Why the iPhone can't be 'killed'

Every time a supposed "iPhone killer" hits the market its sales come in well below the iPhone's sales numbers.

Every few months, some new hopeful to the smartphone market will garner enough hype where various media outlets will dub it an "iPhone killer".

The idea behind such pronouncements is that Apple's flagship device is ready to be toppled from its perch and that a new device is primed to take its spot atop the smartphone market. Every time the supposed "iPhone killer" hits the market, however, its sales come in well below the iPhone's sales numbers.

Consider the Palm Pre, the latest major device to win the dubious distinction of being dubbed a potential iPhone killer. During the device's debut weekend in the United States, analysts estimated that it sold between 50,000 and 100,000 units. The iPhone, meanwhile, sold a reported 146,000 units in the two days following its first release in 2007, while the new iPhone 3GS has sold more than 1 million units over the first two days of its availability.

The team at Palm shouldn't feel too bad about their comparatively weak sales numbers considering that other similarly hyped smartphones such as the BlackBerry Storm, the Samsung Instinct and the Android-based HTC G1 have also failed to slay the iPhone. This may leave device manufacturers scratching their heads and asking themselves what they need to do to topple the iPhone. The answer, at least in the short term, seems to be "not too much."

Apple's big head start

When the iPhone took the cell phone world by storm two years ago, it was viewed as a revolutionary, game-changing new device that would alter how mobile phone users consumed data on their devices. In reality, the iPhone was merely the next logical step in Apple's quest to rule the world of wireless devices. After the company had scored big hits with its iPod portable music players and its iTunes online music store, adding a device with voice and data capabilities to its arsenal seemed like a natural progression. Gartner analyst Carolina Milanesi says that the iPhone's continued success in the smartphone market has as much to do with its relationship to other Apple devices and software as it does with its own capabilities.

"From technological perspective, there are devices out there that might have higher specs than iPhone," she says. "But there's nothing on the market today that pulls everything together to give the superior user experience that you get with the iPhone."

One area where Apple has gotten a big head start over its competitors has been in fostering the development of third-party applications and selling them through its iPhone App Store. Ever since its official launch last year, the App Store has sold more than 1 billion different applications and the store itself offers more than 50,000 different applications for users to choose from. Palm, by contrast, recently said that it was delaying the release of its webOS software development kit to the general public until the end of the summer, meaning that most third-party developers won't have the ability to create new applications for the Pre for at least the next couple of months.

"Apple has built tremendous developer momentum, as proved by going from zero to 50,000 apps in less than two years and from zero to a billion downloads in less than nine months," says Forrester Research analyst Ted Schadler. "And it's not just consumer applications. There are also enterprise applications such as Cisco WebEx, Salesforce and Oracle."

The only company that has come even close to sparking the kind of third-party application development for mobile devices so far has been Google, which released its Android software development kit months before Apple did. But because Android is an operating system that isn't tied to any one device, it has yet to achieve the widespread popularity of the iPhone.

"The point of developing Android for Google was to provide a mobile platform that allows for the integration of the services they offer," Milanesi says. "Google doesn't seem to have any interest in producing its own hardware and even if it did, it doesn't have the same charismatic brand that Apple does."

In the near term it seems that the only way for a device manufacturer to knock down, rather than simply follow, the iPhone would be to create a similarly game-changing device. One such possibility is the "gaming phone" that Sony has long been rumored to be developing. The speculation so far has been that the phone would be modeled after Sony's PlayStation Portable device and would provide a stronger gaming experience for mobile users than anything the iPhone offers. But Milanesi says that even this is a dicey proposition as many gamers might decide they simply want a mobile gaming platform that doesn't have the added distraction of being their primary communications device.

"I think a lot of gamers would rather go for a full PlayStation than a phone-based as a video game system," she says. "At the end of day you have enough phones that do voice and they are small enough for you to carry a second device that does only video games. I'm not sure that a video game phone would bring much to Sony, to be honest."

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