Business Week investigates what the iPhone’s impact is going to be on rival high-end phone makers like RIM, Palm, Nokia, etc. I’ll save you the read – the answer is summed up in the image to the right.
It’s true, Apple only sold 6 million iPhones in its first year, out of a billion or so handsets sold worldwide. But remember that they are currently available in only a couple of countries. And in the U.S., they’ve grabbed a 25+% share of the smart phone market. And that was with a slow, no-GPS, expensive device (here’s our side-by-side comparison of the iPhone v. the RIM Blackberry 8820 from a year ago).
Imagine the havoc they will wreak with the twice-as-fast, half-as-expensive, GPS-enabled, Exchange-supported 3G iPhone that they’ll unleash on 22 countries this year.
In short, it must be really unpleasant to be in this business and not be Apple right now.
Yeah, I’ll probably cave too, once they’re officially available in Belgium.
I wonder if you ever go back and check the success rate of your predictions?
I think this is one you will have to revise.
Isn’t it so that Nokia (for example), every single week, sells more phones that Apple has sold in their entire lifetime?
I more see the iPhone as a godsend driver for innovation in those other companies you mention. If you think they are just sitting back enjoying the view I think you’re under estimating them.
I agree.
That huge “sucking sound” that you hear (or will shortly) is developers leaving other mobile platforms for Apple.
In my opinion RIM is especially vulnerable though their decline will likely be slower due to the large infrastructure corporations have installed to run their Blackberries (Blackberry Enterprise Servers).
Even with the latest Blackberry Bold I have yet to see a web site show off either HTML email or a better browser.
Note: There is no doubt that html email is coming for the Blackberry, however it requires their server software (either BIS or BES) to operate.
IMHO “the genie is out of the bottle” and most companies now realize that all this middleware (BIS/BES) isn’t necessary to achieve pretty good functionality.
Yeah, yeah the keyboard is tougher to use on the Apple. But that didn’t keep me from ditching my 15+ year use of Blackberry. Surprisingly I don’t regret it one bit. The one thing I miss about the Blackberry ? My password keeper software. Everything else has been easily replaced by the iPhone.
Mmm, I can’t wait for official support over here in Australia either
It’s worth remembering that Nokia makes most of its money with low-end phones. It’s also worth remembering that the US is a very bad market for Nokia in any case. Most people in Europe that have smart phones are tied in to two year contracts and by the end of those, Nokia will have a direct iphone competitor. The rumours around here (Finland) are the fourth quarter, latest first quarter 2009.
A Nokia phone would be likely to have several advantages over the iphone, including openness, price, tactile feedback on the touch pad and a better camera. It’s also likely that in typical Nokia fashion there’ll be a few different models to choose from.
Apple may do a lot of damage – Nokia are late to the party – but I wouldn’t count them out just yet.
Flemming – yep, nokia sold hundreds of millions of phones last year. But they are mostly very low end devices. I included them above (I should have included HTC too, and others) because they are selling high end smart phones, too. And Apple’s going to eat their lunch in that space.
I still believe in Microsoft Windows Mobile as a platform. I teach people how to use it.
However, iPhone is awesome. I teach people how to use that as well.
The real target here will be RIM. They are faced with Exchange-aware phones from Microsoft and Exchange-aware phones from Apple. That basically eliminates RIM that used to have its USP as instant messaging integrated with Exchange.
It’s an Apple world…
I love the idea that they can make futuristic products relevant and not alienate consumers in adapting the learning curves…
Apple = Brilliant Marketing For High-End Innovative Products
Best,
Darren Lee
Maybe, but for example 91% of japanese mobile users do not care about iPhone, becasue it lacks many options (copy/paste, MMS, etc.).
Yes it has the potential to do for phones what the iPod did to the MP3 player market.
I also think it could be the game changing device for new mobile social networks, which I posted about today. This will further bolster its market share.
I can’t wait to get hold of one.
After living in both the US and in Europe I’ll state that the network effect of iPhone is stronger in the US than in Europe. I don’t have any data on this though, but I don’t think you’ll find products spreading as fast across Europe as in the U.S. Different regulations, different culture, different languages, different operators throughout Europe will make it tougher to scale the iPhone in the big E.
And I don’t see any reason why competitors should not be able to eat into the market the iPhone has created, just as easily as the iPhone captured market share from RIM, Nokia, etc.
I agree, iPhone are awesome. much better then nokia.
people like me prefer iPhone then other.
congrats to apple.
iPhone is just so much more cool than any any other phone, user don’t care if it’s 3G or Windows Mobile as long as it’s a super cool gadget it’s a must have!
Bah. Until Apple becomes cell provider agnostic I’ll never buy one because of AT&T. I’ll never get cell service from them.
Whilst the new 3G iPhone is still not ‘completely perfect’, Apple has already built a ‘killer app’ inside its new model that is going to completely revolutionize the smart phone marketplace – The App Store.
Normally you get a high end smart phone and what you see is what you get. But with the amount of new and future Developers Applications that can be downloaded from The App Phone straight to your 3G iPhone, Apple has created the first truly organic mobile phone.
Unless the other Mobile Networks offer a similar type of App Stores for their own range of smart phones, Apple will dominate this marketplace – period.
Plus maybe some of the groans that are still held against the new 3G iPhone, could be developed and downloaded via The App Store.
iPhone 3G will be released in way more than 22 countries this year, if not all 70. 22 is the number of countries that will have iPhone on July 11th.
This is what is (and wil be) happening to Microsoft in general.
http://drylight...ofts-future-and
There is plenty of room for everyone. Why does it have to be that one company should be the only one left whether it is Apple, Nokia, or someone else?. People who don’t spend their days reading tech blogs, don’t care much to switch from their trusty mobile phone just because Apple decided to enter the market themselves with a cool gadget that offer little more than a cool factor and just another way to spend even more money on things that one doesn’t really need.
Another brainwashed Mactard’s rambling.
Nice to see that TechCrunch has been bought off by Apple. Seriously, the iPhone is going to sell big in the consumer market, and only in a certain demographic.
My parents don’t want an iPhone, they want a phone that can make and receive phone calls and that they can understand, I’m sure most people’s parents are the same way. Their kids might want an iPhone but the first phone my parents got me was one of the free ones.
Apple will sell a lot of iPhones, there is no doubt about that, but there will always be other companies that make devices that are just as good (or better depending on your needs).
Arrington is clearly deriving his opinions from the American market.
Take a moment to research how far behind the USA mobile scene is, then you’ll understand why the iPhone did so well in the States, and so “ok” everywhere else.
This is what is (and will be) happening to Microsoft in general: http://drylight...ofts-future-and
Due respect given to Apple for the iPhone.. but I doubt all the other phone producers will tumble over. Like #2 said, Nokia sells these numbers monthly. Low-end or not, a sold phone is revenue. Revenue is what will keep them going in the race to produce iPhonish type phones.
If your wanting to say that Apple boomed in the market: very very true.
I might be slightly biased because I’m a HTC Kaiser (TyTN II) user/owner and quite happy with the phone. The iPhone innovates, but the iPhone isn’t the only phone that can do cool stuff.
I think the effect will be marked by apples approach to not using flash, not using crippled mickey mouse OS’s, symbian/wince and by opening up the market to a broader range of developers with easy access by consumers, appstore. Look what iTunes did for apple in the mp3 player market.
If the apps are built the home and corporate users want and it runs on a stable os then it will give the competition real pause for thought. The competition’s answer will have to be to make themselves look act and feel like apple and this will be hard to do with the currently available mobile os’s.
I dont think Apple iPhone is going to make a dent to Nokia’s share in Asia. United States yes, Europe maybe. India nah!
The reason I passed and bought a htc tytn 2 was because it has a real keyboard and it has a built in modem so I can hook it up to my laptop.
All the time it has been out and I have yet to see one in the wild here in the UK. Perhaps I ain’t looking hard enough, Blackberries yes, iPhones no.
Apple’s strength in the high-end market is the software (platform), not necessarily the hardware. Beside looking awesome, I don’t think that blackberry’s phones look that bad, but they lack the software platform.
That’s where Android could step in. They could provide the necessary piece most hardware vendors are lacking at the moment: A powerful software platform. They can get a huge market share, if they create a solid product (that is better than all the other high-end mobile operating systems out there). They can easily crush Windows Mobile and Palm (as a software platform), and probably Blackberry, too (although their only advantage _is_ their software, so that could be difficult, unless they are pressured by the market).
Apple’s biggest barrier to truly swamping the smart phone market is the restrictions they have on carrier. What Apple needs is to be able to license the product to any carrier, they should also try to pursue an open platform strategy in addition to their open development strategy so far announced for Iphone 2.0. By licensing out the platform (hardware and software) to alternative makers they can offload manufacturing costs of Iphone compatible devices. Remember the Iphone is essentially a tiny little Unix computer running a variant of OS X for desktop Apple machines, everything else is software just like on a desktop accept interfaced to the wider world over the air. The other phone makers started first with a phone concept and built pc functionality into it (phone, music, pictures, text…internet) the IPhone started as a computer (OS X) and added phone support and the strength of Apple in computer software was leveraged to ensure that the UI of the phone is so….well so darned superior to everything else.
I am a hardcore geek, I’ve been using gadgets since I was an adolescent and the Iphone is the first cell phone that I figured out without having to read a manual…this ease of use should not be underestimated. To top it off, using the Iphone browser is next to a holy experience….it’s just the way it is supposed to be…I’d even prefer using the touch, slide and tap paradigm on the desktop…I know there have been touch screens before but now with low profile LCD’s it should be much cheaper to do and should be a standard. (Which Apple could push to standard bodies) Okay I am getting ahead of myself here…but the fact remains…no other cell phone emulates the desk bound web experience like the Iphone and that is a lynch pin to its popularity, with the addition of all types of third party software for the Iphone 2.0 an entire ecosystem will open up…once people are downloading their favorite apps on their phones ..they literally will not be able to see themselves switching to another “platform” in this case another phone. It would be like a dedicated windows user deciding to switch over to a Mac for no reason, big switches like that come with big reasons. The monetary cost for switch over isn’t the same but the cost in terms of having to use a different interface paradigm, buttons and completely different software will be a huge barrier to such switching once the Iphone software ecosystem is built up. Jobs and co. know this and that is exactly why they’ve opened up the system so quickly. I haven’t started any projects yet at my company but I have a feeling it’s going to be fun developing mobile applications for the Iphone.
“TechCrunch does PR for someone other than Microsoft, today — is the world about to end? I’ll save you the read – the answer is summed up in the image to the right.”
amazing journalism….
so apple’s created a great device & will sell lots of it. that kind of a thing happens time to time on all markets. it doesn’t mean all the other companies will suddenly die away.
in “mobile industry terminology”, apple has created a new “dominant design”: the de facto format for a touch screen device. what happens next is that all other players will follow suit with their own versions of it. some of them will be quite direct copies, others will have different kinds of angles to the original.
this new dominant design will eat up market share from the other ones (candybar, clamshell, slide, blackberry, communicator, etc), but it won’t replace them. also, the new form factor will merge into all the other form factors.
the biggest winner in this change: no, not apple, but the user! all others need to up their game in user experience, which is just amazingly great! ok, apple will be the #2 winner.
who are the losers then? …well, a wild guess: maybe we’ll see a swap between two american companies: motorola vanishes from the market & apple eats up it’s market share (not directly from the same customers, though).
Look at sales numbers for other smart phone companies like RIM after the iPhone debut and you’ll see why they (at least for now) don’t despair. In fact, RIM reported record sales growths after iPhone launched, and I’ve seen at least one source attribute that in part to the iPhone driving people into cellphone stores looking for a smartphone device.
And RIM outsold Apple more than 2:1 in the US first quarter this year, according to IDC, and Palm also grew so much from Q4 last year to Q1 this year they are now breathing down Apple’s neck. More importantly they’re all growing significantly in absolute numbers. RIMs earnings in Q3 last year was double Q3 ‘06 – it’s not just their market share that has been growing but the smart phone market as a whole.
Some mentioned the MP3 player marked, but that market too was nearly non-existant before the ipod, and now has a huge number of players even though Apple dominates – overall the ipod made portable music players enough of a “must have” that it was like a gift package to other manufacturers even though they were suddenly facing competition.
I’m still ambivalent about the iphone. The few times I’ve tried one it’s seemed unintuitive to me, and I find I can send messages faster with a normal cellphone with predictive text than with the iphone on screen keyboard when counting the number of corrections I need to make on an iphone (what I get for having large hands, I guess) – and more importantly I can easily text with one hand with my cellphone, while that seems even more troublesome with the iphone.
And what would it give me? Internet access? The screen is too small, and I’m rarely more than half an hour without access to a laptop – I’d rather get an EEE and carry it in my backback etc. for those few times it’s of interest to me. ipod functionality? Sure, but the battery life needs to improve dramatically – I often go a week or even two without charging my phone, and I need to charge my ipod more often than that. I don’t care if my ipod runs out of battery – I do care if I’m without a cellphone. Especially when travelling it matters. Even more so if I were to actually make use of the video capabilities and drain the battery even quicker.
So I’d pay more for a phone with inferior battery lifetime, ipod functionality that’s met by my Nano (together with my phone, they weight / size still beats the iphone) and the lack of separation.
Despite that I’m sure the iphone will be tremendously successfull with some market segments (just not with people like me that care about a small set of core features more than having a “sexy” phone). I’m also sure that while RIM, Palm etc. eventually may lose market share, they’re likely to profit immensely from increased visibility vs. “normal” cellphones as Apple drive more people to consider smartphones sexy or even just to curiosity.
Surely impact will be huge but not cataclysmic.
Rajeev Vashisht
http://tekno-wo...ld.blogspot.com
RIMM apparently saw the device threat and VZW apparently saw the “exclusivity” threat (do a search for ‘Blackberry Thunder’), but apparently neither have yet seen the real threat. If RIMM doesn’t do a FAR better job supporting 3rd party applications by making Blackberry far easier for which to develop, and VZW doesn’t stop locking out hardware features of the devices they offer, they BOTH have much to fear from the APPL/T juggernaut launching at them in July.
What should be interesting about the recent announcement is the pull back from revenue sharing with AT&T AND how this will affect the iPhone in China. There was no rollout of v.1 iPhone in China as revenue sharing was simply off the table as far as the Chinese wireless carriers were concerned. Now that it is not an issue in the US, could we soon be seeing an iPhone partner in the largest mobile phone market in the world?
The new iPhone is not less expansive. It does cost the user $150 more for two years, but let’s not be picky, right?
@Sean Agreed on the AT&T issue. Plus, even though it might be easier to change your provider, the fact that one’s family and friends might be on Verizon might keep a lot of casual consumers from switching. I won’t consider an iPhone until Apple is Provider-neutral, and even then, I would worry about providers like Verizon keeping the system closed–after all, why let people download apps they want when you can charge them for poor imitations from your service? There’s lots to like about the iPhone, esp now with 3G, but there are limits to what casual consumers will do to pursue it.
Once Nokia/Samsung gets the MultiTouch and MobileSafari RIGHT, Apple may feel the innovation pinch. But I sincerely feel that, by the time others reach there, Apple would have scaled new heights.
RIM is the true target here. Apple is obviously aiming to disrupt RIM for so long untouched market and place in business. RIM has adjusted well (thunder-bold) but it may not be enough now. before everyone in business and also in the medical and government had either a RIM device or a palm device. after the failure of palm (in the biz -serious sector) doctors started to use Blackberrys and so did governments . what a coincidence that at the keynote Apple let Doctor apps to be demoed along the news of full Biz support ( Microsoft with active sync and exchange and cisco vpn).
Well. it is not a coincidence. RIM best earnings are packaged sets that are sold to Medical, Government, Enterprise and Corporation outlets because they sell and manage those directly.
and what apple aimed at?.. exactly.
In the case of WM. i am not worried at all. the windows ecosystem integration will allow it to endure and thrive along with 6.1 as everyone waits for WM7. so the worry should be at RIM and Non WM Smartphones.
Only available in a couple of countries. This is pure non-sense. I live in Bangkok, Thailand. There is one floor alone (that has about 800 phone shops, all of which sell iPhons) in one of in just many malls which sell jail broken phones. iPhones are everywhere on the street now. And guess what, we don’t have to subscribe to some crazy telco pre paid plan to buy or use one. Sure the phones are expensive. The distribution channel to get millions of these phones placed world wide has to make money some how as well… and they do. The U.S. is not the only place that people use iPhones. They are available everywhere now.
Mike, you know that the article you link to shows Apple’s market share in the US falling to 19%, not going up to “25%+”?
Well I think the rivals aren’t haven’t enoght juice to compete in this time with IPhone and other ideas that Apple is putting in the market… I don’t own a IPhone, but I saw what it is campable and I’m sure, soon I’ll have one insted a Blackberry… so… I think they know what is going on… and I think they are waiting the Apple’s next move and may be, to make it’s own.
Android. Android. Android.
@36: true, but the 3G also has…3G out of the box, and GPS, better voice quality, and it is ’second generation’ (with all that entails). we can say ‘the take home price is lower’.
Just came off a five U.S. cities/six airports in six days biz trip. I saw exactly ONE iPhone in the hands of a biz person. ALMOST EVERYONE else had a Blackberry. I don’t think the new gen iPhone is enough to change that. Talk to Blackberry owners. The’re happy with the devices. Yes, some moan about phone, but the fact that they carry an extra device shows you just how important e-mail is. And everyone I’ve talked to prefers e-mailing on B’berry keys over iPhone touch screen. This is not the mp3 player market and B’berry is not Creative.
One thing to note about RIM vs Apple: SOX
RIM’s encrypted secure hardware wins out over Apple (and pretty much everyone else) as soon as any regulatory body gets involved.
In Germany, a market of 80M, only 70k iPhones were sold in the last 8 months.
Hardly earth-shattering.
Wow – A rush to push other device manufacturers under a mushroom cloud and into oblivion. That prediction seems amateurish even by your standards. Sorry, but I don’t believe that such an extreme situation can happen. Other device manufacturers will copy the iPhone features, manufacture at a lower cost and sell at lower margins, offer higher incentives and use all other available means to edge out the iPhone.
Yes the 3G faster experience, and the neat web browsing capability give the iPhone an edge currently. But imagine the effect that it may indirectly have on carriers if all the users started buying into the unlimited data plans and there was a heavy data usage. What if carriers started to introduce stepped data plans with higher costs for higher usage to curb constant data connections. After all, they need to also find ways to increase their ARPU’s.
There are many other market factors (consumer, enterprise, 3rd party sw, carriers, android) that are yet to appear on the horizon and apple’s ability to change and then dictate those factors are untested. I think the Business Week article’s extreme view that iPhone is the phone of the future and your own assessment in agreeing with that is a very aggressive stance.
While I do expect that the iPhone will be a big player in the overall mobile phone market, it will not cause the extinction of other phones.
I own an iPhone and I absolutely love it. That being said the speaker phone and keyboard on it are awful. Say what you will about getting used to the keyboard, it simply doesn’t match up to the treo/blackberry for typing things. I think these two things alone will keep the competitors safe.
Wasn’t Apple’s promise a year ago that they’d sell over 10 million iphones? They barely met half of that. I’m so sick of hearing people say it’s going to kill other companies. Apple has a very specific market (for everything they sell); people who like shiny, pretty objects and don’t care about functionality. Like it or not Apple’s products have never been even close to the most functional on the market, but they are pretty and that’s what sells to the kids.
If anyone suffers it will be RIM who has failed business model (forcing everything through their expensive servers that go down often) that HTC has proven is an extra cost that’s not necessary. And as many people have noted this phone is more expensive than the 1st one after you factor in the monthly increases. Fortunately for Apple and AT&T, people who buy things because they’re pretty are probably too dumb to notice that.