∞ Wilcox says the iPhone will lose smartphone war; I don't think so

I read with some interest and amazement, an article by Joe Wilcox at Betanews last night predicting that the iPhone will lose the smartphone war. iPhone 3GSWilcox compares the iPhone to the Mac versus PC battles of the late 1990s, saying the iPhone is destined for a similar fate — meaning that its market share will drop. Personally I don’t see that happening.

A lot of things have changed over the last 15 years that make the iPhone nothing like the battles of the past. Apple is not the same company and neither are its competitors.

Apple released the iPod and people claimed that Microsoft, Dell and others would walk all over Apple when they released competing products. That worked out well for them, didn’t it?

Apple was the first successful downloadable music store in the world. Everyone from MTV to Napster has tried to take market share away from iTunes, but it continued to grow to the point where it passed Wal-Mart as the largest music retailer.

And then you have the iPhone. Apple literally changed the market. It changed the way consumers and companies look at smartphones, how they should work, how you can interact with them and the things you can do with them.

The iPhone is a PDA, phone, music player, video player, Internet device and it is more sophisticated in each one of those tasks than anything the competition has to offer today.

That is the key word, “today.” The competition hasn’t been able to properly copy what Apple has right now, so how do they expect to be able to surpass what they have planned for the future.

The next version of the iPhone is already well underway and it will have cooler features than the existing models.

Apple created a platform, not just a piece of hardware that uses the same old software. That’s a huge distinction.

If you want a parallel, try this. Apple had the most successful music player on the market with the iPod mini. Any other company executive would have given their right arm to have that device. What did Apple do? It dumped it.

Apple stopped making its top-selling iPod and introduced the iPod nano in its place. Just when the competitors thought they had Apple in their sights, Apple completely changed the game.

That’s the type of battle Apple is fighting in the smartphone market. Apple is not trying to outsell Nokia, Microsoft or anyone else. Not yet anyway.

Apple will outclass them all.

Apple has the ability to deliver that wow factor that nobody else can. Will the world’s press show up if Michael Dell introduces a smartphone? Probably not. Who really cares?

After all of that, we still haven’t touched on the applications.

Wilcox says the number of applications available for the iPhone can’t be considered its measure of success. However, that’s the same measure of success that Windows users have been using as its measure of success for years.

The App Store has its good and bad points. John Gruber summed up my thoughts in a post on Daring Fireball last night. To sum up — quality over quantity.

There are a lot of worthy competitors in the mobile space right now and it’s going to make things interesting for the next few years. When it comes right down to it, I expect Apple will innovate in that market the same way as it has done in other markets it enters.

That may not be good news for its competitors, but it sure will be good news for consumers.



  • Synthmeister

    I agree, things are completely different. As you point out, Apple has built an entire ecosystem around the iPhone that started 8 years ago with the iPod and then iTunes. The other guys have simply tried to lock in customers with proprietary hardware or software, while Apple has put an incredibly efficient development, delivery and and marketing platform in place. Also, Google cannot be compared to MS. MS allowed hardware variety to explode–while the OEMs slit each other’s wrists with lower and lower margins–but kept an iron grip on the OS. Google is allowing the OEMs to do whatever they want to the OS which will result in a very fragmented market for apps and peripherals, not to mention user experience.

  • P G

    “..they had Apple in their sites,…”.

    You mean “..they had Apple in their SIGHT,”.

    • Jim Dalrymple

      Thanks, fixed.

  • http://www.debono.com.au Joseph Debono

    Hmmm…

    “There are a lot of worthy competitors…”

    Should be…

    “There is a lot of worthy competitors…”

    Sorry Jim, the pedant teacher in me took over and made me write this!

    • Jim Dalrymple

      I always appreciate feedback.

    • Seth Milliken

      Nothing like incorrect pedantry. In “There are a lot of competitors,” the noun that the verb agrees with is “competitors” not “lot”. Would you say, “a lot of animals was in my back yard”?

      • jean-paul

        Quote: ‘Would you say, “a lot of animals was in my back yard”?’ Well, you could! It all boils down to what you want to mean to say. The real subject (the topic) may be the first noun or the second noun, and if they differ in form (singular vs. plural), well, the verb follows. Now hold on to your mobiles, this is way-out stretched, but suppose you are a breeder who supplies pedigree dogs to pet shops, and your new batch of puppies just left for delivery—and you could say “a lot of animals was in my back yard”. Before anybody thinks i am one french fry out of a happy meal, it was to illustrate that the verb form is context-dependent. Now, i agree that “a lot of competitors was in my backyard” does not work (except if you breed them for delivery of course), but perhaps “There is a lot of competitors” does not sound so weird, especially if the focus of what you state is on the quantitative (a LOT) more than on the qualitative (COMPETITORS). But what do i know, English is not even my first language! Sorry Jim Dalrymple if i hijacked your great iPhone article with a pedantic comment on grammar, i should add that i found your analysis brilliant and spot-on.

        • jean-paul

          “what you want to mean to say”? WTF?! i meant “what you mean” (or something like that).

      • http://www.debono.com.au Joseph Debono

        Yes sir, “There is A lot of animals in my back yard” is correct. There is only ONE lot.

        I know it sounds wrong due to errant common usage but that’s our wonderful English language.

        • http://www.drinkingfromthefirehydrant.com/ Jim Nicholson

          Verb-number agreement applies to the subject. “A lot of” is an adjective phrase. The subject is “animals.” Similarly, “a lot of worthy competitors” consists of an adjective “a lot of worth” that modifies a plural noun “competitors.” The verb “to be” matches the subject noun in number. You wouldn’t say “There is worthy competitors,” because it would both sound and be wrong, just like you would not say “There is a lot of off-topic comments on this article.”

  • mark

    Some other key changes since the 1990s:

    1. Apple has a better supply chain than anyone (except maybe Nokia). It will have larger margins than any of its competitors selling a product at the same price. (Though Apple will still avoid the low-end, not because of margin but because of brand.)

    2. At least in the US and UK, Apple has a chain of retail stores that provide better customer, warranty, and repair service than any carrier or retailer of smartphones. Apple has direct contact with a significant portion of its customer base.

  • GQB

    Actually, its ‘sights’… as in ‘gun sights’.

  • http://www.allaboutiphone.net Matt Radford

    “The iPhone is a PDA, phone, music player, video player, Internet device and it is more sophisticated in each one of those tasks than anything the competition has to offer today.”

    I agree, but with the exception of the phone part. Look at a Nokia S40 or S60 device: there are plenty of options that help the user that the iPhone just doesn’t have. For example, an S60 phone will continue to dial a number if you get a busy tone, until a connection is made. On the iPhone you have to keep on pressing “Call Back”.

    Also, S60 phones allow the setting of default numbers for text messages, so that I don’t have to choose a number for a contact each time. Why does my iPhone still suggest that I would want to send a text to a landline? I should be able to set one number for text messages for a contact.

    Moreover, connectivity is an issue. I’ve used many phones that provide a far better mobile signal than my iPhone. Apple needs to improve their baseband software.

    However, none of the above matters to the vast majority of users. The increased potential functionality of the Nokia phone is irrelevant to users such as my mother-in-law; she compares using her Nokia 6220c S60 phone to wading through treacle every single time. Concerns over baseband (what?) are nowhere near her radar. The large, simplified buttons of the iPhone interface, which tell her things in plain English, are immensely appealing. Couple that with an iPhone that’s going to be increasingly affordable, and my days of fixing her unfathomable Nokia phone will soon be at an end.

    • SteveS

      Jim,

        Nice article.  I agree with your position completely.  Joe Wilcox is a tool.  He's a long time Windows shill that has always been critical of Apple.  The iPhone has momentum that no other manufacturer has.  It inherits the iPod ecosystem of third party devices like speakers, car integration, etc.  Developers have flocked to this device.  This is where the action is at.  Going forward, only the iPhone and Android will experience any significant growth.  There are various reasons why I make that claim that could probably fill up a blog post in and of itself, so I'll save that for another day.
      

      @Matt Radford, The S60 “features” you mention are more than trivial. None of these features would make a buying decision in favor of Nokia over an iPhone. Your comments are akin to choosing a Kia over a BMW because the Kia has better cup holders, etc. Yes, I know, car analogies are never perfect, but you get the point. In practice, this isn’t an issue, because people typically text the same few people they know. On the iPhone, you just go to messages and resume a previous conversation. There’s no guessing at phone numbers involved.

  • Hamranhansenhansen

    You don’t even have to know the issues to see Joe Wilcox working way too hard to try and make his point. If he was right, the essay would be half the length and would make much more sense.

    Why go back to the Mac introduction in 1984 when you have the iPod from 2001 to compare to the iPhone? Why ignore the ways in which iPhone has already been marketed very differently from the Mac?

    After 8 years, iPod has 75% market share and survived numerous “iPod killers”, including the PlaysForSure software platform from Microsoft, which never got above about 2% market share. After 2.5 years, iPhone has 30% market share and survived numerous “iPhone killers”, including the Windows Mobile (4%) and Android (1.8%) software platforms from Microsoft and Google.

    The Mac was never cheaper at retail than the PC, but the $99 iPhone 3G 8GB with unlimited data is cheaper than the $199 Verizon Droid 6GB with 5GB data cap in every way. It’s cheaper to buy, cheaper monthly costs, and the great selection of apps may enable you to pass on buying additional devices like a dedicated game device, saving even more money. That is what is being ignored by the tech press. iPhone is not just the best smartphone, it is also the cheapest. They are saying “Android is good enough for most people” like that means people who don’t want to shell out for iPhone will just buy Android like it’s a “PC”, but Android is more expensive. It’s the iPhone that is the “good enough” choice.

    The real comparison between iPhone marketing and Mac marketing is to imagine if the Mac of 1986-1996 had always had a model that was equivalent to the $99 iPhone: cheaper than a PC, but still with many more features and much easier to use. It would have made dramatic gains in market share. That is the way you compare today’s iPhone to the 1980′s Mac. You say, “imagine if the Mac had been done right like iPod and iPhone were done during this decade.”

    I personally think the iPhone is the iPod all over again. I would not be surprised to see 75% market share for iPhone within a couple of years. They have not even really done a second model yet. All 3 iPhones so far are a variation on the first. They still have larger screens to explore, they could still do a miniature version.

    The tech press is also ignoring the fact that Apple does not manufacture its hardware, they just design it and then FoxConn and others build it. This has all the advantages of “licensing the OS” without any of the disadvantages. Microsoft sends software to Dell, who then bolt it onto whatever box they’ve put together, which takes a lot of time and results in low quality, but Apple sends the entire plans for an iPhone to FoxConn, who only have to make that exact device, no fooling around at all. If Apple needs to add 10 more hardware partners in order to make 90% of the world’s smartphones, it is entirely possible for them to do that. They don’t have to license the iPhone OS in order to get hardware partners, they are already licensing the entire iPhone to their hardware partners, to build as-designed.

  • Foris

    You have to question the insight of someone like Joe Wilcox who is still only able to see the future through the prism of the PC/Mac wars of the late 90s.

  • Andre Richards

    Another consideration: Apple is the only competitor in the field with expertise and infrastructure in place for everything a modern smart phone needs. They are the only company in this sphere that has operating systems expertise, software expertise, hardware expertise, excellent design aesthetics, pipes for delivering content, deals for delivering content, intuitive storefront systems for buying content (music, movies, apps, etc.), an intimate understanding of the developer culture, and, not the least, actual stores where customers can go in and deal with a real human being.

    No other competitor has all that lined up. None of them. And those who do have some of those things on their side underperform in comparison to Apple.

    Wilcox is focusing on such a tiny part of a much bigger picture. He missing the forest for the trees, so to speak.

    I see the mobile phone market in next 5-6 years being a slaughterhouse. We’re going to see some industry giants fall or be pushed to the wayside.

  • http://www.cyclelogicpress.com Partners in Grime

    Joe is stuck in a time warp circa 1980.

  • auramac

    Once again, Wilcox sees what he wants to see. He wants to see Apple fail.

  • http://www.van-garde.com Daniel Swanson

    Apple has the extreme advantage now of being able to see the various fits and starts popping up and then being able to either counter them or notice their lack of traction so as to better determine Apple’s next moves.

    They have plenty of cash to develop and/or modify plans.

    If the tablet is real, that should also prove quite interesting to see not only how it performs itself, but how it further rounds out the Apple ecosystem.

    Especially while Steve is alive and healthy and in control, the show will go on in very new and interesting ways.

  • nd

    There is one point that I haven’t seen yet in this discussion: Apple has succeeded in bypassing the carriers. Think of those branded phones that – although the same phone – look quite different depending on which carrier sold them. And that are crippled because that particular carrier doesn’t like some features.

    The iPhone changed the game – iPhone homescreens look the same all over the world. The app-store is there and run by Apple, not by some carrier.

    Granted, it’s not black-and-white there (see tethering-restrictions, see Google Voice not being in the app-store). But I think that Android phones will differ quite a lot between carriers. As a result, the market of iPhone competitors may be much more segmented and more difficult to serve for third parties.

  • http://www.van-garde.com Daniel Swanson

    An additional point on the word “ecosystem.” Wilcox bandies it about way too often and too loosely in his article with reference to the competition’s various offerings.

    Wikipedia definition: “An ecosystem is a system of interdependent organisms which share the same habitat, in an area functioning together with all of the physical (abiotic) factors of the environment.”

    Obviously used figuratively in this discussion’s context, Apple’s particular ecosystem is far more comprehensive, even if the competition’s are considered to qualify as “ecosystems” in comparison.

    Though the press gives occasional passing nods to the so-called “halo effects” the iPod and iPhone have had on sales of other Apple products, I think those effects continue to be quite significant, especially as facilitated by Apple’s online and retail stores.

    Apple’s ecosystem is the ne plus ultra of ecosystems, and few if any competitor will be able to best, much less meet, that accomplishment.

    All Apple has to do is to continue doing all the stuff it’s been doing right and not let anything important drop out.

  • http://zzmogh.be/onlijncreatiefzijn Hannesdh

    What about Flash? If they don’t start supporting it soon, i’ll buy a HTC!

  • George Cuevas

    While most people discuss the future of smart phones, I consider the iPhone to be in a totally different class… it’s a “super smart” phone. A brilliant design that has forced us to reconsider the many uses of a small pocket device.

    While cell companies are still trying to convince us that their network is the biggest or most reliable, Apple has proved that the iPhone is the most useful personal computer that you can use to make a call on.

  • Rick

    Sorry to move away again from commentary on the substance of the article, but I’m slightly worried to see you writing in a one-sentence-a-paragraph style. It reminds me a bit of Mac360. Am I right in thinking you wouldn’t do this when writing for print?

    Because that would really be worrying.

    Know what i mean?

    ’nuff said.

  • Fring

    Thanks for the good read, Jim

    Some observations on the comments posted:

    Funny how our cousins across the pond are so much more prescriptive about the rules for written and spoken English. Grammar is not the be-all end-all it used to be over here in the UK. Pedants bemoan the fact, but realistically, the English language is successful because it ‘can’ and ‘does’ lend itself to endless manipulation and new interpretation, including new words, sentence structure and bizarre pronunciation. Hence the shortened phonetic style of texting and the sound byte, character limited Twitter posts. It’s called progress folks and @Rick – would you rather have one continuous column of fleshed-out items that say much the same thing ‘a la’ newspaper type layout or an easy to read piece that does more with bullet point style, layout?

  • Joe

    Wow, that is a great article with another point of view. I think Apple did introduce the PDA/Smartphone to the masses and it is a very innovative device. I think that other manufacturers have to catch up in order to compete.

    I am a Windows Mobile user, and i have been disappointed in its developments, i so i am hoping Windows Mobile 7 will be a home-run for them.

    Microsoft does need to find something innovative to compete with Apple and i think they could overtake iPhone b/c of the fact that they have many partners around the globe. I think MS needs to look at Android first b/c they are made from multiple manufacturers like Windows Mobile are made of many manufacturers.

    I think WinMo does offer a very robust ecosystem and i think with the introduction of Windows 7, MS did make the integration even closer. They miss the mark by not integrating their XBox Live and Zune platforms, or at least tightly enough. For MS, it isn’t just the smartphone market, but it is the entire tech industry. Thats why i think they can overtake Apple and Google. The ecosystem is a lot larger and more robust than i think people give them credit for.

  • http://www.debono.com.au Joseph Debono

    Yes you would say “There is a lot of off-topic comments on this article.”

    Again, only ONE LOT so it’s THERE IS, plain and simple.

    If you want to say ARE it’s “There ARE LOTS of…”

    • http://www.debono.com.au Joseph Debono

      Sorry guys, this was meant to be a reply to a reply above but it ended up down here, very confusing.

  • http://www.jetcitydevices.com Matt McCormick

    There’s one very major point that’s missing from this discussion and that is that AT&T sucks. I have an iPhone and I love it – everything except the phone part of it. I live in Chicago and have to run on the Edge network because AT&T can’t keep my 3G running (every afternoon when the main commute starts my phone stops receiving calls if I’m on 3G).

    The iPhone is the best phone on the market and will continue to be. But if they don’t quickly get on to a few other networks, they will end up losing to Google or Microsoft for the same reason Apple lost to Microsoft in the late 80′s / early 90′s: They were an exclusive and expensive piece of hardware.

    It was Microsoft’s decision to allow all kinds of different hardware manufacturers to compete that caused the price of the MS PC to plummet and it worked almost as well as an Apple and that was good enough for most people, so they migrated in droves to Microsoft.

    If MS or Google can get a mobile OS out there that is even 80% of the iPhone and it runs on every hardware platform and every carrier…well, prices will plummet and the iPhone will lose out again.

    For Apple to not have a repeat of the 90′s, it doesn’t need to have it’s OS on other hardware, but it definitely has to be available on other carriers. If it can’t do this within the next 2-3 years, they will be in trouble.

  • Torstein A.

    Some people are stuck in the past, always trying to shoehorn Apple’s modus operandi into the same Old Mac Company that was beleaguered in the 90s. Jobs made it clear some years back that this is not the Same Old Mac Company. He made it clear, albeit in a symbolic way, by dropping the name ‘Apple Computer’ and renaming the company to just Apple. Apple is no longer just a computer company. It has really broadened its horizons by throwing off the limits and shackles of “just a computer company”. Apple has redefined itself, and has survived in doing so.

  • http://www.r4-ds-card.ca r4 ds

    I am also don’t’ think so that i-phone is on back sheet in this competition. It all rubbish I -pone will not lose race in smart phones category .