Apple iPhone
June 29, 2009 marks an important date in smartphone history. Yes, I know that’s 3 ½ months in the future, but we know what’s going to happen on that day because of what happened two years prior — the release of the first iPhone. 146,000 people lined up outside to buy one that first weekend; 3.7 million people bought one in the first six months; and over 13 million have been sold since launch. And all of them came bundled with the same accessory — 2-year contracts with AT&T. That means on June 29, we’ll have hundreds of thousands of iPhone owners contract-free and millions more on a rolling basis thereafter.
I suspect that most of those nice folks aren’t going to return to their flip phones and re-learn T9 to text their friends and do business. They’re not going to give up rich Internet browsing, mobile Facebook, their favorite Twitter client, or any of the amazing apps they’ve grown accustomed to using. The result is going to be millions of people open to a new phone, and they’ll want something at least as powerful and intuitive as their iPhone. Certainly, Apple and AT&T will have a ton of loyal customers re-upping, but it also presents an unprecedented opportunity for their competitors to surpass the most envied device on the market.
T-Mobile G1
Android, Google’s open-source mobile platform, is still only available on the T-Mobile G1. By pre-iPhone standards, the G1 is an outstanding device — but it still comes in a notch below the standard-bearer. HTC, maker of the G1, has an improved G2 in the works, but when will a new manufacturer get a phone in our hands? Sony Ericsson is planning its Android debut in 2009. Long-beleaguered Motorola is also betting big on Android; let’s hope they come through with their first notable phone since the RAZR hit in 2004. The Open Handset Alliance has a great opportunity to put their full weight behind the platform, but it might be a narrow window.
Palm Pre
Palm made huge waves recently with the announcement of the Pre , running their new webOS platform. This bad boy looks like a winner and is initially a Sprint exclusive. BlackBerry made its foray into the touch-screen smartphone market with the Storm in November 2008. It was released to much fanfare and has since received mixed reviews. Microsoft delayed Windows Mobile 7 until 2010, and I’m not quite sure what to make of a company whose CEO laughed off the iPhone in 2007. Nokia is huge in the worldwide smartphone market, but not in the United States.
Where does this leave Apple? They definitely haven’t reached their full potential, and momentum is on their side – 245% growth in 2008. Still, they are limited by an exclusive partnership with AT&T in the U.S into 2010. Apple gets a huge subsidy from AT&T for the deal, about $200 per phone sold. Rumors abound that they might break that contract to partner in 2009 with Verizon, the largest U.S. mobile phone provider after merging with Alltel earlier this year. Apple has a choice to make between going after greater market share and milking the AT&T cash cow. Let’s also not assume that Apple is done innovating; iPhone 3.0 hits next week with an updated operating system and software development kit.
Clearly, these are exciting times to be in the market for a new phone! There are going to be some amazing devices coming out in 2009, and Apple has set the bar at new heights. With millions of iPhone users hitting the market again as their contracts expire, we’re anxious to see how the next generation of smartphones competes for two more years of monthly payments and app downloads.
Very cool post Michael. It is amazing how Smartphones are changing the world and the way we communicate. It will be interesting to see if a phone can ever overtake the market share that the iPhone has captured. I don’t think it will happen for awhile.
Derek, it sure seems like the promise of true mobile computing is finally upon us. The iPhone definitely changed the way consumers in the U.S. view their cell phones. Surprisingly, their market share isn’t all that great — it’s just the cachet that comes from being the sexiest option out there. Competition in the space will only breed better devices, and I don’t see Apple slowing down, either. Exciting times, to be sure!
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