2011 will be the year Android explodes
(Not this kind of smartphone growth.) Image by @boetter via Flickr — Ever-improving networks and a big hardware announcement that will send handset prices plummeting both point to smartphone growth in 2011 that could totally eclipse anything we've seen before.
Context & Ripple Effects
A year earlier, Forrester had Google Android taking just 10% of the smartphone market in 2010; Fortune's year-end call raises that trajectory sharply, arguing that ever-improving mobile networks plus a big unnamed hardware announcement will send handset prices plummeting and produce 2011 smartphone growth that eclipses anything seen before.
The argument traveled unusually fast and wide: Fred Wilson picked it up on A VC under 'The Smartphone Explosion,' Scobleizer weighed in on the Android-vs-iOS framing, and asymco supplied the mechanism — an '$85 smartphone' presaging the extinction of non-smartphones. The core claim remains an unconfirmed analyst prediction rather than settled fact, but the price-collapse thesis makes it testable within the year.
First-order effects
- Handset makers shipping Android devices at collapsing price points gain access to the entry-level and prepaid tiers where feature phones dominated, while carriers get upgrade volume without richer per-unit subsidies.
- Apple faces Android volume competition concentrated below its price floor — a segment where iOS, by design, does not play.
Second-order effects
- Feature-phone incumbents see their entry-level business undercut directly, since asymco's $85-class smartphones reach exactly the buyers who previously bought non-smartphones.
- Developers and content providers follow the install base, pressing against iOS-first distribution strategies as Android unit share compounds.
Third-order effects
- If the handset price floor keeps falling through 2011, smartphone-versus-feature-phone stops functioning as a market segmentation and becomes a default, moving competitive gravity fully to the operating-system platforms and their app ecosystems.
The trend: Falling handset costs and improving networks are turning smartphone adoption from a premium-segment purchase into the default, making OS platform scale the central battleground.