One phone can't rule them all
No matter what kind of smartphone you want, there's an Android for you. Want a high-end multimedia phone, complete with HDMI connection? There's the Droid X. How about a high-end phone with a physical keyboard? You've got the Droid 2, among others. Those are just two among many high-end Android smartphones.
If you want lower pricing, there are plenty as well, such as the LG Ally, Motorola Devour, and plenty others. No matter the feature set, design or your price point, you've got a choice.
Want an iPhone? You've got one choice, at one price point --- the iPhone.
It's this simple: One mass-market smartphone can't compete against a deluge of smartphones at many price points, especially if the many phones are powered by an operating system as powerful and flexible as Android.
In smartphones open beats closed
As innovative as Apple is, its closed system can't win against an open system, especially in a market changing as rapidly as the smartphone market. Android's openness will foster more innovation. And in the smarphone market, innovation wins.
An excellent article in the New York Times, "Will Apple's Culture Hurt the iPhone", puts it this way:
...the rise of Android has been both sudden and unexpected, and its ascent highlights some of the advantages of an open approach.Mitch Kapor, who wrote the groundbreaking Lotus 1-2-3 spreadsheet and founded Lotus Development Corporation puts it this way in the article:
"There is much more rapid innovation taking place in an open environment," said David B. Yoffie, a professor at the Harvard Business School who has written recent case studies on Apple.
"Having a tightly controlled ecosystem, which is what Apple has, is a large short-term advantage and a large long-term disadvantage. The question is, how long is the short term?
I think the answer to that one is fairly simple: The short term ends right around now. App development is catching up on Android, and many Android phones are now every good as the iPhone, and depending on what you're looking for, are in some cases better.
Faster turnaround wins
Smartphone buyers tend to be a fickle bunch. They want something new, and they want it now. They're driven by what's new, flashy, and fashionable far more than buyers of computers. Here Apple is at a disadvantage, because its release cycle can't keep up with the many release cycles of competitors. New Android phones come out constantly. New versions of the iPhone don't, because one company simply can't rev a product that quickly.
The Times article notes:
While Apple comes out with a new iPhone model once a year, slick Android phones with new features hit the market often.Apple has no room for error
Because the market changes so quickly, Apple faces so many competitors, and it's on a long rev cycle versus the competition's, Apple can't get any version of the iPhone wrong. If it does, that could mean an entire year lost. If an Android manufacturer gets a phone wrong, it doesn't matter much --- plenty of other manufacturers are releasing phones as well. So no time is lost. In the smartphone busines, a year is an eternity. Even a company as innovative as Apple makes mistakes sometimes, and when that happens, Android could surge past it.
One word: Google
Google, the maker of Android, is every bit as innovative as Apple. Like Apple, it attracts the world's best engineers. So Apple won't be able to out-innovate Google, as it has been able to do to other competitors.
And Google has something that Apple doesn't --- its dominance on the Internet. By forging links between Google services and Android, it can make Android more attractive than the iPhone.
All this doesn't mean that Apple won't continue to be a success. Even being number two in the smartphone market means big profits. As Harvard's Yoffie told the Times:
"Apple will lose its overall leadership, but maintain a share of the market that could easily be in the 25 percent to 30 percent range. That's enough to sustain a very large and very profitable business."