In our second installment of the, “What are they putting in the water at PCMag?” series, we take a look at an article titled, “Is the iPhone Now the Underdog?” by PCMag’s Editor-in-Chief, Lance Ulanoff.

Sebastien grilled Mr. Ulanoff over his last article on the proposition of Apple selling unlocked iPhones in the United States. This time, we’re going to take a look at Mr. PCMag’s idea that Apple needs to make “drastic improvements” to the iPhone to “maintain market share and mindshare.”

Mr. Ulanoff begins his piece by pondering over the Nokia N9 and its MeeGo OS.

“I had an epiphany this morning while staring at the pointless Nokia N9 smartphones images. No, not that the moribund MeeGo operating system is not where consumers want to place their smartphone bets, but that the MeeGo interface looked a lot like an iPhone.”

Very true, Lance. It’s evident that MeeGo does replicate elements of iOS. And I guess it’s fair to say that it looks a little like the iPhone.

“Then it hit me: Every smartphone interface looks like an Apple iPhone knockoff.”

That’s probably the most correct statement that Mr. Ulanoff makes in his whole article. Since Apple unveiled the iPhone in 2007, the majority of the market has been playing catch-up.

Lance continues,

“From a distance, I often cannot tell if people are carrying an Android phone or an iPhone. Up close, I can usually tell (cases make it more difficult), but the experiences of using the different phones feel more and more the same. Interestingly, Microsoft’s Windows Phone 7 is now the only phone platform that stands out.”

You must need glasses, Lance. Because, as long as the device doesn’t have a huge case hiding it, it’s pretty to easy to spot an iPhone among a sea of Android devices.

The HTC Evo 4G and iPhone 4:

They look a little different to me. And I do wear glasses. From a distance, I can see where you could say that they look the same, but, in general, it’s pretty easy to differentiate. And I’d say the software look a little different, too.

I agree with Mr. Ulanoff that Microsoft’s Windows Phone 7 is a nice, clean deviation from the cookie-cutter designs we’ve been seeing on most mobile OS’s. Windows Phone 7 does feel very different than the iPhone’s UI.

From here, Mr. Ulanoff makes a turn towards Android.

“Android, on the other hand, went from being a spec in Apple’s rear-view mirror to eating up half the smartphone market. It did so, by the way, with a very simple strategy: Team up with every major manufacturer and get on as many carriers as possible with a wide assortment of desirable slabs.”

Hold the phone, Mr. PCMag! There you go comparing Android’s market share to the iPhone’s. That’s like comparing Windows market share to the iMac’s. One is strictly OS-based, one is hardware-based. If we include all iOS devices, including the iPad and iPod touch (which would be the only fair way to compare Android and iOS), Apple accounts for 44% of the market (according to Apple).

A recent study from Needham analyst, Charlie Wolf, shows that Android’s market share has actually fallen from 52.4% to 49.5% in the last business quarter. That puts iOS and Android at about a 5% difference. And predictions are that Android will continue to see a decrease in U.S. market share, in light of Apple’s upcoming iPhone announcement.

“In our opinion, this is just the beginning of Android’s share loss in the U.S.,” Wolf writes. “The migration of subscribers to the iPhone on the Verizon network should accelerate this fall when Apple coordinates the launch of iPhone 5 on the GSM and CDMA networks. The iPhone could also launch on the Sprint and T-Mobile networks.”

So, Lance, by saying that “Android is quickly catching up,” you’re actually contradicting recent statistics.

Mr. Ulanoff thinks that Apple’s downfall was its exclusivity to one carrier for four years,

“The company had to know that consumers would not all simply march over to AT&T and that those who were either contractually tied to a different carrier or simply could not stand AT&T would jump at viable alternatives as soon as they became available.”

Really, Lance? Because AT&T just saw a 33% increase in new iPhone activations last quarter. And that’s after the exclusivity deal ended with Apple. The previously quoted analyst, Charlie Wolf, predicts that Android users on Verizon are holding out for the iPhone 5.

“It’s reasonable to assume that a material percentage of Verizon subscribers who plan to switch were content to wait until the iPhone 5 arrived later this year,” says Wolf. “One reason Apple delayed the launch of iPhone 5 until September is that it reportedly plans to coordinate the launch of the GSM and CDMA versions of the phone. To do so in June would likely have upset Verizon subscribers who purchased iPhone 4 in the preceding months. It’s our expectation, then, that the anticipated surge in iPhone sales on the Verizon network is likely to occur this fall after Apple launches iPhone 5.”

A recent survey also stated that the iPhone is the top-selling handset on AT&T and Verizon. The iPhone 5 is expected to have universal baseband support for both carriers.

Mr. Ulanoff also believes that the lack of a physical keyboard on the iPhone is one of Apple’s huge mistakes. Combined with the fact that Apple was carrier restrictive, and that Apple is the only manufacturer for its own device, he says,

“Each and every one of these factors chipped away at Apple’s touch-screen smartphone dominance.”

Again with the “smartphone dominance” thing.

“Apple, I believe, is aware of this. Whatever it does this year with the iPhone—and it will do something—will be informed by this underdog mentality.”

Apple has operated under an array of different mentalities in its past, but I can guarantee you that an “underdog” mentality has never, and will never, be one of them. The iPhone is the reason that 90% of smartphone designs consist of a large touchscreen with only a few buttons on the edges of the device. Apple started a trend, and if anything, the rest of the market is the “underdog.”

Lance believes that the iPhone 5 has the potential to “reclaim Apple’s dominance,”

“I think, though, Apple will work on two different fronts to reclaim dominance and ensure momentum. On the product front, Apple will make some very big changes in the iPhone 5. Now this is only a guess, but I think there is a chance that the iPhone 5 will not be one phone. I think there could be design options. One will be the iPhone 5 with a larger screen, thinner body, higher-resolution screen, faster processor, and the return of a plastic back. It’ll still have fairly sharp lines, but I don’t think the metal rim and glass back on the iPhone 4 has enhanced the product or its allure significantly. Now, bear with me, the second iPhone will be the iPhone 5K. “K” will be for keyboard. I know, crazy, but imagine what would happen if there was an iPhone with a physical keyboard. Obviously, Apple would find a way to keep the iPhone 5K as thin as the iPhone 4 and still deliver a slide-out keyboard. That would be huge.”

While I do agree that there’s a good change we’ll see two iPhones this Fall, the proposition of a “5K” device is absolutely preposterous. Apple is the reason that physical keyboards are a dying trend in mobile devices, and Steve Jobs has been adamant against the idea of a physical keyboard in the past. Apple would never, ever compromise their sleek, cohesive product design with a cumbersome, Blackberry-ish physical keyboard.

“I know. This will not happen. If it does, though, I might finally be 100 percent comfortable with an iPhone. That, of course, is my point: This is one clear way to bring a whole new set of consumer (and old-school business users, aka BlackBerry customers who are ripe for the picking) into the iPhone tent. I bet they’d find the iPhone 5K irresistible.”

Well Lance, considering that the iPhone is now more popular than Blackberry in the United States, I don’t think Apple is really worried about pleasing the remaining physical keyboard junkies out there. The White House has even dropped Blackberry for the iPhone. The “iPhone tent” is becoming irresistible without a physical keyboard’s help.

To give Mr. Ulanoff credit, he does praise Apple’s innovation.

“Apple introduced us to the concept of apps and how they would live on screen. It invented the concept of a touch-screen mobile device that offered a “desktop” landscape larger than the device itself. The gesture-based interface and how single and multiple fingers would interact with it was an Apple invention.”

I believe that apps were on PalmOS years before Apple showed up to the smartphone game, but Lance’s point is still somewhat valid.

He goes on to say how Apple’s recent multitouch patent gives the company incredible leverage over other smartphone companies. The original reports on the patent he mentions were a little sensationalized, and more research has revealed that the patent may not be as earth-shaking as was originally thought. (Coincidentally, PCMag was the publication that started the media firestorm around that patent in the first place.)

It’s important to remember that Apple has never cared about market share. It cares about selling hardware, but it has never been concerned with what percentage of the market it claims. In a keynote, Apple gets all of the numbers out of the way at the beginning of the talk, and then takes the bulk of the time to talk about new hardware and/or software. Apple is about products, not numbers.

But if we are going to play the number game, then think about the day when the new iPhone is suddenly available for the same price as most Android handsets on both major U.S. carriers. It will be interesting to see Android’s collective market share after a year of that reality.

I think M.G. Siegler says it best,

“Yes, one device on two carriers could well outsell dozens of devices on four carriers.”

Mr. Ulanoff, if you think for one second that Apple is concerned with the iPhone’s “market share,” you’re wrong. Apple was recently declared the world’s most valuable brand, and the Cupertino outfit’s mindshare is absolutely off the charts. So much so, that studies have shown patterns of religious worship in the brain when customers come into contact with Apple products.

Apple is making money hand-over-fist on the iPhone and the App Store. And with enough cash to buy the majority of the U.S. mobile industry, I think it’s safe to say that Apple is not the “underdog.”