Entrepreneur Watch

Will Steve Jobs make a cheap iPhone?

Sources told Peter Burrows at Bloomberg BusinessWeek that Apple is working on a small, cheap (and out of control?) version of the iPhone to slow the infiltration of the Android from Google. 

Really, really interesting, and a major strategy shift rom Steve Jobs if true.

Since his comeback, Jobs has seemed content to stick to his pre-firing strategy of capturing the high end of markets and letting the "clones" take the bulk of the business. That happened in PCs, where imitations of the Mac OS (a product from Microsoft called "Windows") took over the PC business, leaving the Mac as a niche player. An important, cutting-edge, Mercedes-type niche, but still a niche.

Jobs has seemed willing to continue that strategy in smart phones and now tablets, letting Google play the old Microsoft role: Imitate Apple's software and license it to all hardware makers. That means Micros- er, Google, sells more units and attracts more apps from the independent market over the long-term.

It's been working for Google. Canalys says Android phones have started taking over current sales of the smart phone market.

At the end of 2009, Android captured 9% of smart phones sales, while iPhone got 16%.

One year later, Android took 33%, iPhone 16.0%.

(Raw numbers from Canalys here)

I figured Jobs was happy with this approach. After all, Apple's profits and stock price are outstanding. But I've had a bad habit of underestimating him. I admit it. He's a genius. (Well, I've always admitted that.) He's smarter than I. He's the greatest pioneer since Thomas Edison said "Let there be light bulbs." He will continue to surprise everyone, no matter how used we've become at being surprised by him.

Perhaps Jobs is entering a new phase: Undisputed market leader. Bad for Google if he decides to do that.

Maybe he's still just thinking about this mass-market iPhone. Now that the iPhone is coming out on the Verizon network, we'll have to see if Android will continue its momentum. If not, Jobs may not have to make this change. Or maybe he'll do it anyway.

Hell, what do I know?

 

 

Nokia + Microsoft vs. iPhone vs. Android

Ed Burnette at ZDNET has a funny interpretation of the announcement that Microsoft and Nokia are teaming up to create a "new ecosystem" in smart phones.

Right.

I'm always wary of underestimating Microsoft. It tends to create good products after the third try. It created a nice search engine with Bing. And it's gaining. Hitwise reports that Google's market share is stalled at only 71% of the market, while Bing has risen a point or so in the last sixth months, powering up to about a 9% market share. Comscore says Bing is up to 11.5% while Google is only at 65.5%.

Besides, Bing is the new Yahoo! That oughta help.

So what's this new ecosystem stuff? A powerful new Smart Phone system based on Nokia hardware and Microsoft software! 

Microsoft has done it before. I mean, Windows for the PC became a great ecosystem. Sure, it got a little head start by becoming the OS for the IBM PC back in the Lower Cretaceous Period of the PC. And Bill Gates was smart enough to keep the right to license it to others and take over the PC world like the marsupials that took over the dead dinosaur niche and eventually evolved into Bill Gates.

But, hey, now it's got Nokia to give it a ... well, a fourth place head start. I'm sure the same strategy will work as other smart phone makers jump on the "Nokia Windows Phone Smart Phone" (NWPSP) standard!

OK, it doesnt have the pizazz of the "IBM PC" standard. They're working on that, I'm sure.

Ballmer points out that there must be millions of apps companies who already know how to build Windows apps -- you know, those folks that build apps for PCs, like Word, Excel, PowerPoint, etc. -- and are anxious to leverage their Windows skills for the smart phone market. Or, at least, the apps developers hope they will find themselves in the pole position once the NWPSP ecosystem takes off the way Bing has.

Already, Ballmer says there are over 8,000 apps for Windows Phone. The iPhone apps market, by contrast, is stalled at about 300,000 apps.

He also notes that by combining Nokia's power in phone hardware and Microsoft's huge advertising budget, the two of them will create "a shared roadmap so that we can really align and drive the future evolution of the mobile phone."

God knows that's needed. Steve Jobs and Sergey Brin don't seem to have much of a road map.

Nokia and Microsot are now the underdogs in this fight, so they're going to fight harder. And they've both been there before. About 30 years ago.

I'm sure they still remember how it's done.