Sorkin tries hard to make his case in a post at the NYT’s DealBook blog, arguing that the Facebook CFO was the chief architect of the social network’s gigantic public offering — which was supposed to value the company at upwards of $100 billion — and that since he was brought in specifically for his experience with the public markets, he deserves the blame for the failure of the issue. Even more than that, Sorkin argues that Ebersman effectively needs to shoulder the responsibility for the continued slide the shares have been on ever since, a drop that has cut about 50 percent from the company’s market value.

A train-wreck IPO requires multiple players

The NYT columnist says that Ebersman mis-priced the offering, overestimated the amount of demand, flooded the market with extra shares at the worst possible time and since then has remained mum about how exactly he is going to fix things. At one point, Sorkin even seems to be suggesting that Ebersman should be fired for his behavior both during and after the company’s IPO, saying:

“If there is one single individual more responsible than any other for the staggering mispricing of Facebook’s I.P.O., it is Mr. Ebersman… it is remarkable that nobody — no bankers, no one at Nasdaq, no one at Facebook — has been fired for botching the offering.”

Sorkin is right about one thing: there is no question that Facebook’s IPO was a pretty high-profile train wreck in a lot of ways, a pale shadow of the superstar offering that everyone expected — or at least hoped for. Instead of rejuvenating the market for technology issues, it effectively slammed the window shut, at least for social-web IPOs (although lackluster offerings from companies like Zynga have also helped to close that window). But was that Ebersman’s fault alone? It’s difficult to see how.

It’s true that Ebersman, as the man in charge of the public issue, has to wear some of the blame for what transpired. But if the IPO was a train wreck — and there’s at least an argument to be made that it hasn’t been for Facebook itself, even if it has been for retail investors or the brokerage firms who underwrote it — then there are plenty of others who deserve some of the blame as well.

To take just one example, the Nasdaq stock market bungled the offering in a fairly spectacular fashion, as many observers have noted: it handed over one of the most high-profile issues in recent memory to a new trading system that almost completely failed to match buy and sell orders properly, creating the stock-market equivalent of a 100-car pileup that took hours (possibly even days) to clear. For any stock issuer, the signals that come from the market are a crucial indicator of demand, and the Nasdaq’s failure meant that those signals were almost completely unreadable.

Was the IPO really a failure? Not for Facebook

But more than that, the biggest culprit when it comes to the IPO’s lackluster debut — and the continued slide the shares have been under since — is the overheated hopes and dreams of the market itself leading up to the issue, compounded by the greed of the company’s financial backers, venture investors and brokerage advisors. Should Ebersman have known that demand was being overstated? Perhaps. But when the world’s largest underwriters and market experts are telling you to increase the float, do you tell them they are wrong, or do you take the advice that you are paying them hundreds of millions of dollars for?

David Ebersman may have miscalculated, but he is hardly the first CFO of a newly public company to do so, and the reality is that he was given plenty of assistance in that department. And as for not articulating how he plans to get the stock price back to where it should be — something Sorkin also castigates him for — how exactly is he supposed to do that if the price was over-inflated to begin with?

Regardless of whether Facebook managed to meet the sky-high expectations of insiders or those who bought shares in advance of the IPO, or even of retail investors who got caught up in the hype, there is an argument to be made that the company has made out pretty well from the issue, as billionaire entrepreneur Mark Cuban notes in a blog post. Facebook got $10 billion to fund the company’s growth — and it was abundantly clear from the company’s prospectus that CEO and controlling shareholder Mark Zuckerberg (for better or worse) has no intention of listening to the moaning of short-term investors.

The reality is that everyone over-estimated the demand for Facebook shares, not just David Ebersman. And everyone seems to have assumed that the euphoria about the company’s rosy future would carry the stock to unimaginable heights following the issue. The fact that much of this was based on wishful thinking and a wilful misreading of the company’s financial situation is hardly David Ebersman’s fault.

Post and thumbnail images courtesy of Flickr user Hans Gerwitz and Shutterstock

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As the fateful day of Facebook’s initial public offering draws closer, the giant social network’s financial results are attracting more and more attention. And while there are some blockbuster numbers in its recently updated securities filing — including a mind-boggling 900 million active users, half a billion of whom use the site daily — there are also some potential red flags, including rapidly rising costs for marketing and other expenses. All of this raises the question that investors will need to answer before too long: Is Facebook unlike anything we have seen before, or is it just another modestly profitable Web business?

There’s no question that Facebook is huge — possibly the largest digital-only social enterprise that has ever existed — and it is still growing at a fairly rapid rate. Just a few months ago it crossed the 800-million-user mark, and now it has passed 900 million, which suggests it will probably rack up a billion active users sometime later this year. And more than half of that user base visits the site at least once a day, a level of engagement other Web services would likely kill for.

A revenue drop and a net income decline

That’s the good news, that and the fact that Facebook’s revenue for the first quarter of 2012 hit $1 billion, up more than 44 percent from the same period a year earlier. And the bad news? Well, for one thing, revenue actually fell compared to the previous quarter, something that doesn’t look particularly good coming from what is supposed to be a growth company. And net income (in other words, profit) also dropped by 12 percent compared to the same quarter of 2011. In fact, Facebook’s profit was lower in the most recent quarter than it was in the previous five quarters:

While the quarterly dip in revenue could be just a seasonal blip in an otherwise-growing advertising business (although Facebook’s payment-related revenue also flattened), the fall in net income is a bit more worrisome. Running a Web business without making a profit may be taken for granted when it comes to startups like Instagram, which Facebook just acquired for $1 billion. But when you get to be the size Facebook is — and you ask the public markets to value you at close to $100 billion — investors and analysts are going to want to see some money flowing to the bottom line, and lots of it.

According to Facebook’s filing, which is embedded below, the main reason for its lower profit was higher costs, particularly for marketing: Costs related to marketing and sales more than doubled to $159 million from $68 million a year earlier — almost as much as the company spent in all of 2010. In total, Facebook’s cost of revenue climbed by more than 65 percent compared to the same quarter in 2011.

How much can it squeeze out of its existing users?

It may be stretching things somewhat to compare Facebook to Groupon, another highly anticipated public offering, but one of the main criticisms of the group-buying service — and something that has helped push the stock down by close to 50 percent since its IPO — is that it has to continually spend more on marketing than it can ever hope to recoup in profit. Like the Red Queen in Through the Looking Glass, the company has to run faster and faster just to stay in the same place, because users leave and it has to spend to acquire new ones.

Facebook’s problem is somewhat different: It has close to a billion active users, but it makes a remarkably tiny amount from each one: about $5 per year. That’s not a lot, considering over half of those users visit every day. And while the amount Facebook makes from the average user rose in the most recent quarter, it only grew by 6 percent. Some of the marketing costs it is racking up are no doubt going toward increasing that number. But how much more can Facebook squeeze out of its existing user base?

As I tried to describe in a recent GigaOM Pro report on Facebook’s IPO (subscription required), the biggest question about the social network is whether it can grow in any substantial way from its already massive base. With almost a billion users currently, the upside for the company is likely relatively limited, unless you assume Facebook will eventually be used by everyone on the planet. So growth then has to come by increasing the revenue it gets from each user. But what if it has to spend increasingly large amounts of money in order to do that, either to market itself or to acquire new avenues for reaching users such as Instagram?

In a recent essay on Facebook’s prospects, investment advisor Josh Brown called it a “red giant” — a star that, having grown too large, starts to consume its own resources and eventually implodes and becomes a white dwarf. Investors who are looking for a meteoric return on the company’s initial offering should consider the fact that they may wind up with shares in something very different.

Facebook Amended S1

Post and thumbnail images courtesy of Flickr users Jinterwas and Jinterwas

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An Apple store in China

A new Morgan Stanley survey (via AppleInsider) found that Apple is the most desirable brand of computer in China right now, beating out local heavyweight Lenovo. China became the biggest buyer of personal computers as of August, according to IDC, so that’s great news for Apple.

The Morgan Stanley survey of over 1,500 respondents spread across 16 Chinese cities found that Apple was picked as the brand of choice for people’s next computer purchase 21 percent of the time. That compares with just five percent who currently own an Apple computer. Lenovo still remains the top choice for consumers’ next purchase, but it dropped from 31 to 23 percent. If laptops are considered alone, Apple exceeds Lenovo as the next purchase of choice, with 22 percent of respondents choosing Cupertino’s products over Lenovo’s 21 percent.

Aside from being high on consumer t0-buy lists, Apple also ranked as the most desirable PC brand, according to the survey. It achieved a weighted score of 66 percent, with Asus in second at a close 65 percent.

The main barrier to Apple computers for most respondents was price; only 7 percent of survey respondents said that they would be willing to spend north of $1,000 for a computer, which is where the bulk of Apple’s line lies. Luckily, the trend is changing; of those planning to buy a new computer, half plan to do so within two years and expect to spend 6 percent more than the roughly $700 average price currently paid. If Apple can lower or keep prices the same as Chinese customers grow more affluent and continue to expect to pay more, eventually cost won’t be nearly the barrier it is today.

The iPad is also walking away with the tablet market in China, just as it is elsewhere. Sixty-eight percent of respondents plan to make it their next tablet purchase, while 65 percent of tablet owners currently have one. The iPhone is also poised to do very well, with 40 percent of respondents saying it will be their next device, more than four and a half times the number of current iPhone users as polled.

Apple CEO Tim Cook said that China was now Apple’s second-largest market, and judging by these numbers, it won’t be too long before it climbs to the top spot.

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It’s understandable that analysts would predict a similar sort of trajectory for the iPad that the iPhone has experienced; after all, a tablet is just a larger smartphone, and both categories of devices run basically the same mobile operating systems, at least as far as iOS and Android are concerned.

The only proven tablet OS

But the experience on both Android and iOS tablets for end users isn’t nearly the same as the experience on phones using both platforms. If Android feels a bit immature on smartphone hardware, it feels exceedingly so on tablet devices. IOS, on the other hand, feels tailor-made for each. Nothing about it seems hasty, or an attempt to quickly gain a foothold in a market the OS was shoehorned into in the first place, the way Honeycomb did. Ice Cream Sandwich could improve the situation, but at most, it will probably be an evolutionary update, if the history of Android OS iteration is any example.

In other words, Android has yet to prove it can even deliver a mature, feature-complete tablet OS designed to take advantage of larger-screened devices. That Gold suggests in his note that QNX and Microsoft will be able to each acquire 10 percent of the tablet market by 2015 is an even greater reach, since those platforms have even more to prove in terms of market relevance. RIM can’t even get email working on its platform until 2012, and Microsoft’s software is a risky desktop/mobile hybrid that has yet to see a public release. Predicting either’s ascendancy at this point to a solid but distant third is like seeing Zune and anticipating it would eventually be a serious contender alongside the iPod.

Distribution model differences

Predicting the iPad vs Android tablets market to proceed along the same lines of the iPhone vs. Android phones market also discounts key differences in the distribution model of both devices. Tablets, despite some support from carriers for 3G data plans, stand in for computers more than phones for most consumers, and that’s the way many people shop for them, too.

Carriers, then, don’t have nearly as much say in which devices get pushed as they do with smartphones. In the past (and still today), if you wanted an iPhone, in many markets you were stuck with one or two carriers. If you wanted network choice, you had to go to a different device. Also, carriers have tended to favor Android because it offers them more customization options, allowing them greater controller over the customer relationship.

So long as the tablet isn’t inextricably tied to distribution through network operators, Apple will have an advantage, since it has the strongest marketing, sales and retail network of any device OEM.

Usage still far ahead

As we reported yesterday, Apple’s iOS market share by usage is still well ahead of Android or any other competitor, as measured by website access by platform and by browser. Those numbers combine both tablet and smartphone figures, but since Android is acknowledged to be faring much better versus iOS in smartphones than in tablets, it stands to reason that the iPad is skewing things heavily in Apple’s favor.

We sometimes see reports that claim Apple is losing ground, but more often than not, those numbers reflect shipments, not actual sales to consumers, as Kevin Tofel pointed out. Many of the Android devices reported as shipped are likely sitting on store shelves, whereas Apple’s numbers represent devices actively being used by consumers.

Determining the actual gap here is made even more difficult when you consider that new Android tablets are constantly coming to market. Combine old stock with new, throw in a glut of essentially obsolete devices in the form of the discontinued HP TouchPad, which could be had for just $99 during the last couple of months, and you get even more of a statistical minefield that probably doesn’t represent long-term trends in any accurate way.

Apple is best positioned to innovate

The iPad has a huge lead in its current form, and Apple has lots of money to spend on R&D, which makes it the best-positioned tablet-maker to introduce category-innovating new form factors, features and technologies. The competition can try to shake things up, too, and have done so with different sizes, detachable laptop docks, etc., but if the groundwork isn’t laid, these variations on Apple’s successful model have little chance of succeeding.

Predictions that draw parallels between the smartphone realm and the tablet market are missing the point; the real future makeup of the tablet landscape will be drawn by unconventional attacks like Amazon’s $199 Kindle Fire, which counts not on mimicking Apple’s success, but on consumer willingness to sacrifice on features in order to get a low-cost, content consumption device.

Even so, I think the iPad will weather these and other assaults and continue to reign beyond the 2015 mark, for the reasons outlined above and my past arguments about why Apple’s tablet is still more appealing than the Amazon offering.

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Since the early adopter crowd is the group most likely to cycle through devices quickly, this makes sense. Android handset makers usually don’t adhere to any hard-and-fast update schedule, and they often release multiple devices or iterations of the same device within a single calendar year. If what you’re after is the latest available tech, Android has the edge, regardless of whether or not the overall user experience of iOS is arguably better.

Of course, it helps that Android has around a dozen hardware partners in the U.S. alone offering a variety of devices across all major carriers, but even among that crowd, some single device makers are beginning to pull away from the field with aggressive hardware upgrade plans.

The best example is Samsung, which announced a new 5.3-inch smartphone on Thursday at the IFA 2011 European tech conference. The new Galaxy Note, as the monster phone is called, also has a 1.4 GHz dual-core processor under the hood, as well as a pressure-sensitive touchscreen that can be used with a stylus for accurate drawing, sketching and writing. The huge 5.3-inch display boasts an impressive 1280×800 resolution, on par with many netbooks. Bristling with new shiny bits, it’s an early adopter’s dream device.

The features mentioned above won’t appeal to all, because as Steve Jobs has rightly pointed out in the past, most consumers are after an overall experience, not a list of specs. But one group, namely the early adopter group, is very much focused on the list of specs, and Samsung is showing that you can do well by appealing to that level of interest.

Early adopters buy early and buy often. The nature of Android devices makes it more possible for those on the edge to stay there, no waiting required. Given the rise in popularity of smartphones, combined with a generation of device buyers that grew up using them, we might see more and more consumers comfortable with device updates that are much more frequent than once (or less) yearly.

Apple doesn’t adhere to a strict yearly schedule with its Mac releases; approximately every six to eight months, it introduces minor overhauls and spec bumps when new processor tech is made available to keep its machines more or less current in terms of specifications. Doing the same with an iPhone might make sense and attract the wandering gaze of customers focused firmly on the horizon of mobile tech.

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Apple Store Sanlitun in Beijing, China

Apple has been showing strong growth in greater China in recent quarterly reports, including a sixfold increase in year-over-year revenue in the company’s third quarter. In its most recent investor call, Apple reported its total sales revenue in the region as $3.8 billion. Now it looks like Apple is even beating a longtime regional heavyweight for the first time, as Lenovo saw just $2.8 billion in sales (via FT) during its most recent financial quarter.

Lenovo still grew 23.4 percent compared to its business a year ago, and it remains the third-biggest PC maker worldwide by shipment volume (and the largest in China for eleven years running). But Apple pushed past it, due in large part to strong iPhone and iPad sales, which are doing much better than Lenovo’s Android-based LePad tablet and smartphone lineup. Note that Lenovo actually originally sold off its smartphone business in 2008, only to buy it back in 2010, which gave the iPhone a considerable head start in securing a beachhead for Apple. Also, Apple’s iPhone presence in China could get even stronger when China Mobile starts selling the Apple device.

China is a key market for Apple going forward, as it continues to grow in terms of consumer buying power on the world stage. Chinese consumers seem to be gaining confidence, especially when it comes to luxury goods, and Apple is perceived as a luxury brand there perhaps more than anywhere else in the developed world. That means Apple is in a good position to continue to capture market share away from competitors as Chinese spending power increases.

It’s a small but significant milestone as Apple continues to grow its business in markets that hold a lot of future growth potential. It will be interesting to see how that is affected by the release of the iPhone 5 and other upcoming devices, including ones that remain speculative, like the low-cost or prepaid iPhone.

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However, it wasn’t really a terrible loss for RIM, as the entire smartphone market grew 78 percent overall. Though Apple did surpass RIM in sales volume (and seems poised to ship even more in the future, since supply constraints provided a choke point in 2010), it still has a long way to go before it approaches Nokia, the reigning king of the smartphone hill.

Nokia shipped 26.5 million devices during the three-month period. Apple, by contrast, shipped only 14.5 million, almost half as much as its biggest rival. Nokia benefits from a much greater presence in Asia and Europe, and will be hard to shake from its lofty perch, though it’s losing ground. It held 34.4 percent of the market in this latest scan, down from 37.8 percent from the same period the previous year.

Apple’s market share grew from 17.0 to 18.3 percent over the year. The BlackBerry’s take dropped as much as Nokia’s, falling from 19.6 to 16.1 percent; RIM shipped 12.3 million devices during the quarter. The Canadian company is missing out in large part due to “a limited presence in the high-growth touchscreen segment” according to Strategy Analytics.

According to analysts from Canacord Genuity, a firm 0perating in RIM’s own backyard, Apple’s lead in the smartphone market may be insurmountable at this point, even for Google.

Following Monday’s conference call, the firm raised its target price on Apple stock to $421 and called Apple “unbeatable.” Analyst Micheal Walkley said simply, “We agree with his views,” referring to Jobs’ claim that “we’ve now passed RIM and I don’t see them catching up with us in the foreseeable future.” Analysts also agreed that Android was too fragmented, and argued that the App Store’s head start in terms of its software library is a market-defining advantage.

Unbeatable is a strong word to use in a sector as prone to transformative change as mobile tech, but Apple is currently occupying a position in the market that almost no one would’ve predicted five years ago, so perhaps in this case, it’s merited.

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When you continually take such wide strides in innovation, intentional or unintentional, there will always be casualties. In 2010 alone, Apple held no less than five major media events that in some way affected the way markets were defined and revenues were earned for a significant number of companies.

Dead or Dying Already

This year we have witnessed the fall of HP’s Slate that Microsoft CEO Steve Balmer introduced at CES, a massive shift in consumer purchasing behavior in the netbook market and media moguls struggle with the hard decision between propping up traditional print or adopting newer digital technologies. When it comes to development platforms, Steve was more than willing to speak out and share his thoughts on the subject, while evidence continues to mount that he was right about Adobe Flash on mobile devices. With just one of two new lenses, two consumer markets were affected: the digital snapshot camera and the handheld HD video recorder. I loved my Flip Mino HD video recorder (past tense). With HD video recording capabilities, on-device editing, and the ability to share instantly online, the justification for a separate Flip video recording device just did not make sense any more.

September 2010 Media Event

There is a reason the entire tech industry pauses a moment to see what Steve will say next at these major press events. Many are holding their breath to see if their bottom line will be affected in either a positive or a negative manner. Every time Steve talks, things change. And yesterday’s event was no different. In many ways, the latest media event from Apple will shake more things up than any previous media event yet this year.

Multi-Room Entertainment Systems: AirPlay has some pretty big names backing it including Denon, Marantz, B&W, JBL and iHome. Simply having the ability to stream music simultaneously to multiple rooms could add some serious competition to products like the Sonos Music System, Bose SoundLink, Yamaha MusicCast and Klipsch LightSpeaker to name a few. Apple is potentially cannibalizing its own product by competing with the presently available AirTunes capability of the AirportExpress.

Print Apps in App Store: So what will happen to the sale of printing apps now that Apple will support printing on the iPad? Until we see exactly how printing will work, it is hard to say at this point. But rest assured that consumers’ willingness to pay a premium for specialized printing abilities will be at a minimum. Currently there are more than a dozen apps for the iPad that can print. Many of these are currently priced anywhere from $4.99 to $9.99. These price points will likely drop, as will support for some of the apps simply because the market will shift in this category.

HDR Apps in App Store: Just as the 5.0 MP camera that Apple introduced with the iPhone 4 has likely cut into the sales of casual point and shoot digital cameras, updating the on board camera app supplied with each iPhone will undoubtedly affect the sales of HDR Apps. This includes wonderful Apps like HDR Camera, TrueHDR and Pro HDR. I have tried these apps and I must say that the when the camera is held steady, the results are stunning.

Roku and Boxee media Devices: While the new Apple TV is not revolutionary, the price point sure is. At the magical price point of just $99, it will be hard for any household with iPads, iPhones, iPods and iMacs to refuse. Especially when this device will make it easier than ever to view all of the memories captured, organized and edited with each of those iPads, iPhones, iPods and iMacs. If Apple would ever decide to make MobileMe free to Apple customers again, this one time cost would be easy to justify. Devices like Roku and Boxee now have some serious competition to contend with.

Everyone wants to lead, but just how far out in front is Apple? Can any company, including Google, have as dramatic of an impact across the entire technology industry, each and every time they decide to have their CEO invite the media over for a chat? In fact, it may be a good idea to check with Steve before you make any sudden moves in the tech industry.

So how has Apple affected your life in 2010?

No matter what your company did in the past two years, Apple did it better. It reminds me of Sony in the 80s and Microsoft in the 90s. Companies were afraid of Microsoft in the 90s. All Microsoft had to do is decide to enter your space and you’d be out of business, if you weren’t lucky enough to be bought by the company. That’s not the case anymore. In this sense, Apple is the Microsoft of this decade.

Let’s take a look at RIM’s BlackBerry Torch, just released last week. Gizmodo had a great post on why the Torch launch was an utter failure, with only 150K units sold in the first week. In that article, they said:

The hordes are proclaiming the Torch a massive failure, and they’re right — but not because of how many units they sold. 150,000 handsets is a lot of phones. In fact, it’s totally in line with other major launches of the last couple of years: Sprint sold that many Evo 4Gs in its first three days, and it’s three times as many as the Palm Pre managed at launch.

Who it didn’t compete with, of course, is the iPhone. The 3GS and 3G both moved a million over their opening weekends, and 1.7 million people took home an iPhone 4 at launch. And that’s where RIM got into trouble.

They’re right. 150K units is a great number, but it doesn’t compare to Apple’s 1+ million numbers every time a new iPhone comes out. That’s the point. The Blackberry Torch, HTC Evo and Palm Pre all look like complete failures when measured against Apple.

Recently, Asus said they’re lowering production of netbooks due to a lower sales forecast. Nowhere in that quote did their CEO say Apple’s iPad is to blame, but it didn’t stop every blogger from making that causal link. What about the fact that netbooks have had the same Intel Atom processors, same form factor, same low-resolution monitors and same version of Windows XP on them since 2006 as the reason for lower sales? Maybe it’s time for Asus to actually innovate instead of putting the same stuff inside a different color case and throwing a $299 price tag on it.

The specifics of how other companies are doing doesn’t really matter. The issue is that, no matter what any tech company does, they’ll be compared to Apple in some way. Tech companies can’t release a mouse, display, keyboard or television-connected device without being compared to Apple. I’d like to see Microsoft release a battery charger at this point without drawing a negative comparison. Wait, never mind, they have one of those.

My point is, Apple is the yard stick by which all others are measured. There are better products out there with zero visibility and meager sales. In fact, the next Apple is probably out there somewhere. Let’s hope manufacturers don’t just throw up their hands and scale back in the face of stiff competition from Cupertino, and as consumers let’s keep an eye out for the next little guy swimming bravely upstream.

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For the moment, though, Apple is doing much better than anyone in the space, really. The latest comScore report, which covers a three month period from September to December of 2009, shows Apple as having 25.3 percent of the total smartphone market share, up 1.2 points from 24.1 percent at the beginning of the period measured.

Research In Motion (RIM) came in first place overall once again, with 41.6 percent of U.S. smartphone subscribers opting for a BlackBerry device. But that number represented a slide, ultimately, as RIM began the measurement period with 42.6 percent. Microsoft and Palm likewise slipped, with MS dropping from 19 to 18 percent, and Palm losing 2.2 points, down to 6.1 percent.

Google had the lowest market share of the bunch, with 5.2 percent of subscribers. But that number was up from only 2.5 percent in September, suggesting that it was probably helped along considerably with the introduction of the Motorola Droid. 2.7 points also represents the largest market share grab made by any smartphone manufacturer over the period of the report, so Google is indeed the company Apple needs to be most worried about.

Palm is probably the company everyone needs to be least worried about. The Pre and Pixi maker lost almost as much market share as Google gained, and was the only company on the list to post such a significant loss of ground. The Pre Plus and Pixi Plus could alter its fortunes, but I honestly can’t see customers who were disappointed with the originals going back for more at this point.

Going forward, Apple’s main concern is going to be with Google and how it fares now that it’s begun taking more control over its own smartphone future. The Nexus One drastically undersold the iPhone both in the first week and in the first month, so that’s got to be good news for Apple. That said, Google is doing something pretty much unprecented with regards to smartphone sales in the U.S., and it’s only selling the device in the U.S. as of yet. Apple had the advantage of selling its device through AT&T when it launched, which was an established sales and marketing channel for such devices already.

Apple’s growth over the period measured in the comScore report remains impressive, though, given that it had not introduced a new smartphone model since much, much earlier in the year. Google’s rise can be almost entirely attributed to the initially strong sales of the Motorola Droid, which was arguably the “it” device of the pre-Christmas season.

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