Who will win this battle? This to me is very similar to what happened in the PC market almost 20+ years ago. If you recall, the IBM based x86 processor was emerging and at he same time Apple introduced the Macintosh Apple computers.
If my memory serves me right, the buzz around Apple was equally energetic as the Iphone today. I remember the Macintosh being THE computer to have. In school all we did was Apples and everyone wanted the Macintosh. Albeit at the time the prices were MUCH MUCH higher, but the exclusivity built by Apple along with its proprietary closed end concept was very similar.
Iphone came out with much fanfare about 2 years ago. AT&T was the exclusive dealer and you had to play in Apple's domain for applications and music. Closed end, extremely protective. Since the Iphone was a leapfrog in PDA/Phone technology, the frenzy of consumer attention was understandable. Apple made sick amount of money. There seemed to be no competition for the Iphone. Millions of consumers switched as you saw droves of the public mesmerized by the finger swabbing motions on the PDA screen of a white minimalist unit.
But this is where Apple has repeated its biggest mistake I believe. By closing the system and hoarding its consumers to its platform, Apple has traded the short term gains and fame for long term legacy building / game changing platform.
Just like the Macintosh, the Iphone is closed system proprietary based product while the Google Android is open system shared platform. In fact Google has studied the history well and improved on building a fantastic coalition of hardware and software developers who are rapidly building a game changing massive system around the Android product.
Is Android going to be the Windows of the PDA Market? Well everything tells me YES! Trace back the history of the PC, DOS and Windows market and you will see that Google has borrowed the play-book and then improved on it.
Dozens of platforms and hardware are destined to be introduced in 2010. Nexxus One is just one with fanfare. HTC (who also makes the Nexxus), Motorolla, LG, Samsung, General Mobile all are poised to introduce numerous phones with Android 2.0 and 2.1, and onwards....
Applications....well the Iphone may have thousands, but they are still restricted to the Apple market-space and controlled in a closed ended system. Android is rapidly catching up and probably has exceeded the Apple's space. I believe Android based applications will become the dominant providers of mobile applications by end of 2010.
So what will happen to Iphone? I assume similar to what happened with the Apple PC market. It will become a niche player losing market share rapidly to the dominant Android. By the end of 2010, I predict that the Android software market will be at least 2 to 3 times bigger than the Iphone. Apple is going to have to either innovate and leapfrog again OR go against their grain and open up the Iphone and becomes a true competitor. Otherwise in the not to do distant future, Iphone will only be left with a cult following like the Apple Macintosh.
What will Apple do? For now bye bye iphone.....