In the summer of 2007, Apple released the first generation of their groundbreaking smartphone, the iPhone. The device recieved rave reviews for its revolutionary mobile web browsing and touch-screen interface, but received criticism due to its lack of 3G support and third party applications. Sales were strong for the phone and Apple sold 6.1 million handsets in its first 5 quarters; strong numbers, but not strong enough to bring down international smartphone leader Nokia. By the 4th quarter of 2007, the iPhone had gained a 5% international market share and was showing promise as a new leader in the smartphone market. Apple corrected many of the mistakes of the first generation with the second iteration of the phone, the iPhone 3G, in 2008 by adding 3G support and, perhaps most importantly, creating the iTunes App Store. Apple also dropped the phone’s price tag and added more then 70 new international carriers.
The iPhone 3G became a smash hit. The phone sold more then 6.8 million units in its first quarter, more than its predecessor sold in over a year of production. In its first 3 quarters the 3G sold in total more than 14.5 million units and Apple’s stranglehold on the smartphone market began. Apple released the third generation of the iPhone hardware, the iPhone 3G S, last month and the phone reportedly sold more then a million units in its first week. While the numbers aren’t perfect, certain reports suggest that, as of the June 25th, Apple has a 69% market share in the U.S. smartphone market. Internationally, the iPhone has yet to overtake Research-in-Motion (makers of the Blackberry) and leader Nokia, but seems to be gaining ground.
In the last year, several companies have tried to stop Apple’s stranglehold on the market by creating “iPhone killers.” Phones such as the Blackberry Storm, the HTC G1 and the new Palm Pre have all been touted as the new “It” phone, yet Apple has maintained (and grown) its dominant market share. The question is, “How?” Well, there are several answers to this question:
- The App Store. To date, there are more then 50,000 apps available for the iPhone and there have been more then a billion downloads from the iTunes App Store. As of today, the Palm Pre app store has about 30 apps. Literally, whatever I need to do on my iPhone, “There’s an app for that.”
- User Interface. Simply put, the iPhone user interface just works: it’s simple, easy and anyone can pick up the phone and figure it out. I know plenty of people who can’t even navigate the finder on their laptops or open the Start menu, but they can navigate an iPhone.
- Multi-Touch. The touch-screen technology used by the iPhone is second to none. The multi-touch technology works great and is very intuitive.
- Form Factor. Let’s face it: the iPhone is sexy.
- Marketing. The marketing team at Apple has done a brilliant job of touting the phone, while other phone makers have not successfully pointed out the phones flaws: the lack of MMS, tethering and a decent camera. However, Apple has now added these features and, as a result, there are now very few identifiable flaws. Research-In-Motion could point out that the iPhone lacks a decent enterprise-level mail client or HTC could highlight the device’s lack of a tactile keyboard. No Blackberry will ever match the iPhone’s media player and no Palm will ever possess an equivalent touch interface. These companies should stop trying to outdo Apple at what it does best. Instead, they should focus on promoting the features their phones have that the iPhone lacks. The timing of Apple’s releases have been critical as well. The Palm Pre received lots of buzz around the Internet for months prior to its release. However, the week the Pre was released Apple also announced the iPhone 3G S, effectively killing any momentum the Pre had been building since January.
- Dependence. iPhone users find themselves dependent upon the apps on their phone. This makes the very idea of switching to another phone seem ludicrous, considering the money they have invested and the need they feel for their apps. I personally have about $60 worth of paid apps on my phone and plenty of free ones. Switching to another phone would mean the loss of thar $60. As the number of iPhone owners increases (especially with the recent price drop of $99 for the 8GB 3G), Apple will find ways to make users more dependent then ever on the handset. With the release of iPhone OS 3.0, manufacturers are now allowed to create accessories that connect with the phone’s dock, creating all new possibilities. Medical, scientific and gaming equipment will all be compatible with your iPhone very soon. For example, GPS maker TomTom has announced an app and car kit that will dock with the iPhone, boost the device’s built-in GPS and allow for turn-by-turn voice instructions. Similarly, various medical companies are creating new technologies that will dock with the iPhone. Need to see your blood sugar levels? Plug in your iPhone and get a readout.
Like it or not, Apple’s touch-screen phone is here to stay as the leader of the smartphone market. If you don’t own one yet, there’s never been a better time, especially with the 8 GB 3G now priced at only $99. I’m just warning you now: you may never go back.
Ben Wagner is a tech correspondent for Rhombus and is admittedly addicted to his iPhone. Give him advice on how to break the habit by sending a tweet to @ben_wagner.