Now that Android has somewhat matured and HP is dumping massive resources into WebOS, it may be time for Apple to think about winning hearts and minds again, doing things like allowing iPhone users to install the apps they want to install, including those which carriers and other partners may not be particularly fond of, as Android and WebOS users are able to do.

Of course the yearly iPhone release cycle is a big factor, and it can be expected that the product will do relatively poorly at the end of its cycle, but that's also what makes the iPhone so incredibly profitable for Apple. A possible solution to this may be for Apple to have two radically different iPhone models serving different markets, and have the release cycles staggered by six months. Another alternative would be to release a new model every eight months instead of twelve, take a hit in profitability, and still be able to line up with people's two-year plan refreshes, now every three phone models instead of two. Overall, this problem is somewhat mitigated by the attraction of iPhone OS app availability and the iPhone's brand strength, so it may not be the most important issue to address.

The other obvious factor is the exclusive carrier agreement with AT&T in the US, with Verizon pouring marketing money into Android to counter Apple's iPhone. Apple is leaving the door wide open for competitors to establish themselves with people who prefer other carriers for various reasons, giving a great boost to Android device vendors. Ending this exclusive distribution agreement as soon as possible seems like the most obvious answer to this competitive pressure.

Personally, I recommend people get Android phones because I'm fearful of the power Apple wields over its users (namely me, making me jailbreak my iPhone to run valuable applications that Apple won't allow for whatever reason), and I need credible competition to keep that power in check. I think many technophiles are rooting for and promoting competitors, even if they use iPhones themselves, simply due to Apple's repression of user empowerment with iPhone OS devices. I honestly believe that loosening the reins on their iPhone OS users would afford Apple a whole lot more goodwill with geeks, and remove many of the reservations they have recommending iPhones to people. Making the iPhone more geek-friendly should obviously not be done at the expense of usability for the less geeky, but the value of courting this class of users is to be ignored at Apple's peril, as they are the ones many people trust to guide their purchasing decisions.

So that seems about the extent of what Apple can do to turn their fortunes around. It will be interesting to see how this marketshare trend holds in the next year in relation to the iPhone release cycle, ruling out the effect of the end of the current iPhone model's life, compounded by the Gizmodo iPhone 4G leak. There are other obvious areas of improvement in the iPhone OS I'm sure they're working on, such as a workable documents and basic filesystem functionality, but the PR problem surrounding the issue of vendor control over users seems like the critical one for the iPhone at this point. That said, I don't want to take away from this momentous day for Android users, developers and stakeholders.

This is a huge milestone for the Android platform, and a watershed moment for mobile app developers. You can bet this is music to the ears of Android devs looking for investment, and that Android will be getting a lot better software for it. It's good to see Apple get a taste of humble pie; they've always done their best work as underdogs, when the pressure is on. Personally, if Apple stays their current course another year, I would expect this trend to be irreversible.

Disclosure: I own some AAPL and PALM shares. Sorry for the essay!