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The Apple Must Win for the iPhone to Survive Myth

I can’t help but laugh at the constant carping by the nasty negativists that the rapid growth of the Android smartphone population is somehow going to hurt the future of the iPhone. The perception is that this is merely a repetition of the Mac versus Windows platform wars, where there can be only one.

As history has shown, however, Apple can live long and prosper with a small market share, so long as sales continue to grow and financials continue to beat Wall Street estimates. Unfortunately, far too many alleged industry analysts can’t perceive that basic truth, which explains why the ascendancy of Google’s Android OS has been represented as a potential death knell for Apple.

It doesn’t even matter if Android grows faster, as appears to have happened in the first half of this year, likely due to the fact that, in the U.S. at any rate, Android is available from all the major carriers. Apple is still, of course, tethered to AT&T, and it may be months or even a year or more before that situation changes.

Except for the years where Apple lost its way, the company was almost always profitable even when Macs, monitors and LaserWriters constituted the largest portion of the product lineup. Sure, market share was but a fraction of the total PC market. However, loyal Mac users didn’t buy Apple’s gear based on market share, but on preference. The Mac was (and is) the best tool for the job.

Now the iPhone and other mobile products have totally turned Apple around, to the point where they’ve moved over 100 million units in just over three years. There are far more iPhones and iPod touches than Macs. The iPad’s initial sales were extremely close to that of the Mac during the product’s first quarter on sale, even while the new gadget remained seriously backordered and not even available in many parts of the world.

But far too many pundits want you to believe that Apple must beat Google to survive as a viable company, despite the fact that Android OS market share is still below the iPhone, even though there are many more models and, at least in the U.S., more sources from which to acquire one.

Winners must be declared, however, and the fact that Google’s smartphone market share is increasing faster than that of the iPhone is cause for some to feel Apple must be in trouble, and that they are doomed to also-ran status. This despite the fact that the BlackBerry is still ahead of both, and it’s not as if RIM is standing still when it comes to revising their products.

It’s also not certain just how well Microsoft’s next mobile OS will fare. True, Microsoft has had serious trouble moving beyond the core operating system, server software and productivity suite market. Yes, the Xbox appears to be doing well, after loads of money was thrown at the gadget. In retrospect, though, I wonder how long it’ll take Microsoft to actually recoup all of that investment, although it doesn’t seem the company’s stockholders are complaining.

In any case, after the Microsoft Kin debacle, it’s an open question whether they can actually develop a credible operating system contender in the mobile space, or whether it’ll be an also ran in the tradition of the Zune. In other words, Microsoft continues to believe that “innovation” means imitating someone else’s product two years later.

Now despite ongoing concerns about security, Google appears to be doing well with Android. Many of the most interesting non-Apple smartphones use that OS, and lots of people seem to have embraced the various iterations of the Droid and similar products with loads of names I don’t choose to recall.

In addition, the OS is getting frequent updates, and hardware makers are coming out with new models every few weeks. There’s surely enough momentum to carry the platform to a larger share of the market. I suppose it’s quite possible that there will some day be more Android phones sold than iPhones, simply because there are so many more models from which to select. More to the point, they seem rather more distinctive from one another than the typical commodity Windows PC box.

This is not to say I feel Apple will fail. So long as people around the world wait for hours outside a store to buy the latest and greatest iPhone, and Apple can continue to report annual sales increases in the 50% to 100% range, you cannot possibly call the product a failure or a potential failure.

Yes, I suppose Apple’s competitors were cheering loudly when that Antennagate furor erupted, but it turns out that it wasn’t such a big deal, and there may, in the end, be little or no lasting damage to Apple other than the relatively tiny (for them) sum of money spent on giving away free cases.

In the end, though, I think Apple’s mobile platform will actually expand a lot faster than the critics expect. But it doesn’t mean Apple has to be number one. There’s plenty of room in that market for several players to score big.