In 1985, I got my very first home computer: a Commodore Amiga 1000. At the time, it was awesome: great graphics, great sound, “real” multitasking, and so forth. Never mind that you spent half your life shuffling floppy disks around. Never mind that I kept my head full of Epson escape codes to use with my word processing program to get what I wanted out of my printer. No, no, the Amiga was wonderful stuff.
Let’s look at the Amiga’s generation. Starting with the IBM PC in 1981, the PC industry was in the midst of the transition from 8-bit micros (Commodore 64, Apple 2, Atari 800, BBC Micro, TI 99/4a, etc.) to 16/32-bit micros (IBM PC, Apple Macintosh, Commodore Amiga, Atari ST, Acorn Archimedes, etc.). These new machines each ran completely unrelated operating systems, and there was no consensus as which would be the ultimate winner. In 1985, nobody would have declared the PC’s victory to have been inevitable. Regardless, we all know how it worked out: Apple developed a small but steady market share, PCs took over the world (sans IBM), and the other computers faded away. Why?
The standard argument is “network effects.” PCs (and to a lesser extent Macs) developed sufficient followings to make them attractive platforms for developers, which in turn made them attractive to new users, which created market share, which created resources for future hardware developments, and on it went. The Amiga, on the other hand, became popular only in specific market niches, such as video processing and editing. Another benefit on the PC side was that Microsoft enabled clone shops, from Compaq to Dell and onward, to battle each other with low prices on commodity hardware. Despite the superior usability of a Mac or the superior graphics and sound of an Amiga, the PC came away the winner.
What about cellular smartphones then? I’ve got an iPhone. I have friends with Windows Mobile, Android, and Blackberry devices. When the Palm Pre comes out, it should gain significant market share as well. I’m sure there are people out there who love their Symbian or OpenMoko phones. The level of competition, today, in the smartphone world bears more than a passing resemblance to the competition in the mid-80’s PC market. So who’s going to win?
If you believe that the PCs early lead and widespread adoption by business was essential to its rise, then you could expect the Blackberry to win out. If you believe that the software/hardware coming from separate vendors was essential, then you’d favor Windows Mobile or Android. If you’re looking for network effects, look no farther than the iPhone. If you’re looking for the latest, coolest thing, then the Palm Pre sure does look attractive.
I’ll argue that this time will be different, and it’s the cloud that’s going to win. Right now, what matters to me, with my iPhone, is that I can get my email anywhere, I can make phone calls, and I can do basic web surfing. I occasionally use the GPS maps, or even watch a show purchased from the iTunes Store, but if you took those away, it wouldn’t change my life much. I’ve got pages of obscure apps, but none of them really lock me into the platform. (Example: Shazam is remarkably good at recognizing songs that it hears, but the client side of it is a very simple app that they could trivially port to any other smartphone.) On the flip side, I’m an avid consumer of Google’s resources (Gmail, Reader, Calendar, etc.). I would never buy a phone that I couldn’t connect to Google. Others will insist on being able to connect to their Exchange Server.
At the end of the day, the question isn’t whether a given smartphone interoperates with your friend’s phones, but whether it interoperates with your cloud services. You don’t need an Android to get a good mobile experience with Google, and you don’t need a Windows Mobile phone to get a good mobile experience with Exchange. Leaving one smartphone and adopting another one is, if anything, easier than transitioning with a traditional not-smartphone, since you don’t have to monkey as much with moving your address book around. As such, I think it’s reasonable to predict, in ten years, that we’ll still have at least one smartphone vendor per major cellular carrier, and perhaps more.
If we have further consolidation in the carrier market, that would put pressure on the smartphone vendors to cut costs, which could well lead to consolidation of the smartphone vendors. We could certainly also imagine carriers pushing on the smartphone vendors to include or omit particular features. We see plenty of that already. (Example: can you tether your laptop to a Palm Pre via Bluetooth? The answer seems to be a moving target.) Historically, the U.S. carriers are somewhat infamous for going out of their way to restrict what phones can do. Now, that seems to be mostly fixed, and for that, at least, we can thank Apple.
Let a thousand smartphones bloom? I sure hope so.