WRT (With Respect To) Technology Thorough Analysis, Actionable Information

Three days spent last week (April 1-3) in Las Vegas at the annual CTIA Wireless show provided a solid glimpse of the ongoing reaction of the wireless industry to the Apple iPhone. Clearly, the iPhone is having an impact on the industry out of proportion to the number of units sold to date. The iPhone was the dominating touchstone in almost every discussion. Apple of course does not even exhibit at CTIA. However, nearly every conversation emphasized the ease of use of the iPhone. The undertone at CTIA this year was not about something you could see or photograph. The whole story this year was about usability and the emerging role of open handsets and open networks. The most frequently named product and the underlying unspoken thought were both iPhone.

Handset manufacturers and service providers are all working to respond to the iPhone. Samsung’s new touch-screen phone, the Instinct (below) captured the “Best in Show” Emerging Technology Award at CTIA Wireless 2008. The Instinct also received the Best Cell Phone distinction in CNET’s Cream of the Crop at the event.

Apple, with the iPhone, has turned existing wireless industry relationships on their head. This is particularly so in the US where the carrier has dictated so much to the consumer and device manufacturer. By offering consumers an attractive handset that sets new standards in usability, appeal, and mobile internet browsing, Apple is pointing the way for handset leadership. Initially, Apple launched the iPhone as a very closed platform to make their point and to gain initial market entree. Apple is now orchestrating a phased rollout of a more open platform with the release of their iPhone software development kit (SDK), upcoming acceptance of 3rd party applications, and a controlled means (iTunes store) of distributing “approved” applications. In this way Apple is masterfully doing what the major carriers have not, and don’t yet know how to do without giving up a great deal of control and risking becoming bit pipes. However, Apple, if they continue to execute to plan, have the opportunity to expand their franchise at a high rate and leave nonresponsive carriers and handset suppliers behind in the mind of consumers. Although Apple is starting from a very small base in mobiles, as their large market share in music players shows, their ability to connect with consumers will provide them with a great opportunity to expand the iPhone franchise and their handset market share.

For additional insight, click Comments on CTIA Wireless 2008 to view a few slides about our findings from CTIA Wireless 2008.

Now that we know the “Googlephone” is not a phone but rather a new phone operating system called Android, we can begin to forecast how the smart phone market will evolve. As with much in evolution a good deal of time will be involved. But first take the time to look over the videos (a total of 7 videos) posted by Google that describe, promote and generally talk up Google’s approach to penetrating the smartphone operating system space.

Android will have to find a place among the established smart phone operating systems that include Symbian, Palm, Blackberry, Windows Mobile, and of course the iPhone. Now that Apple have announced that they will deliver a system development kit (SDK) for the iPhone in February 2008, developers are looking forward to offering applications for a hardware platform with great appeal. The iPhone hardware combines many of the elements needed for a widely popular gadget ecosystem including a large high resolution display and an appealing human interface design. By introducing the iPod Touch media player, Apple has already extended the iPhone franchise to a second product category.The market roles of the incumbent smart phone operating systems (Symbian, Palm, Blackberry, Windows Mobile) are fairly well understood at present and all appear to be upstaged by the iPhone. By entering a relatively crowded market, Android will have acceptance challenges. First, Android will have to gain adequate momentum so that it is not simply one more OS for application developers to write to. Second, compelling hardware platforms must be developed to utilize Android and enable compelling features for consumers and solid value propositions for service providers. As I noted, evolution is slow, but inevitable. The evolution of smart phone operating systems is ongoing and we should see new species emerge by mid 2008.