With all the hype surrounding the launch of Palm’s new smartphone the Pre and Apple’s responding anouncement for the future iPhone releases, our clients are asking us who is going to win. The short answer is the iPhone and the longer answer may surprise you.
The single most important reason has nothing to do with being a phone. Simply put, no other smartphone has the potential to replace the laptop. It turns out that competing to be the best smartphone isn’t the game at all. It is to create the best mobile computing platform, one that competes with laptops. As described in an earlier post, companies are starting to test the waters regardng the distribution and management of laptops vs. iPhones. No other smartphone competitor is in the consideration set as a realistic laptop replacement. Apple is truely the only viable choice and has created a sizeable and sustainable advantage for itself. There are 3 core reasons why.
Looking at the processing technology at the core of the device, only the iPhone OS and Google’s Android are derivatives of a enterprise class operating systems. Palm’s WebOS and the Blackberry OS were invented solely for handhelds and would need a complete overhaul to compete as a laptop replacement.
The core business and core competency of Apple is in the development, manufacturing and distribution of all classes of computers. This allows Apple to take advantage of this core knowledge and internal skillsets as it develops the iPhone into the leading mobile computing platform. Palm and Blackberry are built to excel in the phone and pda markets, while Google excels at writing next generation software. No company (other than Apple) in this space has the vertical integration necessary and would need to develop a series of complex partnership arrangements to compete. The fact that these partnerships are difficult is why Android has been slow to capture any significant market share to date.
Apps matter. Apple 50,000 apps, add everyone else up and it’s not even close… Why are most of the developers building for iPhone rather than anyone else? They’ve created the entire ecosystem. They have the developer toolkits, they have the development community, they have the distribution model (the Pre is trying to piggyback on iTunes) and they have a revenue share. And, by the way, any app built on the other platforms can the built on the iPhone, the reverse isn’t true.
Until the others playing in this space realize that they aren’t playing the right game, it will be a long time before anyone truly competes with the iPhone. What are your thoughts? Can another smartphone replace a laptop? Let me know what you think.