Despite the recent wave of adoption of Google’s Android, Apple’s iPhone is still the gold standard in smartphones.Every other new smartphone that is launched is compared directly with the latest iPhone, and, so far, they’ve all fallen short.
But Apple’s delay of the next iPhone–the iPhone 5–has opened the door a crack for Android (and even Research in Motion and Microsoft) to regain some ground. And if the delay is indicative of some sort of problem at Apple, the door could swing wide open.
From a high-level perspective, Apple is fighting the same battle that it fought–and lost–in the 1990s. It is selling an integrated hardware-and-software device and a closed development platform, while its competitors are aiming for ubiquity and spraying their platforms across every device that will have them.
In the 1990s, this strategy resulted in Apple becoming a niche “premium” player and almost getting killed off, while the ubiquitous Microsoft became the most powerful tech company in the world. Google, with Android, is now playing the same role that Microsoft played in the 1990s.This re-run of the PC battle is different in two key ways from the one in the 1990s, in part because Apple clearly learned a searing lesson from that decade.
First, this time, Apple has maintained price parity with its competitors, and in the tablet market is actually undercutting them. This is critical. In the 1990s, those who wanted Macs had to pay more for them, and it turned out that this “premium” positioning was a much smaller market opportunity than Apple may have thought. In this second go-around, however, Apple is not only the feature and performance leader, it’s also the price leader. This has removed the biggest hurdle in Apple’s ability to compete with dedicated hardware and software players: If you can get the best product for the same price (or less), why would you ever get an inferior one?
Second, the Android platform is much more fractured than the Windows platform ever was. Although “Android” as a concept has made huge market-share gains, what’s really going on is that many different flavours of Android have each grabbed a small share of the market. There are compatibility problems, and usability problems. mobile phone carriers and hardware manufacturers still insist on “skinning” their versions of Android, which means that building your life around one carrier’s version doesn’t mean that you’ll be able to easily transfer this commitment to another version. Because the greatest threat to Apple is the “ubiquity” of another platform, this balkanization of Android is a tremendous help. Unless/until Google takes more control of Android and limits its “openness,” Apple fans can rest easy: The best thing for Apple would be if the rest of the smartphone market stays as fractured and customised as it currently is.
But time is still of the essence.As Dan Frommer recently observed, Android, RIM, and others are closing the gap with the iPhone every year. And the more folks can seriously say that the latest Android or Microsoft phone is competitive with the latest iPhone, the more risk there will be to Apple’s iPhone business long-term.
It may be, as Dan Frommer also suggests, that Apple is making a planned and deliberate decision to hold back the next iPhone for a few months to make the iPhone 5 another breakthrough product that competitors can’t even hope to match.
If that’s the case, the three months will be worth it, and they won’t change the competitive landscape at all.
And Apple may also have decided that the fall is actually a smarter time to release the latest iPhone, because then the gadget will seem like the state-of-the-art product during the huge Q4 selling season, instead of a 6-month old model that has since been eclipsed by the latest Android phones. That, too, might make the delay a hidden positive.
But Apple has been brilliant about these things forever, and it has chosen to release its latest iPhones in June every year since it launched the product back in 2007. And Wall Street is already cutting estimates for the company (perhaps shortsightedly, if the delay is deliberate).
It would be stupid not to wonder, therefore, whether the iPhone 5 delay this year is due to some problem at Apple, and whether this problem might not get worse as time goes on.
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