iPhone has been a best seller smartphone for a while in the US. With subsidized contracts, breakthrough technology and all the hype generated by the media, Apple managed to get to the helm of the mobile phone market soon after iPhone’s release in 2007.
Fast forward to 2012. The mobile phone market is more competitive than ever before with Samsung giving Apple a run for its money and almost every other player struggling to make profits. Sometimes that makes us wonder, what went wrong with the iPhone outside the US? Apple sure had a huge headstart over Android. How did Samsung and others pick up such a majority market-share? Well the reasons are simple.
a) Price:
Apple’s iPhone is super-expensive. Even an iPhone 4S, which is last-gen, costs more than the latest Samsung Galaxy SIII or the Note II in India. Apple doesn’t have the benefit of subsidized contracts in many countries outside US, that’s where Samsung scores. Samsung itself has multiple Android phones below Rs 10,000 In India.
I still get requests asking me how to buy the iPhone In India for Rs 10,000. That’s a $199 pricing, which is the starting price for a latest iPhone 5 in US currently. After spending countless hours explaining people why they cannot buy the iPhone for Rs 10,000 In India (and also explaining them that it is a fraud to do so by cheating insurance / telecom cos), I seem to understand how important the pricing for Android phones is when it comes to market-share.
b) Services And Features
Apple’s iPhone is targeted to US. Many services on the iPhone like the iTunes store for music, Books, Apps, Videos, Movies etc works well for an economy where people pay for content. Out of the several billions Apple has paid to developers across the globe, I would be that majority comes from 2-3 countries. Fact remains; Apple doesn’t even see a market large enough to sell Music in India. People here and in many other developing economies, do not pay for content. eBooks isn’t a craze unlike in US where Amazon sells more eBooks than physical books. The recently launched PassBook and last years Siri are usable in a few countries. These arise from Apple considering US as a primary (and largest) market for its iPhone.
Google’s Android on the other hand has created a vast variety of experiences w.r.t price range, form factors and UIs. This has helped Samsung score (why Samsung performs better than other Android manufactures is a separate debate).
c) Learning Curve and Distribution
Remember, Apple is a recent player in the mobile market. It doesn’t have the legacy and experience that Nokia and Samsung have. It doesn’t even have the wide offline presence in many countries like a Nokia or Samsung would have. While the iPhone did well in US, Apple has had its learning’s in the global market. Google’s partners for Android brought more than just manufacturing skills to the table, that is an underrated factor when looking at iPhone vs Android in the global market.
Market-share debate and analysis would go on for long. And as Apple would say, they do not wish to be in the game for selling in quantity, but remain a quality player. However, with the iPhone 5, Apple is catching up with Android in India and as the iPhone 5 launches in China on 14th December, it would do better than ever again. I would speculate that, the reasons for this surge in sales isn’t because of the natural growth in smartphone adoption or iPhone’s charm, but the large screen on the iPhone 5. A large online retailer in India confirmed to me that the iPhone 5 is selling significantly faster than any of the previous iPhone versions. The sales though remain slower than the Galaxy S3, is definitely more than the Galaxy Note & Note II.
The love for large screens is tremendous in a particular (and large) section of the market. This was to an extent a known fact with Android manufacturers turning on the screen size wars long ago. The Galaxy Note’s success established the large screen phenomenon for good. Apple very well understands the need for the large screen. They even have a 7.9” iPad Mini to offer, the same is again driven by consumer demand just like the iPhone 5.
Speaking about Apple increasing the screen size on the iPhone, introducing an iPad Mini and upgrading the iPad 3rd gen in just 6 months would prompt a lot of comments. Some would taunt the 3.5” screen, which worked well all these years, others would go back to Jobs comment on 7” tablets being DOA and many would have loved enough in this post to stop at the argument on pricing. And there truly are many ways to look at this.
One may argue that Apple never promised the year long refresh cycle for products, it was assumed to be forever and was praised by many (including myself). Except one, the same still holds true. We can surely argue that Apple launches its products with such commitment and marketing hype that the expectations leave little room for disruption in the minds of its consumers and critics. I can completely resonate with all the comments questioning the iPhone screen bump, a smaller iPad mini and the iPad 4 upgrade. Apple is making serious changes to make sure it doesn’t miss a step as the mobile market evolves further. It is also trying hard to hold its ground in the tablets space. One promise it maintains is the quality of products no matter what segment they enter. And to this day that largely holds true (yes, I joke about the iOS 6 maps too).
I won’t be the octopus trying to predict the future, but this has been a day of intense debate at our office. I have got my hands on one of the latest Android devices and coming from a heavy iOS / Windows Phone background, I have some mini turbulences with the Android in hand. Be it battery life, quality of apps, on screen keyboard or the device itself, I have plenty to adapt to. On the other hand, my colleague explains me that trying an iPhone is no different for them. Be it the universal search that pops up when swiping the screen or the homescreen that shows up whenever you press the only button visible, for an Android user the iPhone is an alien. The innocence in his voice tells me something I already know – one size doesn’t fit all.
For me it would be a compulsion (given my industry) to try new OSes and understand them. For a consumer it is an investment. The investment is in understanding an OS, figuring apps they want to use (in this part of the world hardly anyone buys them: P) and falling in love with the design philosophy of a particular brand1. Consumers need a good reason to switch brand and OS. Android has plenty of reasons to make iPhone users switch, Apple has fought back with a larger screen on the iPhone 5. Each of these now have somewhat cheaper devices for smartphone buyers to upgrade from. Windows Phone manufacturers now understand the necessity of seeding lower priced handsets in the market. The consumer is surely winning, but the decision making for your next smartphone upgrade is more difficult than ever before.
1For the ones wondering design philosophy? Really? Well, don’t you often hear people sharing their love for good old rough and tough Nokia’s? Feel of the HTC hardware or the QWERTY on a Blackberry?
