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Technology and Me

Posts Tagged Apple

The iPhone Killer: Time

Nov 24

Posted by Brad in Cellphone, Consumer Electronics, Internet Technology | No Comments

As the iPhone has grown, every new Smartphone has been simultaneously lauded as an iPhone killer (by eager supporters), then blasted for failing to do so (by cynical bloggers). But that’s okay, I’ve finally figured out what I think will be the iPhone Killer. As you may have guessed from the title – Time. Time takes its toll on all things, and I think the iPhone is rapidly nearing the end of its position of prominence.

First off, the facts. While the iPhone is a popular device, depending how you slice your market demographics it ranges from “unquestioned overlord” to “mid-volume runner”. Yes, it has sold more than any single model, but most manufacturers don’t make only one model. In fact, may people are lying with statistics, treating the iPhone as only one model when in fact six exist in the US. There’s the 4gb and 8gb versions of the 2G, the 8 and 16gb versions of the 3G, and the 16 and 32gb versions of the 3GS. Blending all of these into one number, spanning multiple model years and often duplicate customers is misleading at best.

Apple’s competitors in the space aren’t exactly doing poorly, either. Many other mobile OSs have GROWN in size since the introduction of the iPhone. Symbian, Blackberry, and Windows Mobile have all increase their sales volume and revenues since 2007. On top of that, the removal of Palm’s PalmOS models from the market and the introduction of the Sprint-only WebOS models has left a gap filled largely by Apple and RIM. Even the aging Windows Mobile has grown, despite no major changes to the OS since the May 12 ‘05 release of Windows Mobile 5.

But all of that is not to discount the impact Apple has had. Devices are more powerful, rich application libraries are a requirement, and let’s not forget that their rapidly-dissolving relationship with Google gave rise to Android, which is already making significant gains in Apple’s tech-savvy elite, attracting developers and power-users and leaving Apple to scrape the bottom for new customers.

Take a look at the three images below. See what they say about the iPhone’s perception in the market. All images come from BrandIndex, via AppleInsider.com

att_customer_perception

First, this graph shows the perception of AT&T vs. Verizon, following the launch of the iPhone 3GS. Notice the sharp downturn in both companies, with AT&T’s being noticeably sharper. After the launch of the 3GS on June 18, people began to notice the struggling impact of a data-intensive device on AT&T’s aging, poorly-managed 3G network. Many users reported losing 3G coverage even while in areas AT&T was supposedly offering great coverage. While voice worked, AT&T’s data network was sorely lacking.

brand_perception_index

Next, take a look at the brand perception of Apple vs. Motorola leading up to the Droid launch, specifically among men aged 18+. Droid’s

 brand_recommendation_index

Lastly, look at the perception of AT&T vs. Verizon in the weeks leading up to the Droid launch. AT&T was never “liked”, but it hasn’t historically been much worse off than Verizon. Now there’s an almost 40 point difference – most likely attributable to the numerous “There’s a map for that” and “Droid does” ads. AT&T, the only source of the iPhone today, is tanking in popularity and public perception among adults. Why would you want a cool phone if it’s on the nation’s worst network?

When you put all these together (as I’m sure someone at Apple has) you see a pattern emerge: the iPhone isn’t really seen as a cutting-edge device anymore. It hasn’t fundamentally changed in 3 years. Sure, memory bumps are nice and getting the features that have existed on other phones for a decade is a welcome addition, but it’s not revolutionary anymore. In fact, for the tech-elite, the cutesy, childish UI is no longer a novelty, but a frustration. For top-tier developers, having a locked-down platform with an unpredictable, often irrational gatekeeper is unforgivable. And for everyone else? AT&T sucks more than the iPhone can make up for any longer. AT&T has not invested in its 3G networks (coverage or infrastructure), and iPhone users once proud of their device’s web-surfing capabilities are now behind, from a data coverage, screen resolution, and technology standpoint.

Will any one device crush the iPhone? I don’t think so. I’m pretty sure it’ll die the way Apple’s OS did – the death of a thousand tiny cuts. You’ll have a small group of users who are willing to trade the simplicity of a locked-down, highly limited environment for poor quality coverage, a less capable device, and a single form-factor.

If I had to guess though, Apple will probably react by trying to diversify, but it’ll be too little too late. The iPhone exclusivity contract will last a few more years, and they’ll release one or two more devices. Maybe one with a keyboard, maybe one with a bigger, sharper screen, but once they do that, the simple elegance of “every app on every phone” is gone.

Then they’ll release a CDMA version to Verizon and Sprint, but no one will care. Sure, there will be blog hype (as their is around a lot of what Apple does), but for the average consumer it won’t matter, and it won’t translate into big numbers. Mostly, you’ll get people who hate AT&T jumping back to their original provider (Verizon), or switching to Sprint for the unbelievably cheap internet coverage they offer.

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How Apple Controls Perception, Reality

Aug 14

Posted by Brad in Computing, Consumer Electronics | 1 Comment

So I’m not really an Apple guy. It isn’t that I dislike their products, or even have a particularly strong opinion on the whole “Now you’re an Apple user” cult that seems to happen. I think it really comes down to me seeing past the advertising veil. They’ve managed to take an industry where you have almost limitless consumer choice and reduce it to “us vs. them”

And they’re great at it.

Who is Apple’s biggest competitor? If you answered “Microsoft”, you’re wrong. But that’s OK, it’s what they want you to think. And they spend untold sums every year to make sure you keep thinking it.

When you really get down to it, Apple competes with other systems integrators and hardware companies; Dell, Sony Computer, Lenovo, HP, etc., companies that are, in many ways, not terribly different from Apple. They take all the same parts (even processors!) and stick them together in the same kind of boxes. They offer a range of similar products at similar prices, dip their toes into other markets, offer similarly built gear, and so on. So why play on a level playing field, when you can stack the odds?

The greatest myth that Apple has maintained is that you are choosing between Apple and Microsoft. This allows them to draw comparisons that feature them in an extremely positive light, and severely limit your choice as a consumer. When you have a problem with your Apple computer, you call your Apple help line, visit an Apple store, or send it to an Apple repair center. Ever try to get Microsoft on the phone to help you with your Dell? Apple marketing has convinced users it is because the software giant doesn’t care about them, and pawns off support and responsibility. Every comparison they make in their commercials builds on the idea that your choice is Apple or MSFT. Because if you were really choosing between Apple, HP, Lenovo, Dell, Sony, Eee, Asus, and a handfull of other companies, you’d pick Apple a lot less. They effectively shrunk the market to two players: Apple and “everyone else”.

Let’s get a quick fact out of the way, because it is difficult to really delve much deeper into this without it. Apple has about 4% of the computer market. That’s it. They’ve heald steady at that number (+ or – 1%) for the last decade. Through all their ups and downs, they’ve never crossed 5% and never dipped much below 3%. They’re a small player. But they have one thing that Dell and HP and the rest don’t: the brand.

Apple has arguably the most powerful brand in computing and consumer electronics to date. They have managed to make their users feel better for using Apple products, superior to those who do not. Take a look at their long-running campaign, the “I’m a Mac, I’m a PC” ads. Have you ever wondered why those ads exist? Is it to introduce a new product? Is it to recruit new users? No. It is to fluff up the egos of Mac users, reinforcing the idea that they are in an elite and select group (one that is larger than it really is), which has somehow seen beyond other computers to the perfection that is an Apple product. They are not just the overweight middle manager in a suit: they are the freedom loving, college-dropout pothead on the right. They are young, fasion conscious, and popular.

Apple ads are also a forum to spread misinformation about competitors and half-truths about Apple. Vista crashes a lot? Sure. Apple is immune to computer viruses? Why not? The ability to run Windows on a Mac is a feature, but the inability to run OSX on a PC is a shortcoming of Windows? Wow, I guess so! Apple commercials are strictly about building an emmotional relationship with the consumer and increasing the preceived value of a product. $2k for a computer you can buy anywhere else for $1500? That’s a hard sell. But $500 to feel like you’ve made the “smarter” choice? Well that’s just a good deal.

I could go on and on, but I’ll leave you with one last point: Apple prides itself on a minimalist approach to design, because complex computers are “scary” and unfriendly. This limits the things you can do with them. But as an entire generation grows up around computers, do you think Apple can maintain “simple is better” forever? Or will an OSX machine seem too “childish” by the time you hit 15? Only time will tell, but I think they have a big problem on their hands in the next few decades. That is if they make it that far.

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