iPhone aims for pole position
It's astounding how far Apple has come in the phone space in a very short amount of time. Already, the iPhone browser is the number one source of mobile phone-originated web requests, a number made easier because competitors had done almost nothing to make web browsing actually usable from mobile devices.
That, of course, was partly a function of large screens (though only partly, as the gestures-based approach to page viewing is truly innovative), and it always astounds me how long it has taken mobile phone companies to wake up to the idea that we need mobile phones the screen on which extends the full length of the device. As other analysts have noted, even if Apple doesn't hit its target of 10 million shipped iPhone devices by the end of 2008, the iPhone has rewritten the rules of what is considered baseline acceptable in the smartphone segment. It's surely no accident that Samsung's new 3G rival to the iPhone, named "Omnia," looks suspiciously like an iPhone, a fact that will win it no end of comparisons with Apple's trend-setting product.
Of course, I have every reason to believe that Apple will hit its 10 million target, as they have lowered the price of an iPhone dramatically. That will certainly help to put the iPhone into the hands of more people.
What matters more to me, however, is the new SDK, an SDK that will serve as the baseline for a range of applications that will be available when iPhone 2.0 launches. That isn't just because programmers like APIs. Other hardware companies can clone high-level hardware features. Omnia is a touch-sensitive mobile phone, and in theory, if a swarm of these appear, Apple could find itself lost in a sea of similar-looking products.
Two things would defend Apple in this case. First would be an SDK. If Apple's new API leads to a wide range of applications built around its Mac OS X APIs (reflecting Apple's single most brilliant competitive move: basing the iPhone around desktop Mac OS X), competitors have a much harder time competing with them. Software and the APIs that make it unique are a wall against rapid commoditization of your product, a fact that has benefited Microsoft immeasurably.
The other thing that protects Apple is its brand. Apple has built a brand that today is second to none. That's the result of a combination of factors, including trend-setting hardware chops (something that Apple is well suited to do, as they have been, at heart, a hardware company since the company started in the 1970s), tremendously well-planned marketing, and a product strategy which, though opaque as mud, guarantees never to disappoint so long as Apple releases something suprising and interesting. iPhone landed like a lead balloon on the mobile phone industry, and though rumors abounded that Apple planned a cell phone competitor, they kept enthusiasm high by surprising everyone with it at Macworld. That was canny marketing...and boosted an already strong brand as a result.
What is a competitor to do...specifically, a competitor that was an early entrant into the smartphone space and that used to employ this busy blogger as of a week ago?
Quite frankly, I think Microsoft has no choice but to stay focused on making Windows Mobile a strong platform for mobile phones. I've heard many-a-call for a "Zunephone" within Microsoft, though I question whether that would do much to challenge the iPhone. First, unless someone has some radical new concept for phone design that people actually want, it would have to look a lot like the iPhone. I'm not sure if that would help Microsoft very much.
Microsoft is, at its core, a platform company. There are forces that don't like that, forces that would prefer to be the "brand" that extends from platform through hardware. Many of those people are fixated on Apple, and believe that Microsoft has to BE Apple to compete with them.
I don't agree. Microsoft beat the pants off Apple in the 80s and 90s by enabling third-parties to dream up new ways to build hardware while giving them a large unified market built around common platform software. It's the 100 engineers versus 10,000 engineers approach.
A true Microsoft strategy, in other words, is more Scott Guthrie, and less J Allard.
That doesn't necessarily mean that Microsoft shouldn't offer a Zunephone. If they do, however, everything they do in the Zunephone should be made available to third parties so that they can do the same thing, and even trump the Zunephone.
The goal, in other words, shouldn't be for Microsoft to rule the space with a Zunephone, should it ever appear (and I have it on good authority that nothing is planned). Rather, it should be to inject ideas through the Zunephone into a platform space oriented around Microsoft software.
Microsoft should have a devices division so that it can acquire the skills necessary to make good hardware. It should NEVER, however, raise the software walls around its hardware offerings (as Apple is doing). Better to enable 10 million users atop a common platform that you sell to hardware vendors than to convince 500,000 to use hardware that has software exclusive to it...
...well, better if you are a platform company like Microsoft.