Did Apple steamroll the smartphone industry? No. Apple’s iPhone changed the smartphone industry and reshaped the segment of the industry that means the most, while pushing aside entrenched competitors– Microsoft, Nokia, BlackBerry et al.
Here’s how Microsoft can get back in the game.
What Apple Did
The iPhone changed the smartphone industry and made devices from every smartphone manufacturer look old to antiquated in the process.
Over a period of barely six years, Apple went from outsider to market dominator– not in marketshare (that is owned by the fragmented and competitive industry of Android smartphones).
Apple may not dominate in sheer marketshare numbers, but Apple owns the premium and most profitable end of the market, and dominates in mindshare.
Devices based on Google’s Android, save Samsung which has copied Apple incessantly, make up the majority of smartphones today, leaving Microsoft to dig for crumbs.
How can Microsoft (and, indeed, other former players in the smartphone industry) get back in the game?
The same way Apple took over the industry’s profit share and mindshare. Microsoft has only two choices.
First, build a better smartphone and tablet that improves notably upon Apple’s iPhone and iPad and price it the same or slightly less that the premium prices Apple gets for their products.
Or, build a smartphone and tablet and ecosystem which rivals Apple’s iOS platform, but price it much less than what Apple commands for their products.
Easier Said Than Done
Therein lies both the solution and the predicament which faces Microsoft and other smartphone and tablet makers.
What does Microsoft need to do? Build a much better smartphone and tablet. So far, that hasn’t happened. Or, build a similarly capable smartphone and tablet and price it far less than Apple’s iPhone and iPad. So far, that hasn’t happened, either (dumping unsold Surface tablets, and buying out Nokia notwithstanding).
Microsoft (or, Samsung, or Google, or whomever) could steamroll Apple if they or a collective of competitors could build a better mousetrap for less.
The problem is that unlike smartphone and tablet makers prior to the iPhone and iPad, Apple is a moving target, constantly improving the originals, growing the ecosystem, and sucking out the profits from an industry where all competitors other than Samsung struggle to break even.
Other than Samsung, the smartphone and tablet industry based on Android is highly subsidized by manufacturers desperate to achieve notable marketshare and break-even status. Microsoft also subsidizes Windows smartphones and tablets with profits from Windows and Office.
Apple’s iPhone created the wave that swept over the entire smartphone industry. Microsoft must have a similar product just to maintain minimal relevance, and must introduce a better product for less to have any hope of becoming a player in mobile technology.