Cell Canada

Canadian Cellular Industry News, Insight, & Noise

iPhone, gPhone or Windows Mobile?

Posted by robertwright on October 22, 2008

In late September, the initial Google gPhone was introduced: HTC Dream. Google’s strike on the phone market is significantly different than Apple’s, and could, if we measure success by domination of the Internet, be a viable threat to the tumultuous existence of the current mobile industry and cause Apple shareholders some concern.  Is this the wireless battle of this decade?   Since the market has been shifting from PCs to smart phones, this new encounter may well redefine the overall market influence of the various players, with Microsoft mobile being the most at risk, and Google with the most to gain (because it is just entering), and Apple defying all expert opinions by capturing the heart and soul of its customer’s.

Let’s assess a technology early adopter, In Japan, teens and university students are using mobile phones vastly more than they are their PCs for text communications, and any other activities that traditionally would normally require a PC.   In contrast to the younger generation, many executives who are travelling for a short 1-2 day business trip opt to use their smart phone for all communications and reviewing of key documents eliminating the need to take their laptop. These trends question the need for these influencer target markets to have a PC at all. In effect, the smart phone is probably about where the laptop was about 10-15 years ago, the big difference is that technology is growing at a much faster pace and it’s by products are on an accelerated adoption curve.

Let’s disect the BIG three market players:

Google’s HTC Dream Phone, Apple’s iPhone, and Microsoft’s Windows Mobile Platform

Google’s desire for mobile phone world domination using its Chrome browser and Android platform won’t be because of the initial HTC Dream phone, in fact it will have to do with the stirring of iPhone and Microsoft concepts into a differentiated strategy that appears to form a “best of breed concept”.

HTC is one of the leading suppliers of Windows Mobile based smart phones, selling one out of every six smart phones in the US. Windows Mobile is actually, at an estimated 26 million sold, more successful than the iPhone in terms of volume. But why have none of its phones created the buzz the iPhone has created, or developed the design that Apple has innovated. Microsoft has power in numbers, but Apple, in today’s mobile market, has more influence on the market.  October 8th, 2008 Fierce Wireless named Steve Jobs the most powerful influencer in wireless.

“Jobs’ ascent to the top of the wireless heap mirrors a massive paradigm shift in the structure of the industry itself. The 2007 introduction of Apple’s iPhone rewrote the rules that long governed the wireless marketplace, wresting absolute power away from operators while illustrating to consumers the full technological promise of the mobile platform.”

The Microsoft advantage in this space is that the Windows Mobile is hardware independent, thus they are executing a plan similar to Windows for PCs and they have been in the game many years prior to Apple or Google.

iPhone Advantages and Limitations

Apple’s iPhone is like the Model-T of smart phones, in essence the choice of designs and colors are limited to black or white, one size fits all.  The iPhone today is not customized in look and feel to suit your individual personality.   Also you are limited to either AT&T in the US and Rogers in Canada.  The iphone applications are an advantage; however, they may be limited as they must not create a competitive advantage against Apple.  In effect, with respect to applications and competition, it is like someone took a lot of the qualms consumers have made about Microsoft, and gift-wrapped them into an Apple strategy. Of the three companies, Apple is the most limited. Ironically however, its device is also the most desired, which is a credit to Apple’s design and marketing execution.  This may also suggest some of us are giving up our freedoms too easily.

The iPhone is incredibly easy to use, and connected to two market-leading services: iTunes and the Apple Application Store, both of which currently dominate the competition in terms of interest and capability.  These advantages alone promise the ability for Apple to continue its leap forward and make Apple a stock of choice for investors. 

Windows Mobile’s Advantages and Limitations

If Apple is about simplicity, Microsoft’s platform is about choice and connectivity. Windows Mobile is integrated to phones from a wide variety of vendors, ranging from Palm to Motorola and HTC. These phones come in different sizes, shapes, and colors, and even offer different interfaces. The Windows mobile platform connects back into Microsoft’s back end of communications offerings, led by Exchange, and the phone also has third-party developer support. However, there is nothing yet like the Apple’s Itune experience or Application store, in terms of available music content, programs and their ease of use. 

Microsoft also lacks any one phone that has the excitement created by the iPhone.  I am sure even CTOs in companies that make Microsoft Mobile phones probably also carry iPhones. HTC “Touch” has been the most aggressive in creating an iPhone-like front end for Microsoft’s Mobile platform, and its Touch line is the closest to the ideal created by the iPhone. The Sprint version of the HTC Touch “Diamond” (due largely to Sprint’s services) comes closest compared to all phones currently in the market.

Microsoft as usual has failed on closing the user experience and the marketing gap between Apple’s offerings and its own. With its new $300M marketing campaign Microsoft has chosen its traditional “build an inferior product; and market it better” approach.  The user experience issue is on hold perhaps until their next version of its platform, or until more manufacturers take lead and invest in touch interfaces with its Windows Mobile phones.

 Google’s Chance

Google is determined to create an ecosystem of services and partners that can rival Apple.  They have also approached a number of phone manufacturers to assure it gets Microsoft-like wide coverage. The first phone, the HTC Dream, is more of a mix of Blackberry RIM and Microsoft Danger concepts then it is a direct attack on the Apple iPhone.  Keep in mind this is the first of many product launches by Google. 

First impressions are very powerful, if consumers approve this is a huge win, and if not Google may lose prior to getting out of the gate. So far, the public’s impression seems mixed. Other than the fact this is a Google phone, few seem that excited about it. But the launch campaign is just commencing, so this may change. I’m already getting the sense that the launch is more similar to a traditional Microsoft one than an Apple event, which typically isn’t a good thing. Still, the Android platform is designed to work off back-end services, and Google has done a better job of both assuring the initial set of applications (some of Apple’s applications are not very good; however some are GREAT!) are good, and on being more liberal with them (they don’t have Apple’s Big Brother competition complex).  Google also has Amazon providing the multimedia services, as a strong alternative to iTunes.  Overall, even though we initially only have one phone, it’s not a bad strategy.   

Who Wins?

The market-share lead Microsoft has may become irrelevant, Apple has definitely emerged as the leader for the time being, simply because the consumers are excited about the iPhone and most of the major players are following it. The company’s limitation is scale, in both company size, and line breadth (we aren’t a Model T, one-product-fits-all world). If Microsoft and/or Google can close the design, marketing, and user experience gap with Apple, they could take the lead, because neither has the same scale issues. But this isn’t a multiple-choice challenge: They have to do all three. And so far, that has been very difficult. For instance, only Apple has subordinated the carriers to own the user experience. No one else has successfully done this and this has given Apple one more unique advantage.  If the overall market moves to a single future version of these platforms at large the only question that arises is can Apple’s current single-vendor strategy scale to the numbers this kind of opportunity represents?  (In 2007 there were 3.3B cell phones in the world.  Also where do the other established players such as RIM, Symbian and LiMo fit in this space?  This will prove to define the future of the mobile industry.

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