When competitors copy Apple’s iPhone how does Apple create differentiation, and how do competitors differentiate their smartphones from Apple? If product differentiation rules are somewhat universal, what is Apple doing to differentiate the iPhone of the future?
Let me start by covering a few basic rules of product marketing, especially as they apply to differentiation.
The original iPhone’s screen was 3.5-inches, probably the perfect size to navigate the phone’s screen icons with one hand and a couple of fingers.
How did the iPhone’s competitors differentiate their smartphones from the iPhone? Larger screens.
Another way Apple differentiates is the Retina display, which produces higher pixel density. Competitors can copy the Retina display, of course, but even higher pixel density than the iPhone doesn’t result in a sharper screen (at least, visible to the naked eye).
Battery life is another way to differentiate a product. Apple’s new MacBook Air line features 9-hour and 12-hour battery life. Smartphone battery life is never what we want, and whatever technology Apple uses to advance the iPhone is quickly copied by Samsung and others.
Another rule in product marketing exemplifies what is happening in the smartphone segment of mobile technology. Price drops vs. commodity features. Assume that Windows Phone works much the same as iOS. If it does, what’s the compelling reason for a customer to switch from an iPhone to a Windows Phone?
Either the technology and feature set must be obviously superior, or the price tag much lower. Otherwise, why bother to switch sides?
Reports are floating across the web about a technology Apple invested in a few years ago called Liquidmetal which could be used to create a nearly indestructible case for the iPhone, which won’t crack or break or scratch. Would an indestructible iPhone differentiate it from Samsung’s line of plastic, and highly breakable phones? Yes. But at what cost?
Recent patents indicate Apple may have made a breakthrough method to create products made with Liquidmetal, but it’s unlikely to be less expensive than aluminum or plastic. Other reports say Apple will introduce a lower cost line of iPhones with a polycarbonate shell. The high end of the smartphone market is nearly saturated, while the low end still has plenty of market to exploit.
That’s why I believe Apple is not only working on a lower cost iPhone, but a higher cost iPhone, too (which may simply be priced the same as the current version). A new version of highly reflective and non-breakable Gorilla glass mated to a Liquidmetal shell would make for a very durable iPhone, clearly differentiating itself from the predominantly plastic bodies from competing smartphones.
Apple also differentiates the iOS product line from other smartphones and tablets through iOS, the App Store, iTunes media store, and the growing ecosystem of third party applications and product accessories. Differentiation is key. If Apple is to be unthroned as the mobile device profit king, competitors will need better features and usability at the same or lower price. That hasn’t happened, and it’s not likely to happen because Apple isn’t standing still.