It wasn't so long ago that the battle for personal electronic supremacy was being fought on the desktop. Back then the conventional wisdom was that Apple, with 5% market share, was a niche player. Steve Jobs and Apple devotees everywhere fought back against this characterization by drawing a parallel to the cars:

"Apple's market share is bigger than BMW's or Mercedes's or Porsche's in the automotive market. What's wrong with being BMW or Mercedes?" - Steve Jobs

This trope continued when the iPhone was announced, and Microsoft CEO Steve Ballmer belittled the product, saying:

"There's no chance that the iPhone is going to get any significant market share. No chance. It's a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I'd prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get." - Steve Ballmer

Now, of course, the tables have turned and Apple is a major player in the smartphone market and the clear market leader in the tablet market. Now when a new tablet is unveiled the knee-jerk question is, 'Is it an iPad killer?' and if the answer is 'no' then that is the perspective from which it is viewed. If it's not "The One" then the question is how slow will its death be and will its successor be "The One"? Apple has shown a unique ability to democratize the smartphone and tablet markets. Not everyone can afford a smartphone, but many can, and they're using the same phones that billionaires use, because the top products in the market are within arm's reach. A similar move has taken place in the tablet market. Where products recently ranged from cheap underpowered novelties to $4,000 touchscreen PCs, the market has flattened to the point where the President of the United States carries around the best tablet money can buy, and it's the same iPad that is forecast to sell 40 million units this year. So what makes 2011 different than 1984? Now that the tables have turned and Apple is the market leader, is the belittlement of the 5% market share just as disingenuous? Perhaps not. Apple (almost) never tried to be Windows. They (almost) never allowed their product line to be commoditized, and when they did, back in 1995, they realized their mistake and shut down the clones. Niche products survive because they meet niche needs. In the '80s and '90s Apple survived first on the backs of the education market, and later as the workhorse of the creative market. Their products cost more than the mainstream competition, but they were superior in their markets. The difference with smartphones is that the transition of the phone to a highly flexible software platform has removed market differentiation. The last major smartphone brand specifically designed for a market segment is the Blackberry, with its focus on the needs of the enterprise, but even their base is drifting off because people don't exist as enterprise employees 24/7, and they've become unwilling to tote multiple devices for the different facets of their life. Now companies that try to compete with (or unseat) Apple in the phone or tablet space do so by trying to create a marginally better product with slightly better specs at an identical price point. Rather than trying to be BMW, they're trying to be the Hyundai to Apple's Honda. They roll out cars that may be just as good (though they're not yet) but they have no status. They're not something people would pay more for, which is why the Motorola Xoom isn't a BMW. It has neither the brand nor the performance to be a luxury alternative to Apple's commodity iPad. Put more succinctly, products designed to replace the iPhone or iPad fail if they only reach 5%, because that 5% is unprofitable and often unsustainable. Alternatively, a product designed to meet needs that are being underserved by the market-leading product can be proud of its 5%, because it stands for something. Like the Mac in the '80s or the Blackberry a decade ago, such a product builds a story, a brand and a community around itself. It's better for some people because it caters to their specific needs in the way that the mainstream product can't. It can justify a premium price because it holds a place of pride in those who use it. In short, such products are 'the products for the rest of us.' There is no 'tablet for the rest of us' or 'smartphone for the rest of us' out there challenging Apple. Android's doing very well at competing with Apple in the smartphone space. They may even beat them in the long run. But Android with a 5% market share would never be deemed successful. Maybe the advantages of scale herald the end of the 'BMW of electronics,' but I don't think so. Consumer hardware is a hard market for a startup to find success, but I bet it'll happen. Just as SpaceX and others have recently heralded a new age in rocket innovation there will be a time down the road where a few small companies will redefine the mobile computing market in a way that will eventually be adopted by the major players, but for a time will still be the BMW of their day. Just as upstart Palm defeated the Newton and Danger changed the way people viewed phones as digital communication devices, in a few years the market will stagnate, leaving an opening for something completely new. And in the decades that follow those companies will probably be absorbed by the bigger players and their uniqueness will be incorporated into the greater whole, making something even better, just as Palm is being reinvented by HP and the fruits of Danger are found both in Android and deep in Windows Phone 7. The wheel turns.