In Principle, It’s Game Over for iPhone’s Competitors

| Editorial

There is little talk anymore of iPhone killers. In fact, it's questionable whether anyone, in this economic climate, can overcome the advantages the iPhone has in marketing and technological muscle. Here are the reasons why.

Lately, I've been seeing major, big time, expensive ads, full page, at the Wall Street Journal and Newsweek, There are probably other instances I've missed. Here's one I scanned from Newsweek's back cover.

Apple print ad

Combine this paper ad campaign with:

  1. Apple's patents
  2. Other competitors playing catchup in a recession - which curtails their own resources
  3. Apple iPhone apps on just every TV show each evening in prime time - dizzying
  4. The buzz that Apple's marketing creates
  5. The halo effect
  6. A significant fraction of the sessions at WWDC cover the iPhone.
  7. The iPhone has 67 percent of mobile browser market share according to Net Applications.
  8. Apple has 11 percent of the smartphone market share, and it's growing fast. BlackBerry is okay for now, but Nokia's is dropping.
  9. 40,000+ apps in the app store

... and you get a freight train that's just about unstoppable. I also believe there's a synergistic effect. Customers who buy iPhones say to themselves: "If the experience is this good on an iPhone, it must be equally terrific on the Mac."

My perception right now is that PC apologists, Windows Mobile apologists and Apple competitors are doing everything they can to make it appear as if it's all business as usual. The way to do this is to look at isolated items and drag out exceptions and mythconceptions.

However, when I look at the big picture, I see that the rest of the industry is no closer to closing the gap than they were in July 2008 when the 3G iPhone appeared.

The only remaining question is, what would be the impact of Apple obliterating the smartphone industry? And don't take me wrong, but Apple is not the kind of player who thinks about playing in a friendly sandbox. After years of customer indifference and technological somnambulance by competitors, Apple would love to bury every other competitor.

The list above suggests the handwriting is on the wall. However, a lot of people, industry executives and tech journalists, will vainly try to say it isn't so. Competition is healthy. Apple can only go so far with this product.

I don't believe a word of it.

Comments

John Elberling

well, maybe. but it ain’t over until it’s over ... and when will that be? next year after WinMobile 7 is finally out and does a pass/fail - or will it be too little too late for MS by then?

as noted it is really apps that are driving the smartphone market today, not all the other features, bells, and whistles. not noted, but in support of the iPhone platform’s dominance, is the installed base of the iPhone OS - which very importantly includes the iPod Touch - that is now approaching 40 million and is growing by at least 20 million units a year.

none of the other new “app phones” with touchscreens had/have any installed base to start with at all. that is, their next generation apps and games that can match the iPhone’s in content and abilities don’t work on older models of those phones. and none of them have a PMP non-phone variant to expand sales. so Apple is ahead of RIM (the Storm) and Android something like 40 million to 5 million each in next gen apps market base, and the gap will keep growing. all the competing platforms, also including Nokia’s Symbian, the Pre, and MS’ already obsolete WinMo 6.5 will divide the non-iPhone market installed base further among themselves while Apple continues to increase its lead over any one of them. so you know which platform will always lead the app competition.

btw, Sony this morning hyped how the PSP has sold 50 million lifetime units while announcing the new (and much smaller) PSP Go for the fall. but by the time it goes on sale, the iPhone/Touch total sales will likely have also passed the 50 million mark, soon taking second place in the portable game player market too. it would take a few more years to catch up to the Nintendo DS, now at 100 million lifetime sales (tho many are no longer in use).

Nemo

Those whom the Gods would destroy they first make proud.  While I agree that Apple’s iPhone has the advantages recited in the article, it must not fall into the fatal traps of hubris and complacency.  It must focus relentlessly on making insanely great iPhones, Macs, and on making all of its other products insanely great to continue to win the competition and dominate the market.  GM once dominated the international market for automobiles, producing some iconic products, but it became proud and complacent.  Yesterday, GM declared bankruptcy.

strells

Your title is very misleading.  Saying “it’s game over for iPhone” means that the game is over for iPhone (i.e. iPhone loses), not the other guys.  Your title should have been something like “it’s game over, and iPhone wins!”

Steve Jobs

Silly title… Your article expresses the exact opposite of your headline. It’s game over for iPhone’s competitors, not for the iPhone.

rpaege

I personally hope the Blackberry and iPhone continue to duke it out.  They are both terrific products, and they’ll only get better by leapfrogging each other technologically. 

Now if service plans were only more affordable.

Bregalad

Blackberry is a solid product line, but developing new apps for it is, well, let’s just say it’s not as pleasant as using the iPhone SDK and there are some things you just can’t do on a BB.

I don’t think Apple will get complacent. They have a big target painted on their back and everyone is aiming at them. The Android and Pre are just the latest in what will be an endless barrage of attacks.

John Martellaro

Wouldn’t that be ... game over against iPhone?  Sigh.  English language every day usage wins out.

-JM

James

I would think if the rumors are true about less expensive versions ($99 for 4GB), it’ll be a massacre. I think the only thing that’s held Apple back, so far as iPhone goes anyway, was the price point, and with all the goodies in 3.0, iPhone sales are about to get even more ridiculous.

Having said that though, I would also hope that Apple doesn’t sit on their laurels. There’s still plenty of territory to be mapped with all of this.

PV

Round two isn’t even over. How short sighted can you get? The game was “over” for all MS competitors a dozen years ago. Now there is a revived Mac, an assorted array of unix varieties and an emerging Android. The PC is 30 years old and we’re just entering round 4. This is a major prize fight where the rounds won’t end till the next major communications revolution arrives. Could that be telepathy? I’m already weary of voice dialing.

Constable Odo

RIM still owns the enterprise at the moment and the iPhone won’t be used in any banking or legal corporation.  They claim that the iPhone can’t be locked down as securely because Apple isn’t giving them the APIs necessary to design ultra-secure apps.  And there’s still the matter of managing and distributing apps for tens of thousands of iPhones at a time.  Sorry, but the iPhone is still weak in that area.  Every corporation in America does not want to be tied to AT&T and neither do consumers.  Apple’s iPhone is doing extremely well for the short time it’s been around, but it still has it’s drawbacks.  Apple still needs to do more work on the SDK for large-scale enterprise businesses.

From the consumer standpoint, Apple is going to murder the rest of the mid-range smartphone industry with a $99 iPhone.  Apple should start holding iPhone seminars for owners.  Nobody has ever done that before.  Show people all the finer points of getting the most out of their iPhone.  The rest of the smartphone industry is such a mish-mash of unrelated hardware and software.  The iPhone will have the same OS from the $99 iPhone to the $399 iPhone.

Rumors have cropped up about there definitely being a ChiPhone to go on sale in July that can run on all of China’s carriers, but this sounds almost too good to be true.  If it is true, though, iPhone sales may just skyrocket over the summer.  We’ll see.  So, the iPhone is steadily gaining market share which is good, but Apple’s mobile platform probably won’t pull away from the field until 4G arrives.  Then it may be game over for competitors in 2011.

davebarnes

Same ads in the Sunday New York Times. Every week. Week after week.
No Crackberry adverts.
No Presumptuous adverts.
No Nokia adverts.

aardman

The enterprise smart phone market will eventually be dwarfed by the consumer segment.  Just like when cell phones first came out only corporate users could justify their cost.  Now, consumer cell phones vastly outnumber all enterprise mobile phones, smart and dumb combined. 

Steve Jobs is focusing on consumer smart phones because that’s where the puck is going to be.  RIM is probably not going to die but given their focus on enterprises, they are driving down the dead-end fork of the smart phone road map.  The ceiling on that market is way lower than for the consumer segment.  That is why Apple is not getting into a street fight with RIM over the enterprise market.

mrmwebmax

+

InfoWorld recently ran an article stating that Blackberry is now the Lotus Notes of smartphones:

http://www.infoworld.com/d/mobilize/deathmatch-blackberry-versus-iphone-509

Definitely worth a read. Also, I predict that if Apple can ever get the iPhone on Verizon, their US market share will explode. I know many people who won’t get an iPhone because they won’t leave Verizon. (I was one, but am now a happy iPhone user who’s also pleased with AT&T.)

Mark

Meanwhile back in reality the iPhone continues to do poorly in Asian markets and compete on a level field in Europe.

Silly article is silly.

John Martellaro

I mentioned the Infoworld article, about the BlackBerry being the Lotus Notes of smartphones, in my blog, Particle Debris, last Friday!

zewazir

The one thing correct in this analysis is talk of iPhone “killers” has pretty much gone away. Competitors have pretty much accepted the fact that iPhone will always have its market share, and because iPhone comes from Apple, it will pretty much always be pushing the envelope, causing others to spend their efforts playing catch-up rather than forcing Apple to play catch up.

This does not mean iPhone is some kind of overall threat to very existence of its competitors - as long as they reasonably play the catch-up game.  iPhone will probably continue for a while to increase its overall market share and then it will level out.  But as long as they are tied to a single carrier, that share will be limited, not only by consumer choice which may prefer one carrier over another, but also by anti-trust laws which will not allow such combinations to gain an unfair market advantage.

cb50dc

Those whom the Gods would destroy they first make proud.  While I agree that Apple?s iPhone has the advantages recited in the article, it must not fall into the fatal traps of hubris and complacency.

Thanks for the sanity. Your GM example hits it clearly. As a Machead for well over 20 years, of course I hope Apple keeps on growing. I believe they’ve begun establishing a strategy and product line that will make that happen. But it hasn’t been that long since I occasionally had to ask myself, “OK, if by this time next year, my PowerBook has no parent company for support, how will I go about starting to (choke) learn (gasp, urgh) Windows?”

As you say, let’s keep the focus on doing the job right and keeping it fun.

cb

Mucha Macha

you know, often these sorts of opinion articles are cheesy and hyper-speculative.  but you know something?  this writer is really on to something, and this article is very logical.  thanks!  chalk up one more reader who agrees with you whole-heartedly!

JulesLt

What strikes me is the synergy between the applications and the platform ? i.e. selling apps makes money for Apple, which means they invest in advertising applications (in fact most iPhone advertising is now focused on apps) which in turn advertise the phone (which they also profit on).

That same end to end synergy doesn?t exist on Android, in that Google have an interest in presenting an open cross-device app store (which makes them money), but the hardware manufacturers have more of an interest in what differentiates their phones.

(Essentially, Google are more like Microsoft in this ? they want lots of vendors competing to undercut each other to deliver Google?s software to end users).

But to clarify my rambling point, I suspect this means that it?s going to be harder to establish the notion of Android as a platform with consumers, because there are lots of different parties with different interests.aa

As for European iPhone sales ? my experience is that a lot of people over here (a) have a lot of attachment to Nokia (b) don?t really know the iPhone/iPod is significantly different to Symbian phones ? even amongst techie types (who continue to focus on hardware features like camera megapixels rather than software ones).  The question is whether Apple can establish the iPhone enough while they have a real technical lead, or whether Nokia can keep them down long enough for the results of their Trolltech/Qt project to come to fruition.

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