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.