Monday, May 14, 2012

iOS: Racing towards 1Bn devices

The tech wars for our attention - and our pockets - have silently begun without our noticing it.  Companies have different strategies based on their relative strengths and overall intent.  Microsoft, for instance, has realized that PCs have become largely commoditized and "corporate" and is aiming to take over our living room using the XBox360, which has sold some 65-75 Mn devices.  Google has chosen to licence its Android OS, in a clear attempt to copy the strategy followed by Microsoft with Windows, and while Amazon aims to sell truly anything, Facebook is going silly trying to be the portal to our lives.
Apple has taken the consumer by storm, invading our lives with over 629 million devices since the launch of its first iPod.  These iOS devices looked innocent at first; a nice MP3 player, a nice phone, etc., but after the iPad's launch it is clear there is no innocence but a crude intent to build an ecosystem fueled by iTunes and its almighty selling powers to take over our lives.  iTunes has sold over 15 billion songs and 25 billion applications at a rate of 24 songs and 40 applications per device, and the iOS cumulative revenue can be estimated north of U$S 250 billion.
The really interesting part is that each new iDevice has outperformed its predecessor - the iPhone, 20 quarters after launch, has sold 3.2x more devices than the iPod.  This means people are more educated on the gadgets and accept them faster.  The iPad, a large bet since Apple was the first-mover in this space, has so far (8 quarters after launch) sold 3.2x more devices than the iPhone and 51x more than the iPod.
At whichever rate the tech wars continue, the iOS installed base continues growing rapidly and the positive feedback loop is already under full steam, generative direct and indirect network effects for users, developers and manufacturers of complementary iOS products.  Competitors will have to find a way for users to trade in their devices - all 600 million + of them - for their own, and win their trust to sell them content and applications.  If someone is up for it, it seems, in the best case, it will take many years to accomplish ... Steve Job's legacy is, for now, well guarded.

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