Proctele apps in the App Store

Proctele apps in the App Store
Click the picture to see Proctele apps in Apple's App Store

Tuesday, July 15, 2014

What's the Difference Between a Smartphone and a PC?

There's a fundamental difference between iPhones and Android phones. iPhone software and hardware is controlled solely by Apple. Android software is in Google's hands and the hardware running Android software is in multiple hands. Apple's model generates enormous profits, while the Android model is a low margin one, at least for the hardware makers.

How Samsung, LG and HTC would love to be like Apple! They'd love to have their own sleek hardware running their own fantastic software. However they've chosen to let their smartphones run Android, which they don't own and don't control. They chose this path because they don't think there's room for more than two platforms. That's the general consensus.

I think there's an even simpler reason. They know they can't come up with both hardware and software that can beat Apple's. Going it alone is much more difficult than choosing either hardware or software, but it pays handsomely - if you're successful.

So why did I choose the headline about smartphones and pc's? It's because PC history is repeating itself in the smartphone market. In the PC arena you have those trying to make attractive PC's and the sole software maker Microsoft. The hardware makers barely survive while Microsoft reaps all the profits. This is a striking similarity.

What can we expect then in the Android market? We can expect to see low prices and dull smartphones. Consumers will prioritize price over anything else when they buy Android devices. There will be some rather nice smartphones too, but not many. Those willing to pay premium price for a nice device will go for iPhones, as they already do.

I think hardware and software must always be controlled or owned by the same company, if truly great results are to be achieved. It would be interesting to know if any economists have studied the subject.

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