October may prove to be a critical month in the ongoing battle for smartphone dominance in the U.S., with Android attacking key weak spots in Apple's iPhone marketing strategy, while Windows Mobile's new version upgrade turns out to be a non-event and Palm's Pre fades in the market.
The big event of the month was the Oct. 20 announcement that Verizon would join Sprint and T-Mobile USA in the Android camp. On that date it launched an aggressive advertising campaign built around the new Motorola Droid, the first Android 2.0-powered advanced smart phone with a user interface designed as a direct challenge to the iPhone. Early reviews are very positive and definitely indicate that the new version of Android is a major step forward from the initial version released a year ago. This positions Android, the mobile device operating environment developed by Google, to provide a direct challenge to the iPhone's dominance of the high-end consumer smartphone market in part by tapping markets that Apple, with its over-controlling attitude and purposeful strategy of building its own hardware and providing exclusive deals to individual carriers, has ignored.
Apple's strategy worked well for it and for AT&T when the iPhone was the only show in town. However, its big weakness is that it ignored the large potential market of users of other carriers in each market besides the one Apple chose to bless. In the U.S., that is the majority of the market. As long as Android lacked the smooth, advanced functionality of the iPhone and only sold through Sprint and T-Mobile, which are both secondary players in the U.S. market, that was not a major threat. Now, however, Android, which is based on Linux. seems to have caught up in technology and has added Verizon, along with AT&T one of the two dominant U.S. carriers, making it a definite contender in the high-end consumer smart-phone market. And because Google, unlike Apple, has chosen to focus on developing the operating environment and user interface and then partner with several cell phone hardware manufacturers, it is only a matter of time before other Android 2.0 cell phones and potentially other devices, designed to appeal to different sets of users, appear on the market. Actually, one already has – the new Barnes & Noble “nook” electronic book reader runs Android, raising the potential that it could also run Android applications. One wonders what will happen when AT&T fields an Android 2.0 phone.
Apple's desire for absolute control has caused it to make a second major strategic error, as well. Its iron fisted control over third-party applications on the iPhone through its App Store, the only source of applications may be driving third-party application vendors away. It has shown that control by pulling applications already in the App Store and refusing to allow others to access the market. Some of these decisions seem to be capricious. That means that third-party developers, most small organizations, take a big risk when they invest in developing something beyond games and ephemeral entertainment applications for the iPhone market. Apple also does not allow third-party applications to access the calendar, contacts, and other personal information management (PIM) databases on the iPhone, which means no add-on advanced calendar, contact management and similar applications such as those that appeared on the original Palms and Windows Mobile PDAs.
Android, by comparison, is open source. That means that everything is potentially open, and third party developers are invited to play. In the Palm marketplace of the 1990s that openness resulted in a huge amount of creativity and the development of some very nice applications, some of them noticeably superior to anything available on the desktop at the time.
The significance of this for potential corporate users is that Android is also open to front-end and analysis applications designed to work with enterprise applications such as ERP, CRM and market analysis. And with its strong, Linux-based technology, the Android environment on a hardware platform with sufficient resources can support some pretty sophisticated business applications that go far beyond the email, IM and limited Web display capabilities that so far have characterized business smartphones.
The Also-Rans
Meanwhile Microsoft released version 6.5 of its Windows Mobile operating system to general yawns. Reviewers are saying that this is much too little too late and are disappointed that two years after the initial iPhone introduction, Microsoft has totally failed to step up to that plate. Certainly WinMobile has its supporters, including companies that like it because their staff of Windows programmers can also write for it, but the technology has been slipping visibly in the marketplace in the last six months, and this release is not likely to reverse that trend.
The other new competitor, the Palm Pre, meanwhile, does not seem to be capturing a market outside of existing Palm users. This group that has shrunk considerably in the last few years as Palm, once the technology leader in handhelds, has fallen to the status of a low-end, low-capability smartphone provider. Significantly, Palm Inc.'s revenues and projections have not shown the kind of jump that would indicate strong sales of the Pre, even though Palm has a much smaller base than Apple, which has consistently shows a strong increase associated with the iPhone.
RIM this month announced a new model, the Blackberry Bold 9700, with a full color display and physical keyboard. What it did not announce, however, was any plans to do a major revision of its base operating environment, which is being left behind by both the iPhone and Android. The Blackberry is a perfectly adequate mobile communications device if what you want is voice, email, IM, and some calendaring. When you go beyond that, however, you soon hit a technical wall. According to third party developers, for instance, its Java environment is not standard, and is nonstandard in hidden, surprising ways that make porting a Java application to it difficult. Partly as a result, the Blackberry has not attracted the large library of third-party applications that the Palm and Windows Mobile have. It also means that organizations that want to provide advanced mobile business applications to their employees will find that difficult to accomplish on the Blackberry as it is today.
RIM does continue to grow its already large market – depending on how you count it the Blackberry can be considered to have the largest slice of the worldwide smartphone market. But the question is how long that will continue without a complete revision of its underlying technology. The things it provides – voice, email, IM, and Web access – are commodity applications that everyone must have to enter the market. As its corporate users begin to look beyond that, they are also going to have to look to a more capable solution. And today the most promising looking candidate for that may well be Android.
Action Item: User Action: When choosing a standard mobile platform for your organization, start by defining your present and probable future needs, including coverage area, ability to change carriers to get better deals, and support for any advanced applications the organization may want such as mobile access to enterprise applications. Then choose the platform that best provides those.
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