Business Week and Michael Arrington are Wrong
Business Week and Michael Arrington have both predicted that any company competing in the smart phone market is in a lot of trouble this coming year. With the latest version of the iPhone coming out in July, both BW and Arrington think that Apple will dominate the space like they dominate the MP3 player industry with the iPod. I expect this from Business Week, whose analysis of the situation is based on Apple’s previous ability to come out with a revolutionary device and dominate the market. But I expect more foresight from Michael Arrington.
In the short term, yes, Apple will sell lots of iPhones. And yes, I will (eventually) be one of those buyers. But both BW and Arrington are missing the bigger picture. Apple’ s significant achievement with the iPhone is the standards of services that users will expect from their smart phones. People want to organize their voicemail the way they see fit. People want to be able to install applications that others create for free. People want an easy way to see the web the way it was meant to be seen. These are all standards that other companies will adopt. With Google Android’s entrance into the marketplace, we’re going to see a lot of competitors to the iPhone in the next few years. All of which will provide those same high level of standards.
So let’s look 5 years down the line. Here are the potential options for businesses thinking about implementing a new smart phone service for all their employees:
Option A: Apple iPhone
Pros: It’s SO cool. The UI is gorgeous! I’ll be the cool one on the block. Web pages look great and the lack of keyboard is only annoying if I email a lot.
Cons: No QWERTY keyboard. It’s not focused solely on business.
Option B: RIM Blackberry
Pros: Device made just for business. Possibly cheaper than iPhone. Already have existing relationship with company. It’s got a QWERTY keyboard!
Cons: Not as cool as the iPhone. Web pages are viewed in mobile format.
Option C: Handset device with Google Android installed
Pros: Open system that allows companies to install company-related apps easily. Has many options for handsets depending on the user’s preference. Users can easily view web pages. Because of the many handset options, probably cheaper than the iPhone and Blackberry.
Cons: Handset and OS is coming from different companies. Not sure about others, but there will be a bunch.
With all these options, I think most businesses will go with B or C. The iPhone will be huge with consumers but Apple is going to have A LOT of competition in the business sector.
I was looking forward to the new iPhone as a possible replacement for my aging Blackberry 8700. So I tried typing an email on my co-worker’s iPhone. It’s a nightmare…you have to watch carefully where your fingers are going, and even then it’s all too easy to make mistakes. The built-in auto-correct system makes things marginally better, but it cemented my decision – if you are serious about composing emails on your PDA, a touch-screen is not the way to go. With the new Blackberry Bold coming out with plenty of multimedia features for the long plane ride, I see little reason to consider the new iPhone for business.
You’re right – the iPhone won’t make a tremendous dent in the business sector, but that’s probably not the market segment they were aiming for anyway.
At its heart, the iPhone is an entertainment device. Its touch screen was a matter of necessity, not coolness. It was designed to allow for movie watching and full-screen websurfing in a compact handset. Very few businesses are going to pony up the cash for you to store 16GB of Dave Matthews mumbling incoherently.
To that extent it makes perfect sense for Apple to be a looming threat in the mobile device market, although I’d consider them to be a much bigger threat to Motorola and Nokia than I would to RIM.
That said, lots of people I know have BlackBerries or because they like being able to e-mail/surf the web/call people from one device; not because their place of employment shackled them with one. It is THOSE people that Apple is almost guaranteed to capture. While typing on the touchscreen keyboard is painful (for me), I am told it is easy to get used to and for many people the predictive text and auto-correct system allows them to type faster than on typical handheld keyboards.
Barry, I think lots of people would agree with you. Apple fanboys are having too much sway in these market share predictions.
Cobas, I agree with you regarding the consumer mobile device market. But the impact, I believe, will be much greater in the US than internationally. With the dominance of Nokia outside the US, Apple will have a harder time making inroads into those markets.
Also, I didn’t even mention in the post about the lack of carrier choices. Once the iPhone can be used on all carriers, than we might see some significant market share for Apple outside the US. Until then, the iPhone’s impact will mainly be in the luxury phone consumer market in the US. Significant, yes. As big of a deal as everyone is making it, no.
Ha ha. What a funny blog. I can hardly wait to send it back to you in a year to remind you how wrong your predictions were. See you in 2009!
Ely- when you predict the iPhone making less of a dent in marketshare abroad are you taking into consideration that the units will be subsidized at a much higher rate overseas than they are here? I think they will be free in Spain when you sign up for a new contract and a pound in England (although you have to sign an 18 month contract in the UK which is practically unheard of there).
Kate – It’s a good point. But that only enhances the consumer market. Business pricing may be very different. These cheaper rates, of which I wasn’t aware were finalized, do help the iPhone a lot. My point, I think, still stands. Consumer market – Apple is going to be a monster in the next couple years. Business market – Apple will be a player, but won’t come close to RIM’s market share.