You know that old saying about missing the forest for the trees? I think both Android optimists and pessimists might be doing just that by obsessing over early sales figures for Motorola's (NYSE:MOT) DROID smartphone.
The first two analyst estimates for sales of the DROID, released last Friday by Verizon (NYSE:VZ) and easily the most hyped device thus far to sport Google's (NASDAQ:GOOG) Android operating system, paint two very different pictures. The first one, from Broadpoint Amtech analyst Mark McKechnie, estimated that a mere 100,000 DROID phones were sold over the weekend. The second, from independent analyst Michael Cote, placed estimated sales at 400,000 -- a figure presumably measured as of Cote's published comments yesterday. Cote suggests that the difference in numbers is due to McKechnie's number being based only on sales from Verizon stores, while his also include online channels and resellers such as Best Buy.
But while Cote's figure, if accurate, is welcome news for Motorola, whose money-losing phone division needs all the help it can get, it doesn't do much to change the big picture for Android and its attempts to unseat the iPhone as the platform du jour of the smartphone world. After all, Apple (NASDAQ:AAPL) managed to sell 1 million units of the iPhone 3GS during its first weekend, and this was done without the kind of overwhelming media blitz that Verizon unfurled for the DROID, which it badly hopes can dull AT&T's (NYSE:T) iPhone thunder.
Look beyond Verizon's hype, and you can see why it's unrealistic to expect the DROID to challenge the iPhone's supremacy on its own. The DROID just doesn't have the kind of "Wow!" factor that the original iPhone delivered in 2007. That device, with its multi-touch interface, innovative web browser, tilt sensor, "visual voice mail," and iTunes integration, was unlike any phone that had been made before. The DROID can't claim the same kind of "Wow!" factor, and that's probably why Verizon is emphasizing features that the iPhone doesn't have but that, in many cases, are available on other phones on the market.
Sure, it's great that the DROID, unlike the iPhone, has a physical keyboard, five-megapixel camera, memory card slot, and replaceable battery, but it's hard to see consumers fleeing the iPhone in droves when smartphones from Research In Motion (NASDAQ:RIMM), Nokia (NYSE:NOK), and HTC, among others, have long had similar features. Most iPhone buyers are well aware of their device's hardware shortcomings relative to competing products, but it doesn't seem to faze them much. And though the DROID does have some interesting software features, they'll only take it so far.
If Android is going to challenge the iPhone's supremacy long-term, it won't happen because of one great phone. It'll happen because of the groundswell of support that Android has generated among smartphone also-rans -- a group that features not only Motorola, but also Sony Ericsson, Samsung, LG, and HTC. And it'll happen because the spread of dozens of Android devices made by these companies will lead to a virtuous cycle of media hype, positive word-of-mouth, and third-party software development similar to what Apple has seen with the iPhone.
I still think Google and its hardware partners have an uphill battle ahead of them, given Apple's current lead in both consumer loyalty/enthusiasm and available apps. But it's still early in the game, and Android might have time to catch up. Just don't try to decide upon a winner based on next week's DROID sales.
