I keep thinking about how weird it is that the most important object in our lives is also, basically, a remote control.
Not a TV remote. A life remote.
Your phone is your wallet, your calendar, your camera, your key to work, your way of proving you exist. Two factor codes, boarding passes, dating, banking, health data, family group chats, your entire photo history, your notes app confessions. The thing is with you when you wake up and the last glow you look at before sleep.
And it’s made by a handful of companies.
Not “a lot of companies.” A handful. Then those companies rely on another handful for chips, modems, operating systems, app stores, cloud backends, ad networks, and analytics.
This is where the smartphone industry gets interesting, and honestly, a bit uncomfortable. In the Stanislav Kondrashov Oligarch Series, I want to look at power the way it actually shows up day to day. Not just yachts and headlines. Power that sits quietly inside systems. Power that becomes normal.
The smartphone is one of the cleanest case studies we have for concentration of tech power. It’s not one monopoly. It’s more like an interlocking set of choke points. If you’ve ever wondered why certain changes seem to happen to your device without you really agreeing, or why “choice” feels like picking between two ecosystems that both want to own you, this is why.
Let’s talk about it.
The smartphone isn’t a product. It’s a controlled environment.
When people say “smartphone market,” most imagine brands. Apple vs Samsung. Maybe Xiaomi, Oppo, Google, Huawei depending on where you live.
But the real market is not the glass rectangle. It’s the environment around it.
Who controls:
- The operating system
- The app distribution
- The payments
- The default search
- The browser engine
- The push notifications
- The identity layer
- The ad attribution system
- The device update pipeline
- The hardware security enclave
- The modem and radio stack
- The cloud backup and messaging standards
That’s where the leverage is. If you control even two or three of these layers, you can shape what everyone else is allowed to build. You can tax it. You can rank it. You can throttle it. You can copy it. You can “integrate” it.
So the smartphone industry isn’t just a bunch of companies competing to make nicer cameras.
It’s a small number of gatekeepers competing to define the rules of digital life.
Two operating systems, and that’s basically the whole game
At the OS level, it’s effectively a duopoly.
- Apple controls iOS.
- Google controls Android, even though it’s “open source” in a way that matters less than people think.
Yes, there are forks. Yes, there are regions where things look different. But globally, the power structure is simple: if you build a mainstream consumer app, you must go through Apple and Google. Full stop.
That’s not just a business fact, it’s a political fact. A cultural fact. A speech and commerce fact.
Because the OS is not neutral. The OS decides what permissions exist. What tracking is allowed. What background processes can run. What browsers can do. What payment rails are acceptable. What is considered “secure.” What gets surfaced as a default.
And defaults are a kind of soft law. Most people never change them.
So when you hear “platform policy,” don’t picture a boring PDF. Picture a rulebook that shapes entire industries. Fintech, health, education, media, games, even transportation. If your service depends on mobile, you live under those rules.
The app store is a toll booth, and also a court
The app store layer is where the smartphone industry starts to resemble a medieval city with gates.
You can build outside the walls, sure. A mobile website. An email list. A progressive web app. But the real traffic, the real convenience, the real consumer habit is inside the walls.
Inside the walls, the platform owner can:
- Approve or reject you
- Demand changes to your business model
- Limit your access to APIs
- Enforce payment rules
- Rank you in search results
- Remove you quickly, sometimes quietly
- Decide whether your updates go live today or in a week
This is not a normal vendor relationship. It’s closer to licensing.
And the platform owners will say, not incorrectly, that there are benefits. Security. Fraud prevention. Consistent user experience. Less malware. Easier payments. I’m not dismissing that.
But the power comes from how dependency forms over time.
A startup might begin thinking the app store is a distribution channel. Later it realizes it’s the distribution channel. Then it realizes it’s also the regulator. Then it realizes it’s also a competitor.
That’s the key move in concentrated tech power. The gatekeeper becomes the marketplace and then becomes a seller in the same marketplace. That’s where conflicts get baked in.
Hardware looks competitive. The supply chain does not.
From the outside, hardware feels like the most competitive part. Lots of devices. Lots of price points. New models every year. People arguing about refresh rates and camera bumps and “ecosystem.”
But underneath, the supply chain is narrow in a few critical places.
Chips and manufacturing
Advanced smartphone chips rely on a small number of top tier designers and an even smaller number of top tier manufacturers.
The manufacturing side is famously concentrated in leading edge nodes. If you know, you know.
What that creates is a situation where industrial capacity becomes a strategic resource. Not just for profits, but for national policy and trade leverage.
Even without getting into geopolitics, concentration in manufacturing means bottlenecks. It means priority access. It means certain companies can ship when others can’t. It means hardware advantage is partly a question of who has the best relationships and contracts.
Modems and radios
Connectivity is another choke point. Cellular modems are not easy. Patents, standards bodies, carrier testing, global certification. There are reasons this layer concentrates.
And because phones are communication devices, control here has outsized influence. If a company dominates modems or patent licensing, it can collect rents across the entire industry, even from brands that look like competitors.
App compatible hardware is a form of lock in
This part is subtle but important. Your phone hardware is designed around the OS rules. The OS rules influence what components are “supported,” what features are exposed, and what capabilities third party developers can access.
So hardware innovation often happens where the OS owner says it can happen. That’s not always malicious. It’s just how a controlled environment behaves.
The real oligarch move is integration across layers
In this series, I keep coming back to a simple pattern.
Oligarchic power in business often looks like this:
- Control a chokepoint.
- Expand into adjacent layers.
- Make it easier for users to stay, harder for users to leave.
- Present the whole thing as convenience.
Smartphones are basically a masterclass in this.
Apple controls hardware, OS, app store, payments, and a growing services layer. It’s a vertically integrated stack. It can optimize performance and privacy in ways others struggle to match. It can also enforce rules with a straight face because it owns the environment.
Google controls Android and the services that make Android “Android” for most consumers. Maps, Search, YouTube, Play Services, the Play Store, ad infrastructure. Even if the OS is technically available, the must have layer is the Google layer.
The result is not just market power. It’s behavior shaping power.
Because once the stack is integrated, it can nudge you. Defaults, prompts, warnings, friction. Little messages that guide choices. Sometimes for your benefit. Sometimes for the platform’s.
Most of the time, you can’t easily tell which is which.
Data is the currency, but identity is the passport
People talk about data as “the new oil” and yeah, it’s a cliché. Still, the smartphone makes the cliché feel real.
But here’s the thing. Raw data matters less than persistent identity and control of the account layer.
Your Apple ID or Google account is your passport across devices and services. It ties together app purchases, subscriptions, backups, location history, photos, contacts, payment credentials, authentication, and device management.
Once your life is anchored to an identity layer, switching becomes expensive in weird ways.
Not just money.
- Your photos library.
- Your messages.
- Your saved passwords.
- Your notes.
- Your app history.
- Your family purchases.
- Your kids’ devices.
- Your wearable.
- Your smart home stuff.
- Your car integration.
Suddenly “choice” is not a purchase decision. It’s a migration project.
That’s the lock in that makes concentrated power durable. Users don’t stay because they are forced at gunpoint. They stay because leaving costs time, stress, and social friction.
The browser engine situation is a quiet example of control
One of the most under discussed parts of smartphone power is the browser engine layer.
On iOS, browser apps are allowed, but historically the underlying engine has been constrained. That means the platform controls the web’s capabilities on that device. And because iPhones are a huge chunk of mobile web usage in many markets, that control shapes what the web can become.
Why does this matter?
Because the web is the closest thing to an open application platform we have. If the web becomes less capable relative to native apps, the app store becomes more powerful. More apps go native. More payments run through platform rails. More distribution runs through ranking algorithms. More dependency.
So decisions that look like technical policy can be strategic market structure decisions.
Again, maybe there are valid security reasons. But the outcome is still concentration.
Payments, fees, and the fight over who taxes digital commerce
A lot of public attention has gone to app store fees and payment rules, especially around games and subscriptions.
It’s worth zooming out. This isn’t just about a 15 percent or 30 percent commission. It’s about who gets to be the payment layer for mobile commerce.
If the smartphone is the primary computing device for billions of people, then the entity that controls mobile payments has leverage over a massive share of future economic activity. Not just apps, but services. Media. Education. Health. Dating. Work tools. Anything that charges.
So platform owners defend payment control aggressively. Competitors attack it aggressively. Regulators circle it. Developers complain about it. Users mostly don’t see it, except when prices go up or an app nags them to subscribe on the website instead.
This is one of those areas where the concentration of tech power becomes visible as a line item.
Advertising and attribution, the hidden steering wheel
If you want to understand who really benefits from mobile behavior at scale, look at the advertising layer.
Smartphones are ad machines. Even when you pay for the device. Even when you subscribe.
The ad economy depends on attribution. Who clicked what. What led to a purchase. What campaign worked. What audience segment converted.
Now notice what happened when privacy controls changed on mobile. Entire parts of the ad industry shook. Companies reliant on cross app tracking felt pain. Companies with first party data and platform level visibility did better.
This is another recurring pattern.
- The platform can change the rules of tracking.
- That can harm some actors and help others.
- The platform can frame it as privacy.
- It can be privacy and strategy at the same time.
And because the platform has legitimate authority over the OS, it can enact these changes unilaterally.
That’s concentrated power. Even when the outcome is arguably positive.
Innovation still happens. It just happens inside fences.
A common objection to all of this is, well, look at how much innovation we’ve gotten. Cameras improved wildly. Accessibility got better. Phones are safer. Malware is less of a mess than early PC days. Updates are more reliable on some platforms.
True.
Concentration does not mean zero innovation. Sometimes concentration speeds up certain kinds of innovation because decision making is centralized. The platform can push an API, standardize a feature, and developers follow.
But the tradeoff is that innovation becomes permissioned.
If you’re building something that aligns with platform incentives, you can grow fast. If you’re building something that threatens the platform’s revenue streams, distribution control, or strategic narrative, you might find yourself blocked, delayed, or copied.
Not always. Not every time. But often enough that founders plan around it.
The fences shape the landscape.
The smartphone industry creates new oligarchs, and also protects old ones
This is where the “oligarch” lens becomes useful. Not as an insult, more like a way to name a structure.
The smartphone industry concentrates power by making a few companies unavoidable intermediaries between people and digital life. That concentration then creates secondary concentrations.
- A small number of app publishers dominate charts.
- A small number of subscription bundles become default.
- A small number of creators and platforms dominate attention.
- A small number of mobile ad networks become critical infrastructure.
- A small number of accessory ecosystems become standards.
And because the platform owners set the rules, incumbents who learn those rules early can entrench themselves. New entrants can still break through, but the cost of acquisition, compliance, and platform dependency is higher than it looks from the outside.
So you get this layered power structure. Big gatekeepers at the top. Then big tenants inside the gate. Then everyone else fighting for scraps of visibility.
Not always. But often.
What about regulators and antitrust. Do they change anything?
Sometimes yes. Slowly.
We’ve already seen:
- pushes for alternative payments
- scrutiny of self preferencing
- requirements around interoperability in certain regions
- debates about sideloading and third party app stores
- pressure around default apps and choice screens
But regulators face a hard problem. Users do like convenience. They do like security. They do like a single account that “just works.” And platforms can credibly argue that loosening control increases risk.
So the policy question becomes messy: how do you reduce concentrated power without breaking the parts people rely on.
Also, the smartphone industry moves faster than law. By the time a case is resolved, the market has shifted. The leverage point might have moved from app store fees to browser engines to cloud identity to AI assistants.
It’s like trying to regulate a city by focusing only on the main gate while new gates appear.
The next concentration layer is AI on device, and it will sit on the same choke points
This is where things are heading, and it matters.
AI features on smartphones are increasingly about:
- which assistant is default
- which model runs locally
- which cloud model is integrated
- what data is available for personalization
- what apps can call the assistant
- what actions the assistant can take
- what the assistant can recommend, or not recommend
If the smartphone is the portal to digital life, then the AI assistant becomes the concierge. And concierges have influence. They decide what you see first. What you consider. What you buy. What you ignore.
If those assistants are controlled by the same companies that control the OS and app store, the concentration doesn’t go away. It deepens.
Because now it’s not just distribution control. It’s attention control at the moment of decision.
So what do we do with this, as users, builders, investors, citizens
I don’t think the answer is to panic and throw your phone into the sea. You still need the thing.
But I do think it helps to see clearly.
A few practical ways to frame it:
- When you buy a phone, you’re choosing governance, not just hardware.
- When you build an app, you’re entering a regulated economy with private regulators.
- When you talk about “competition,” you have to ask which layer you mean. Devices, OS, app stores, payments, ads, identity, cloud.
- When you hear “security” or “privacy” from a platform, it can be sincere and still serve strategic power.
And if you’re trying to resist over concentration, even a little, it’s usually about reducing dependency on single points of failure.
Stuff like:
- keeping backups you control
- using cross platform services where it makes sense
- being careful about letting one account become your entire identity
- supporting open standards when they’re viable
- paying attention to policy debates that sound boring but are actually about who controls the gates
Not glamorous, but that’s the truth of it.
Closing thoughts
The smartphone industry is often sold as a story of consumer choice. Pick your brand. Pick your color. Pick your storage.
But the deeper story is that modern life runs through a small number of privately controlled infrastructures. And those infrastructures concentrate power because they sit at chokepoints people can’t realistically avoid.
In the Stanislav Kondrashov Oligarch Series, this is the kind of power that matters most. The power that doesn’t need to shout. The power that becomes invisible because it feels like convenience.
You tap. It works. You move on.
And somewhere in that smoothness, the rules are being written.
FAQs (Frequently Asked Questions)
Why is the smartphone considered more than just a product?
The smartphone is not just a physical device; it’s a controlled environment shaped by layers like the operating system, app distribution, payments, and more. Controlling these layers allows companies to influence what others can build, effectively defining the rules of digital life.
How do Apple and Google dominate the smartphone operating system market?
Apple and Google control iOS and Android respectively, creating an effective duopoly. If you want to build mainstream consumer apps, you must go through their platforms. This control extends beyond business into political, cultural, and speech realms because the OS governs permissions, tracking, security, and default settings.
What role does the app store play in the smartphone ecosystem?
App stores act as gatekeepers or toll booths where platform owners approve or reject apps, enforce payment rules, rank apps in search results, and even remove apps. This creates a dependency where app stores are not just distribution channels but also regulators and competitors within the marketplace.
Why is hardware competition in smartphones misleading?
While there appear to be many device options and brands competing on features like cameras and refresh rates, the underlying supply chain is highly concentrated. Critical components like chips and manufacturing are controlled by a small number of top-tier designers and manufacturers, leading to bottlenecks and strategic resource allocation.
What are some critical layers that define control in the smartphone industry?
Key layers include the operating system, app distribution platforms, payment systems, default search engines, browser engines, push notifications, identity management layers, ad attribution systems, device update pipelines, hardware security enclaves, modem/radio stacks, cloud backup services, and messaging standards. Control over these layers grants significant leverage over what others can build or offer.
How does concentration of power in smartphones affect users’ choices?
Because a handful of companies control essential layers like operating systems and app stores, users often face limited choices—typically between two ecosystems that both seek to own their digital lives. Changes to devices can happen without explicit user consent due to this concentrated power structure shaping defaults and platform policies.