Despite decent reviews of new smartphones from Nokia, BlackBerry, and HTC, as well as Microsoft’s highly touted Windows Phone OS, Apple’s iPhone and iPad competitors, save Samsung, haven’t made much of a dent in in the iPhone and iPad juggernaut.
What’s going on? Why don’t customers switch to newer and less expensive smartphone and tablets? Why are customers sticking with Android and iOS devices instead of moving elsewhere?
Of Pain And Lock In
Yes, competition is intense, but a number of very good smartphones have hit the market recently and been met with a collective yawn among customers. What’s the problem?
I have a few theories, not the least of which has to do with a few different kinds of customer lock in. In the U.S., most of us get our smartphones on a contract basis which spans a couple of years.
When a new smartphone hits the market only a portion of the installed base of smartphone users are eligible to upgrade to a new model.
That stunts the growth of any new smartphone, regardless of how well it’s promoted or how glowing the reviews.
That’s one kind of lock in. Two other kinds of lock in have to do with basic features and applications. iPhone and iPad users tend to spend money on applications, and use applications more than their Android toting cousins.
Switching platforms means ditching familiar applications and collected data, and raises the cost of moving away from the iPhone.
While the latest offerings from Samsung, BlackBerry, Nokia, HTC, and others might be worthy smartphones and compete well against the iPhone on a feature-by-feature basis, they don’t bring enough new capabilities at a basic level to entice or compel a mass of customers to switch.
There’s a lot more that’s common about today’s rash of smartphones and tablets. All are light and powerful. All feature decent screens. All have plenty of apps from which to choose. No one device is heads above any other quality device.
Apple’s iPhone was heads above other devices for a number of years. That allowed Apple to launch the App Store (which creates additional investment which translates to customer lock in), the iPad, and polish the walled garden ecosystem so that customers would not necessarily want to leave for a smartphone or tablet that has mostly the same functionality, but fewer quality apps, and a lesser environment.
The problem that most of Apple’s competitors have today is that five years after the iPhone’s launch they’ve just now begun to ship smartphones that are feature competitive, but without the attractive ecosystem which locks in Apple’s customers.
Where’s the innovation?
A larger screen, faster CPU, more storage, better camera, or a few gimmicky apps does not innovation make. That means Apple’s competitors have to compete on price, which explains why Apple owns about 70-percent of the industry’s profits.
Competing manufacturers haven’t been able to innovate sufficiently to compel users to switch. The next great smartphone revolution isn’t here yet.