How to compete with Android

Over the last quarter, Android has had an average of 200K activations per day - this is an amazing pace, even higher than what Apple set with the iPhone 4. While there is nothing to be worried yet, Apple should be taking this seriously. They obviously do not want a repeat of what happened in the PC world in the 1980s and 90s to happen once again in Mobile.

Apple is already doing the things that it does best - constant innovation to keep raising the bar higher. However, there are some other things that Apple could do specifically to take on Android.

- Apple should change its release cycle, and release phones at least 3 times a year. The current annual release model is not good enough when you have a new Android Phone coming out literally every month. Releasing models every 3-4 months would ensure that Apple does not fall seriously behind in the spec game.

- Loosen restrictions on the AppStore. Quite a lot of restrictions that Apple imposes on the AppStore, are actually carrier restrictions, and not Apple restrictions. Carriers are the ones who are hurt by tethering options. Carriers are the ones who dont want VoIP calling over 3G. Now that Android is selling more than Apple, Apple can easily argue that if Android has these features, there is no reason iPhone also should not offer the same feature. The moment some of these restrictions are removed, iPhone can have pretty much any application Android can have. Apple should still have a curated store, but with lesser restrictions. Just this one thing would take away most of the attraction that Android has in the developer community.

- Open up iPhone to all carriers. We are already hearing noises that this is imminent. Just dont stop with one carrier, make sure iPhone is available with all carriers. The main thing, is that Apple should not allow a free ride to Android on Verizon and Sprint. Android is having a much tougher fight globally, where iPhones are available on multiple carriers. In the US, where AT&T is the sole carrier, Android is doing very well. To counter this, iPhones should be available on all networks.

- Apple should offer couple of models more - at the lower end of the market. These models should be available at extremely low cost, to cannibalize Android sales. The best part is that Apple has always seen better sales of its higher end models - so people invariably buy the higher end Apple models when they have a choice. Offering a real cheap phone for free with a contract would mostly serve to put pricing pressure on Android.

- Today, while Apple is still one of the largest sellers of smartphones, all Android phones put together outsell the iPhone. So Apple is way bigger than Motorola, Samsung, etc. In this sort of situation, a drop in margins will actually hurt Motorola, Samsung and others, a lot more than it will hurt Apple. Because of Apple's volumes, Apple can actually make decent money even at lower prices - whereas these other vendors will see a lot more margin erosion. This strategy will hurt the HTCs, and Motorola's of the world big time.

- Dont restrict the fight to Android, take the fight to the rest of Google as well - the moment Google realizes that Apple is stealing some of its ad revenues, and not making any money on Android, they will be in a lot of pain. In parallel, extend iAd to the Android platform - so that Apple can try to make some money off the success of Android as well - because the Android Marketplace is not a curated store, it will be very difficult for Google to stop Apple from monetizing Android. On the other hand, Apple runs a curated store, so they can easily stop Google.

- Push initiatives like Safari Reader, AdBlock for Safari, etc. These are initiatives that lower the value of ads on the internet - attacking Google where it hurts most. Implement the same functionality on the iPhone as well - to make any website optimized for the iPhone screen.

With these initiatives, Apple can compete much more effectively with Android, and avoid the Mac OS vs Windows scenario.