Bert Danner piece for Seeking Alpha, came across as a well thought-out analysis of the mobile platform war between Google’s Android and Apple’s iOS. According to Danner, when the smoke clears, Apple will be crowned the winner.
Danner’s theory is based on what he calls the ‘Network Effect,’ where developers and consumers work in tandem to create a powerful platform (in this case iOS).
“The network effect is a virtuous cycle (“a complex chain of events that reinforces itself through a feedback loop”) of value creation as more users participate, Danner writes. “On a software platform, this occurs when developers and service providers create software and services to run on the platform. The added software and services increase the value of the platform and attract new users. New users buy more software and services and thus a virtuous cycle of ever-increasing platform value is created – the network effect.”
“Simply put, developers and service providers must prosper financially to add value to the platform. As platform users buy software and services, developers and service providers are incentivised to create more offerings. The engine of this process is the platform users actively purchasing the offerings being provided,” Danner posits.
On the other hand, Danner believes the opposite is happening with Google’s Android platform.
According to Danner:
As you can see, Danner argument is very convincing. However, a comment from Google’s Chairman Eric Schmidt comes to mind.
Here is what Eric Schmidt said at LeWeb 2011:
In my opinion, Schmidt has a valid point. Developers cannot afford to ignore this huge volume of users forever. At some point they will have to invest in Android. The investment might not be on the same level as iOS and the user experience of the product may be inferior to that of its iOS counterpart, but it will be there.