Apple's iPhone and Google's Android both utilize open platform strategies in the smartphone industry. Apple's strategy is to create an attractive platform for both users and developers through its exclusive partnership with AT&T and App Store, while Google aims to widely adopt Android through its free and open source development model. Both platforms have seen significant success, with the iPhone selling over 17 million units and having over 85,000 apps developed, while Android expects 18 devices by end of 2009 running its open source operating system.

1. Open Platform Strategy in the
Smartphone Industry:
A Comparison of Apple’s iPhone and Google’s Android
Strategy and Competitive Advantage 6114
Juan Pablo Cordoba
Jessica Hyde
Annabelle Johnson
Nattaporn Yaemsaard
MASAGUNG GRADUATE SCHOOL OF MANAGEMENT

2. What is an Open Platform?
 A marketplace provided by a business in order to facilitate
consumer, developer, and manufacturer interactions
 Open Platform does not mean Open Source
Open Platform Open Source
• ex. Apple iPhone • ex. Linux
• Programmers can create • Programmers can contribute
programs that function and interact code directly to the
with the platform or operating source, thus allowing
system modifications and
improvements to the original
source code

3. Evolution of the Open Platform
Strategy on Smartphones
 RIM (Research in Motion) first to dominate in Smartphone industry
 Blackberry models originally released in 2002
 iPhone 1st generation released in 2007
 Debate regarding 3rd party developers
 Strategy now centered on creating most desirable platform via best
applications
 850 + software companies designing apps for Blackberry
 250,000 + iPhone app developments kits downloaded
 Applications to drive sale of handsets
 Google seeks to be a disruptive player with its Android Platform
 The first commercially available phone running Android is the T-
Mobile G-1. By the end of 2009, Google expects 18 Android
devices to be available via a variety of carriers

4. What is Apple’s Strategy for the
iPhone?
 Be the first mover
 Create something that is difficult to emulate
 Make sure the platform is attractive to both users and
developers
 Exclusive partnership with AT&T
 Use the online App Store to make money
 Apple generates $60 million to $110 million in revenue per quarter
from the App store*
 Allows software developer outside Apple to create applications
 Inexpensive and rapid development of a variety of apps
 Make the iPhone a part of customers’ lifestyle
 Design around customer needs and innovative technology
 Apps can find restaurants, calculate tips, track weight loss
*WSJ, Sept. 2009

5. The iPhone Platform
Suppliers Users
AT&T
AT&T Consumers
Third-Party
Application
Developers

6. How Successful is the iPhone?
 17 Million iPhones have been sold
 Over 85,000 applications
 More than 50,000 developers
 2 Billion App downloads
CNET, Sept. 2009

7. What is Android?
 A Mobile Operating System
 A free software development kit is available to
write apps for Android using the programming
language Java

8. What is Google’s Strategy?
 Google provides a mobile phone platform that is
easy and inexpensive for the entire industry to
adopt
“There are tons of devices out there...
In the future, maybe each one of those will run
Android” –Dave Bort, Google Android Team

9. The Android Platform
Suppliers Users
Many Open Source
Developers
Customers of Many
Many App Developers Phone Carriers
Several Device Users of Many Devices
Manufacturers
Several Mobile Phone
Service Providers Low Cost to Users

10. Google-Android Revenue
Model
 Google Voice:
 Unified communications service VoIP
 Google as a phone provider
 Mobile Advertising
 The market is expected to grow to
over $24 billion by 2013*
*ABI Research, 2008

11. Best Practices and Challenges
5 Forces
Buyers  Know your consumer
 What do they care about? Price, openness?
 Provide quality control and security
 Consumers don’t like fraud, viruses
 Watch out for PR fiascoes -i.e. Shaken Baby App
Suppliers  Attract developers, manufacturers
 Keep these valuable resources happy or they’ll leave
 Balance the needs of users and suppliers
 6 distinct groups involved with Android

12. Best Practices and Challenges
Cont’d
5 Forces
New Entrants  Be first
 Breakthrough technology creates a barrier
Rivals  Differentiate your product
 Become the standard, become indispensible
Substitutes  Build a sustainable growth strategy
 Analyze the situation, make a plan, set goals
 Capture value and maintain control

13. The Next Step: Open
Innovation
 To be competitive, companies must:
 Use external and internal ideas
○ Google bought Android
○ Apple acquired advertising company Quattro Wireless
○ Open Handset Alliance
○ Kraft, Starbucks have websites to gather ideas
 Use external and internal ways to bring ideas to the
market
○ Set up startup companies and licensing agreements
○ YouTube, Android Market, iTunes

14. Sources
 Chesbrough, Henry, Wim Vanhaverbeke and Joel West, eds., Open Innovation:
Researching a New Paradigm. Oxford: Oxford University Press, 2006.
 Wingfield, Nick. “Sizing Up Apple’s App Store.” WSJ Online. 24 Sept. 2009. 3
Oct. 2009. http://blogs.wsj.com/digits/2009/09/24/sizing-up-
apple%E2%80%99s-app-store.
 Farber, Dan. “What if Apple really opened up the iPhone?” CNET News 14
March 2008. 3 Oct. 2009. http://news.cnet.com/8301-13953_3-9894180-
80.html?tag=mncol;txt.
 “Mobile Marketing Revenue to Hit $24 Billion in 2013.” ABI Research. 14 Jan.
2008 http://www.abiresearch.com/press/1037.
 Open Handset Alliance. “Open Handset Alliance FAQ”, Nov. 2007. 3 Oct. 2009.
http://www.openhandsetalliance.com/oha_faq.html.
 Rao, Leena. “When Will Apple Hit 1 Billion App Downloads?” TechCrunch. 10
Apr. 2009 http://www.techcrunch.com/2009/04/10/when-will-apple-hit-1-billion-
app-downloads.
 Richtel, Matt, “Google: Expect 18 Android Phones by Year’s End", The New
York Times. 27 May 2009.