Paradise and The Instagram Effect
A quick search for 'Apple should buy Instagram' on Google shows that the general thinking of the inter-brain is Apple should / will / can kill Instagram with it's own social photo sharing service. Over and above the fact that Apple are famously useless at anything social ('Dad, what's Ping?'), the reason for Apple being rubbish at social sharing is that their entire culture is built on secrecy. Not sharing is their business model. It also extends into their service model. You must live your life inside the iTerms and Conditions, sorry I mean - iTunes. Your apps must pass the App store quality control and even your iAds are vetted. In this context, I am not sure Apple are capable of allowing grubby little people to share stuff in the context of their brand.
The Hanging Gardens of Babylon
But I really hope that Apple are paying attention to what can only be called the Instagram Effect. Put simply, Instagram is marketing Apple products at no cost to Apple. People are actually wanting to move to iPhone because Instagram is so great. The idea is you make services so good that people will change their behaviour to be part of it. In effect - to create services that market themselves.
In a way Instagram has created a kind of service-product Paradise . The literal reading of the word Paradise means 'To make a wall around' and currently Instagram exists behind the wall that is Apple. What happens when or if it's ported to the Android platform? Will it still be as good when you open the gates and let everyone in? It seems as though it might have to compete with a bespoke Android-first competitor that may, by then, have the upper hand.
Imagine a world with 2 standards of social photo networks, this could result in some interesting social engineering as our life streams become separated by our technology. Your wife has an Android phone and so has a tough job seeing the pictures you post of the kids on your iPhone. We may see entire families / groups of friends moving onto either the Android or iPhone in order to share their experiences. As a consequence, we'll witness some pretty powerful peer marketing for these devices and then, eventually, wars.