The problem with most newspaper technology writers and even many technology “analysts” is they briefly read the AP Headlines before scribbling out some output to earn a paycheck … the reality is why many newspapers are failing both financially and their readers – they don’t bother doing any investigative work or any kind – they’ll just pick up a phone to get a quote from an “expert” and call it a day.

But here are TEN Reasons Why the Droid won’t make much of a dent in the iPhone marketplace.

10) ZERO DOLLARS For Google

Right now and through 2010, Google makes exactly ZERO DOLLARS from “Android.” Thar’s right, with EVERY sale of an Android powered smartphone, Google makes exactly ZERO DOLLARS. Sure, at some point in the future, they will start to make some money from ad revenue from web surfing on the phones and eventually also the Android web store but now that they are also developing hardware, the bottom line red ink of Android is only going to grow. Of course, with Google’s current cash flow and the expenditures of Android, it’s not going to be a problem but the key is while Apple makes $600 (with subsidies and NOT including iTunes) on EVERY PHONE sold (@60 million iPhones and counting) – you can do the math, Google makes ZERO. That is why Android can gain all the market share it wants – Apple could care less. Google makes ZERO DOLLARS essentially and later on, the Android ecosystem is going to generate more revenue but it’s certainly not going to generate $600 for Google with each one sold. Bottom line – Google offers a FREE MOBILE OPERATING SYSTEM – nice for cell manufacturers but  ZERO revenue for Google.

09) Android is NOT a unified operating system.

EVERY PHONE running the Android operating is DIFFERENT. And not only that, with every telco, they will either offer or not offer access to Google’s “official” storefront. Every telco & every manufacturer will create a DIFFERENT Android phone. It is like the “free” desktop OS, Linux. It’s technically all Linux if you want to lump it under one umbrella but like Linux, the HTC Android is NOT the Samsung Android and NOT the Verizon Android. So lumping Android under one umbrella as one unified user base is incorrect.

08) No Unified iTunes.

Along with not being an actual unified OS and user base, there’s no unified storefront – no iTunes. DIFFERENT telcos and different manufacturers will each offer different and varying degrees of access to a storefront including Google’s – what this means is there’s no one central point for buying, previewing, and syncing. It is a DIFFERENT selling point but not a better selling point than One World, One iTunes.

07) The Audience.

Most newspaper writers and analysts blindly presume the audience is all the same – and that it’s a zero sum solution in that a person who chooses an Android phone is exactly the same as one who chooses an iPhone. They are not. The buyers of Android phones are doing for three purposes now. A) They loath Apple and believe since the iPhone is popular, only they are smart enough to see above the “fray/hype.” B) They are buying into the belief it’s really an open-source phone and C) The Problem with this audience.

A) Just as with the iPod, there are always a % of people who believe they are smarter than the rest of “us.” If something is “popular,” “well reviewed” or labeled the best, they want no part of it – whether it’s a movie, a restaurant or technology. They are contrarians. As with the iPod, you can always find some other player with one feature that was not on the ipod as with the iPhone. They will ignore all of the well-liked aspects and useability of an Apple product to focus on some small missing feature and claim we are all morons but this is nothing new – that’s just part of human nature. There will always be 20% who think the Earth is flat – no point in wasting time to chase them.

B) In some ways, some of the B group are also the A group – but more technology minded – they believe the Android phones are like Linux, an open source “project.” Well, technically yes as anyone can jump in to program the Android phone if you have the interest and skills but no, Verizon will not randomly add or delete features without hacking into the phone and presumably voiding your warranty and service agreement so of course, Google wants to sell it as an “open source” project but the reality is that it’s not really. Plus, this group is not really that large – yes, they are vocal and certainly internet savvy but you just have to look at the actual Linux market. How much revenue is actually derived from Linux SOFTWARE sales? (not Linux servers as you are obviously getting hardware as part of your purchase).

And C) the Implications of this audience – bottom line, they are WAY LESS INCLINED to buy anything. They simply believe (correctly or not) that they can create what they want or hack it in there. So, whether it’s the APP STORE – I’ll just write my own and only find a free version or MUSIC – I’ll just rip my own or worse, just download it for free – same with movies and TV shows. So, the Android audience is NOT the iPhone audience. They have arrived at their buying decision from two separate mind’s and pocketbooks.

This is why there is great growth in the number of APPS in the Android APP STORE but sales are weak.

06) The Marketing.

Part of the beauty and brilliance of Apple is that there is ONE marketing message for ONE product. That is why there are no AT&T ads that directly say the iPhone – Apple does not want AT&T to muddle their marketing message. AT&T can talk about their network and so forth but actually say the iPhone – no. That is already COMPLETELY DIFFERENT with the Android phones. There are about 10-15 manufacturers and 3-4 telcos (plus prepaid coming in 2010?) who sell the Android just in the US – that is about 50 mixed messages right there by the end of 2010. By the time this is over with the next holiday season, that’s 50 times X campaigns over the year each with their own message how they are the best “Android” phone. The result? Consumer confusion. Wait, this HTC Android phone is better than the Moto Android phone? Is Android the phone that falls from the sky? Is it this one? Or why does my Android phone not have that feature?

05) Marketing Cluelessness.

Many detractors of Apple claim it’s all about “hype.” But the reality is Apple is maybe the LEAST HYPE ever. What are the iPhone ads? A guy’s hand tapping on buttons – showing off plainly WITHOUT MUCH HYPE what this product does. You see exactly what you get – there’s is nothing hidden of even distracting. The only other iPhone ads featured people on the street on a black background saying why they like the iPhone. Contrast that with the bizarre Transformer ads of the “Droid.” Of course, it is honest in the sense that the paid actors in the spot had no idea what the ad was for but great for the ad agency. They got to bill Verizon or Google for $8 million for :30 seconds of a stealth fighter dropping bombs – honestly, who really thinks that’s how their cell phone was delivered? I can picture the account executive selling the $100-million campaign as the DROID as the bomb and the bombshell but the reality is NO ONE believes that to be true. The people who are contrarians or tech geeks will buy one regardless but for the mass market – it was 100% WTH or worse, WTF? Apple must’ve had a good laugh also with the Palm ones with the creepy woman who implied your phone will change all red traffic lights to green? Who believed that one? Again, Apple is 100 times smarter. They show off the phone with a HUMAN HAND tapping on the screen so you see how it works – no promises that the technology is so far in the future a robotic hand is required to use it. Or really, anyone rely on Whoopi Goldberg, a basketball coach and some guy with a bunch of tattoos to know which phone is best? At this point, after the iPhone, people get that touching the screen will activate functions on the phone – you need to move beyond trying to win advertising awards NOT for art direction and special effects and try to win awards for EFFECTIVENESS … you’ll notice that after spending nearly $200 MILLION dollars and months later, Verizon, Google, and Palm have not yet even announced 1 million in unit sales of their flagship phone? How long did it take Apple to sell a million phones? 3 days?

04)  The Bargain Basement.

Related to the last three is that the end result – with so many mixed marketing messages, clueless marketing and off-target hype, with so many players trying to sell and shill their name, their service and their version of the Android phone – it will become everything the iPhone is not – a mixed hodge-podge of marketing messages that cancel each other out and people will shop for Android phones like any other phone – by price. It is already starting now with Verizon offering 1 Android phone free with purchase of another.

And of course, what’s the inherent audience connection with Google – that it’s FREE. So, while no one is expecting a “free” cell phone – there’s much work to get done to dis-associate Google with “free.” So while linking with the Google name is good in one aspect, it’s not so good with another.

03) Google Not a World Class Designer.

The Google phone (coming in 2010) will matter very little. First, while Google is a powerhouse in search and search ad sales, they know nothing about user interface and design functionality.

All you have to do is look at the the “MORE” dropdown menu of Google’s front page – it is a hodge podge of icons shapes & dimension (some 3D, others from WIN 3.1). Are there any two Google apps with even a remote usability resemblance? Anything think Google Mail & Picasa is from the same company or while Google Earth is great fun – anyone really think every function is well thought and designed – what if you had to pay $99 or $249 to access it?

Google is a great company. I am not knocking them and I am glad they have been around to knock down the others and keep them competitive. I pretty much use Google search exclusively and Gmail is my internet mail app of preference but the bottom line is we like Google because it’s free and it’s fast – which is ALL GREAT but to take the leap to say they can design the best phone UI? That’s a big leap and so far, their examples on the Android are what you expect. Nice on many aspects but compared to a world class UI design company? Not in the same league. They have the advantage is that search will fund this foray where they give away the programming tools and even offer to help design but at the end of the day, they can certainly out do Nokia, MS, Palm & RIM but for now, they are not in the league of the #1.

02) The Halo Effect of Apple is Too Strong.

Consumers are not morons. On the right side is Apple who have now proven to the last generation with the iPod, iTunes, the iPhone and the MacBooks that they are a trusted name who will deliver what consumers want – design, functionality, performance, style and convenience. Apple is also smart to deliver that first BANG YEARS AGO in the smartphone market so when the Google phone comes out in 2010, not only will they have to earn the trust that Google can deliver a consumer product and phone OS but how old will the news be? What’s the point of being two years late to the dance? Touchscreen is old news – what else have you got? When Google comes out with their touchscreen phone, won’t people be thinking about the iPhone 3.0? And most likely the BANG of the giant screen iPhone-tablet version? Won’t it be old news? Sure, it will have some tiny feature that the iPhone might not have but will be more like the Zune, simply a contarian purchase? Again, it’s not that the Google name is worth nothing, it’s just that it’s not worth APPLE value until it’s proven … it’s one thing to go out on a limb to buy an alarm clock but a cell phone? If it’s $49? whatev but if you’re chasing the FULL VALUE-HIGH MARGIN train that Apple drives – that’s another story.

(It’s also worth considering that every pre-teen (presumably) iTouch user is then pre-ready for the iPhone – one click is all it takes to copy over every app, song, movie, TV, show from the iTouch to the iPhone).

01) All Too Much.

Analysts have to keep in mind what Android is. Android is a FREE programming mobile OS that will help Google attach itself to a generation of cell phone users who are transitioning to the mobile internet. As of now, Google makes ZERO DOLLARS from it and the payoff is years away. It’s a smart play, of course since they can afford it but the Android market is not the iPhone market. The iPhone is a FULL REVENUE model for Apple – not to mention a unified marketplace and structure with iTunes. The people who choose the iPhone knows that they are getting the best reviewed smartphone AND it’s from Apple AND they can use it with iTunes. The most likely scenario is that Android’s buyers will be choosing it mostly on price and this not as high of a revenue generator as iPhone’s buyers who know exactly what they are getting + iTunes. Part of that is the inherent “open-source” buyers and contrarians who comprise of its audience but also when there are hundreds-thousands of mixed marketing messages, it will all get lost, diluted and at the end of the day – people who are bargain hunters of smartphones will settle for Androids, the flagship smartphone of telcos not selling iPhones. Google also has to move the needle from being only associated with, “free,” while Apple has proven in this tough economic time, consumers are willing to pay for inherent value.

And merely measuring market share as a comparison would be like measuring apples to oranges – literally.

Each iPhone sale is $600+ dollars to Apple. Each Android sale is a X dollars to Google – where X is a few in 2010? Android is a bigger strike against Nokia, MS, Palm & RIM.

Unlike Apple, they are in the same boat of small margins since they have to fund their own OS AND sell phones at a discount.

Nokia has managed 10 years of total incompetent smartphone OSes so it seems hard to believe they will wake up and see reality. By the time they copy the iPhone OS, it will be 2015. MS is done since WinMobile is no better than Android and it costs money to program their OS and WinMobile has about as much love with consumers as every other MS OS and the Zune. Palm might be a nice OS but it’s 10 years squandered and they have no cash left to raise their voice – Nokia would be smart to buy them but Nokia is too arrogant. RIM will continue to win enterprise markets but will continue to see margins erode as the non-iPhone smartphone market will drop to $98 for two phones. They have a bigger problem in that they have to keep adding servers and expenditures to maintain a network – and when it goes down like it has the past two weeks, they get a double whammy – they lose users and have to spend more on infrastructure.

So, as with the iPod, there will be ONE smartphone, the iPhone that grabs the bulk of that cream of the crop marketshare – the FULL PRICE-HIGH MARGIN marketshare as it is the branded one and the trusted one. Meanwhile, Google, Samsung, LG, HTC, Nokia, Palm, Sony-Ericson & RIM will fight between them on a month by month basis for the remainder of the FULL PRICE-HIGH MARGIN smartphone marketshare – climbing a few notches when they introduce the latest competitor the iPhone but falling when another intros a new phone – all the while, the iPhone will maintain its 65-75% marketshare of the best market.

If you measure every smartphone worldwide, sure Apple’s marketshare won’t seem that large but just as today, would you rather have Apple’s iPhone revenue of $600+ per phone sold or Nokia’s of selling more but making only a tiny fraction % of $600?