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Why Android Can't Beat the iPhone


"A" for effort, but Apple already has what consumers want.

Google's (GOOG) Android mobile-phone operating-system software is the talk of the town this week. Verizon (VZ) is hoping Android will help it leapfrog, or at least gain some ground on Apple's (AAPL) iPhone juggernaut, announcing a partnership with Google yesterday to develop new phones and applications.

The iPhone remains hot in the US, and it gives every one of Verizon Wireless's 87 million customers a reason to switch to AT&T (T). To keep those customers, and to draw some of the lost ones back, Verizon needs something equally hot, and Android just isn't it.

The problem is simple. Android is being commoditized faster than you can say "oh, I'll just get an iPhone instead." According to media reports, as many as 30 Android-powered phones will be on the market by year-end, an absurd number that will do nothing but drive prices through the floor and customer confusion through the roof.

This isn't a quality or usability issue -- Android could read your mind and make cotton candy, but it doesn't really matter. Sticking dozens of new phones in people's faces isn't going to excite them -- it's going to give them headaches. A high number of models saps the notion of any individual product becoming differentiated, and thus desired, to consumers. People will barely be able to tell them apart.

And if there's one thing we've learned from Apple, it's that people like the buying process to be simple. Give people a million options that all kind of look the same, and they'll walk away because none of them will be special. On the other hand, buying an iPhone is easy -- do you want the 3G or the 3GS? That's the only question you need to answer.

The iPhone looks cool and it's easy to use, and that's all that really matters to 95% of the population.

However, there's a silver lining for Google in this mess -- it will help kill Microsoft's (MSFT) prospects in mobile phone software because the average person will choose a Google-powered phone over a Microsoft one any day of the week. Verizon knows that, which is why it will probably fill its stores to the brim with Android phones.

There's some sentiment out there that Research In Motion's (RIMM) BlackBerry devices will be hurt by the Android push. Don't count on it. BlackBerry remains a highly-differentiated, go-to brand, and it still has plenty of room to grow in consumer markets.
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