up its past performance.
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The article What Happens When iPhone Users Become the Majority? originally appeared on Fool.com.Fool contributor Dan Newman owns shares of Apple. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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