Tag Archives: Samsung

Switching to iPhone after 2 Years on Android

19 Dec

I recently switched to an Apple iPhone 5s after 2 years as an Android user.  I had a Samsung S2 for half a year and then had been using a Samsung S3 for another 1.5 years.  After moving back to the US, I was increasingly disappointed with the selection and quality of apps offered on Android.  I was also increasingly frustrated by the lack of performance of the device.  So I ended up switching.

I don’t have a bone to pick in the whole open (Android) vs. closed (iOS) debate.  There are compelling business and product arguments in favor of both approaches.  This post is meant to merely highlight my views on the quality of both products from a user’s perspective. And in that regard, I think Apple is the winner.

The biggest difference you notice as an Android user is the selection the selection, stability, and quality of the apps on iOS vs Android.  For one, there are a number of iOS apps that just aren’t available on Android.  This is particularly true of any new app in the US.  And for those apps that are on both iOS and Android, generally speaking, the Android version is less polished.  The UX is worse, they crash more often, updates are pushed less frequently, etc.  On iOS, everything integrates more smoothly.  Facebook oauth is easier, for instance, or navigating from notifications to the actual apps is smoother.

Another huge pet peeve of mine on Android is all the crappy software the handset manufactures pre-load onto the device, in this case Samsung.  Samsung’s chat service (ChatON), Samsung’s app store, etc.  I don’t know who uses this stuff.  There are better versions of all these services from folks other than the OEMs.  Ultimately, the S3 was full of tech that just doesn’t quite work.  For instance, a facial recognition feature on the security screen that’s supposed to unlock the phone.  It doesn’t really work and it’s not secure, so why include it?  Compare this to the fingerprint scanner on the iPhone 5s, which works perfectly and is actually useful.

Android has its pros no doubt.  In terms of the hardware, there’s the larger screen.  This to me is the biggest plus of Android devices.  Once you’ve used a slightly larger screen, the iPhone feels cramped and typing is more difficult.  I expect Apple to introduce a larger screen option when it releases iPhone 6.  As we spend more and more of our online time on phones, having a slightly larger screen only makes sense.

The other thing you notice once you start using iOS after Android is how bad the autocorrect capability is.  On Android, Swiftkey is awesome – much, much better than the native iOS autocorrect.  I’m not sure why Apple isn’t better (they don’t do software well), but it isn’t.  And it doesn’t feel like it’s improved much over where it was a few years ago.  It may sound minor, but if you send a lot of email or other messages, you notice the difference between Swiftkey and Apple instantly.

All in all, I think Apple offers a more polished experience versus comparable Android devices.  I expect this to continue to give an edge to Apple in more developed markets, especially the US where handsets are carrier subsidized.  Outside the US, Android will continue to dominate (see here for more on this) given the range of price points it offers.

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Smartphone Adoption, Emerging Markets, & the Android Effect

17 Jun
There’s a huge explosion happening in smartphone usage.  Growth in penetration rates in developed markets has started to slow, but in emerging markets like China and especially places like India and Indonesia, smartphone ownership rates are still relatively low as a percentage of subscribers (see slide 40 of Mary Meeker’s latest Internet Trends report).

The main factor driving growth in emerging markets has been the decline in device prices being driven by cheap, local handset brands running pretty generic versions of Android, as well as the rise of Samsung as the premier Android handset maker.  In terms of local competitors, you have companies like Xiaomi and ZTE in China and Micromax and Karbonn in India.

Hardware prices are declining quickly and hardware is being commoditized by the use of low-cost contract manufacturers in China.  Also, the quality of the low-end Android devices being produced today is dramatically better than it was even 18 months ago.  They’re not iPhones or Samsung Galaxy level, but they’re quite good.  And for people using internet on their phone for the first time or having any internet access period, it’s more than adequate.

Most of the smartphone growth in emerging markets is going to Android.  In Q4 2012, ~70% of smartphones sold globally were running Android compared with 30% for iOS.  This is a significant increase in share over 2011.  Many of the market share losses from RIM, Nokia, etc. are accruing to Android.  The big point, though, is that most people in emerging markets cannot afford an expensive device and lower-end Androids are orders of magnitude cheaper than iPhones.

In addition to wealthier populations, the rise of the cheap Android device is less notable in the US because carriers subsidize a large portion of the handset price.  In the US, Android has ~52% of the market according to comScore and iPhone has 35% for the 3 months ending Nov 2012.  In India, an entry-level iPhone 5 retails for ~$800.  That same phone is $199 with a voice and data plan from a US carrier.  Of course wireless rates in the US are higher and you’re locked into a single plan for a fixed amount of time, but nonetheless the upfront investment in the device is relatively low.  At $199 or $299, it’s harder for Android to have as pronounced cost advantage over iPhone.

A couple of takeaways from all of this:
  1. Despite their impressive growth, I would be leery of investing in local handset brands.  They are producing a good whose price is consistently falling.  They’re also benefitting from the open runway that low smartphone penetration provides, but as ownership broadens, new purchases will be driven by the replacement cycle and their growth rate will fall.  Replacement cycles in emerging markets are longer as well, which exacerbates the problem.  Finally, I expect Apple to introduce a lower cost iPhone and also expect the cost advantage between “budget brand” Android handsets and “premium brand” handsets (i.e., Samsung) to narrow as the latter gets more aggressive on price.  We are on the upward part of a hardware cycle for these companies and I wouldn’t want to get caught on the tail end.  This isn’t to say that these aren’t great companies with impressive growth over the last few years, but just a reflection on their investment potential at this point.
  2. Hardware is hard.  This reminds me of the PC market.  You have punishing downward pressure on prices driven by ever declining component price declines and manufacturing efficiencies.  This isn’t the case in software and services.  Yes, as Apple and Samsung have shown, software can help differentiate your device and drive consumer preference, but it’s not an adequate bulwark against price erosion.  As Apple shows, margins still erode.
  3. Despite #1-2, there’s an opportunity for local players to build durable brands in their home country and region.  Clever marketing, pricing schemes, proprietary apps (thinks Messaging and Games), etc. can all help these players differentiate.  I wonder though if these become the Compaqs, Gateways, and Dells of their market.
  4. As many people are expecting it to do, Apple needs to introduce a lower cost iPhone.  It’s margins will decrease further if it does, but pure profit dollars should surge.
  5. Open source — in this case, Android — helps to commoditize hardware and to lower the cost of new technology adoption.
  6. The sheer number of Android users in markets like India and China (iPhone too) will be staggering.  Even if ARPU is low, there’s a huge opportunity for apps targeting these users.  WhatsApp and other mobile messaging apps might be the first examples of this.
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