Two consumer electronic giants are challenging the Apple iPhone momentum.
I will not use the popular cliche term iPhone killer. The only way the iPhone will become extinct is if another Asteroid hits our planet. Lets all settle on the less violent – iPhone competitor.
Here are the competitors:
These companies dominate their respective home product markets and now have designs on the iPhone.
Let’s size up this fight and make the predictions.
In one corner, weighing in at over 100M mobile phones per quarter and a recent announcement that their new touch screen “comes with music” phone, has sold over 1M units, a dominate 40% market leader in all major worldwide markets, is Nokia.
(European whistles, and polite Finnish cheering)
In another corner, weighing in, and weighed down by Vista, with over $60B in yearly revenue, over 30% market share for desktop and laptop computers, with extra muscle in the enterprise space and an e-commerce website that ranks in the top 150 of all sites, worldwide – The Maven from Texas – Michael Dell and Dell Computers.
(Yelping and waving of cowboy hats!)
Now entering the ring, the reigning touch screen champion. They have sold nearly 14M iPhones, with 4.4M last quarter. They have generated over 500M application downloads and have corporate revenues of about $10B quarter. Ladies and Gentlemen welcome Apple.
(Audible humming from Lycra clad Apple-philes on yoga mats)
Before I get hate mail from Blackberry users asking why I did not include them, I have to state the obvious. Have you seen the Storm? If you have, you know that the Blackberry product, while good at what it does, is not yet a threat to iPhone. Let’s move on.
(Boos, hisses, and lot’s of Tim Horton Donuts thrown into the ring, ehhh?)
If anyone is going to pose a serious challenge to Apple and iPhone it will be Nokia.
Nokia is the world class, world leader in mobile devices. They have a competency that approaches Apple for usability. They already have achieved massive economies of scale. The Nokia “Comes with Music Service” launched in the U.K. in 2007.
This service allows users to download as many songs as they want from the Nokia Music Store for 12 months after they have purchased a compatible Nokia handset.
Users may keep all the music that they download. Songs are available from all of the major record labels; Universal, Sony BMG, EMI and Warner Music Group artists.
There have been bumps in the road for Nokia. Their learning curve is taking some time. With the introduction of the 5800 touch screen handset (the sexier name of this phone is the “Tube”), and over the air music downloads, they are getting close to getting it right.
With the kinks being worked out in the U.K., market expansion is expected in 2009.
Another big advantage that Nokia has is that the music industry wants a competitor to Apple and ITunes. I give Nokia a better than 50/50 chance of being the significant 2nd place market chaser to the leading iPhone product.
Dell is a different story. Dell’s Smartphone plans, or lack thereof, were chronicled in today’s New York Times. The “paper of record” was less than kind to Dell’s prospects in the Smartphone arena. The reasons for pessimism are simple.
Firstly, Dell is only barely in the handheld computing business. Their handhelds have been product and market failures. Both Apple and Nokia have huge successful handheld device product lines. Strike One.
Secondly, Dell is not known for software and user interface design. They are basically a hardware commodity manufacturer. Both Nokia and Apple are device software and usability leaders. Strike Two
Lastly, Dell has no phone design experience. To be fair, Apple did not have a resume of phone design expertise prior to the iPhone. Apple has fixed many of the early phone issues with the Iphone. Nokia has forgotten more things about phone design and marketing, than Apple or Dell will ever learn over the next ten years. Strike 2 and a half.
The strengths of Dell are in manufacturing, web marketing, enterprise accounts and sheer volume of PC boxes.
So, Dell enters this fight strategically and tactically handicapped.
Nokia, on the other hand, has better worldwide marketing clout in the mobile segment; tremendous handset design and manufacturing capability and partners who really want them to succeed. An example of the Nokia thought process for communications design is the inclusion of a second camera on the front of the phone to facilitate video conferencing. The “Tube” is powered by Symbian software and has borrowed from the iPhone in certain look and feel aspects
This will be the battlefield for touch screen, music enabled phones for the next several years.
So what should Apple do to compete with Nokia? Simple, just be Apple. Change the game every 6 months and out innovate Nokia and everyone else. Nokia may compete in the music download feature, but Apple will define the product as something much broader. The Iphone platform will out game, out video, out cool, the Nokia devices.
Nokia will try to out produce and provide their devices at a cost advantage to the iPhone.
While the outcome of this looming market battle will not be as exciting or definite as Santonio Holmes’ last minute catch in the Super Bowl, for wireless pundits it will provide enough material to fill a thousand blogs, and hundreds of trade mag articles. The initial impact for consumers in the U.S. will be some increased price pressure on the iPhone, with a drop in its contract price to below $100.
Let the games begin.
By popular demand, I will start a lighthearted “DotMania” blog to relate all of the truly wacky things I have witnessed over my years in big and small companies. In most cases I will change the names to protect the innocent, the guilty and everyone in between. Watch for it on Fridays. If anyone wants to contribute their stories to this regular feature, just send me an email with the details. See you on Friday’s at dotmania.wordpress.com