The big story this week is the record number of iPhones, iPads, iPods that Apple sold in Q4, 2011. Great news for Apple and it’s shareholders – their stock got a 7% bump on the news – but, with stellar growth in the number of users of the iPhone, what’s the achilles heel that slows their march on the market? I think it’s innovation. It’s something I’ve been doing a bit of thinking about on my own blog, and here’s my case, I’m interested in your reasons for agreement or disagreement.
“Apple needs to either revisit its heritage as the hardware and feature innovator or Android will eat away at Apple’s share of mobile OSes, especially outside the US”
Innovation has not been Apple’s strong suit in mobile as it has been elsewhere. While the company was the first to equip its laptops with goodies like Firewire, Thunderbolt and even WiFi, and being the first of the PC majors to dump optical media for its OS, Apple was uncharacteristically shortsighted in its early deal-making for its mobile devices. Exclusivity resulted in a very long tail of carrier relationship growth. Who knows what their device volumes would look like had they pushed for a larger number of early relationships and quickly ramped the number of Phone carriers in market. Add to that the fact that they’ve owned the market due to novelty, in terms of trendsetting product design and a winning approach to expanding device function, the app store. These are not long-term, sustainable differentiators. At a certain point, Apple playing “us too” on hardware and OS features is going to leave premium-paying users wanting.
- Standard features leave iPhone in the dust: NFC and touch will be available in every new BlackBerry Bold and many Curve devices RIM offers from here on out. Yes, RIM, the company many are saying can’t do anything right. Contact exchange via NFC is standard in blackBerry OS 7. Google has developed an entire payment infrastructure – Google Wallet – around the NFC chips in its Android handsets, though it’ll take a while for that network to reach critical mass.
- “Coming Soon” wont’ cut it. Voice recognition? Siri is neat, but voice interaction is here, now on Android (and has been for a while, though arguably not as interactively) and, using it outside the phone OS? Windows Mobile makes use of voice to interact with home theater via devices like the XBox that you can use today. NFC from Apple? Coming soon. Interaction between iOS and your TV, well, some of it is there with Apple TV today but Siri’s rumored features in development are the real story, and also… coming soon.
- The App Store model is great, but devs like options. Apple did a smart thing with the launch of the App Store in 2008, by inviting in a number of developers to create experiences – via apps – for a wildly popular handset, they were able to quickly scale the use cases upon which they have successfully marketed the product. Leaving innovation on the platform to third parties was a smart move to put distance between iOS and other mobile OSes, but the natives are getting restless. As the percentage of devices running Android tops those running iOS, for how long will developing for just iOS make sense? Those unique experiences? Coming to an Android handset near you soon, if they haven’t already.
Neither NFC, full voice control nor expansion of applications beyond single-purpose tools and ‘gee whiz’ geegaws is going to deal the Apple juggernaut a fatal blow today, but these “nice-to-have” cutting edge features are just the things that users have traditionally bought premium priced Macs over black or beige PCs in the past. The mobile device is the new computing platform for an increasing percentage of the population. Trailing in innovation now means a game of catch-up later, which could put Apple behind the 8 ball based on competitors’ speed-to-market exhibited to-date.
At a certain point, Apple playing “us too” on hardware features and outsourcing unique use cases is likely to fatigue its loyal fan base. The company needs to either revisit its heritage as the hardware and feature innovator or other platform players – that pool largely being limited to Android at present – with its myriad options and breakneck release cycles will eat away at Apple’s share of mobile OSes, especially outside the US where the price sensitivity for devices is much more receptive to low-cost options.