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Can Anything Displace the iPhone in Consumer's Eyes?

by: Compete October 12, 2008 | about stocks: AAPL / GOOG / RIMM / S / T / VZ    
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From T-Moblile’s G1 to Verizon (VZ) Wireless’ BlackBerry Storm, there are a lot of exciting smartphones due to be released in the next few months… but can anything, no matter how innovative, displace the iPhone in the minds of consumers?

To get a sense of which of the current crop of mobile devices were appealing to iPhone researchers, I took a look at Compete’s data to see what percentage of the online iPhone researchers on AT&T’s (T) site were looking at other mobile devices in July and August - the first two months that the new iPhone 3G was available.

  • Sprint’s (S) Samsung Instinct seems to have been the iPhone’s best competition so far; in both July and August, it was the alternative most viewed by iPhone 3G researchers.
  • Consideration of these iPhone alternatives is pretty steady, and in some cases, increasing. The AT&T Tilt and the LG Dare were viewed by more iPhone 3G researchers in August than they were in July, while consideration of the other three fell by a fraction of a percentage point.

Clearly, it’s possible to capture the attention of iPhone researchers with other devices. Now that the people who had to have an iPhone right away are out of the market, the consumers who are still shopping may be more receptive to the alternatives.

But the big question is, what makes a good iPhone alternative? So far, the touchscreen seems to be a key factor – the Instinct, Dare, and VU all have one – but there’s clearly more to the appeal to the iPhone than that.

Nokia (NOK) is answering the integration of music with the iPhone (via iTunes) with the “Comes with Music” feature. The openness of Google’s Android operating system for new applications and the marketplace may draw consumers to the new T-Mobile G1; there’s even talk that the new batch of BlackBerrys may include an applications center. It may not be possible to replicate the iPhone’s popularity, but we’ll see over the next few months if anyone else can even come close.

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This article has 11 comments:

  •  
    Oct 12 10:39 AM
    What's wrong with the LG Envy? Absolutely nothing, and it is fraction of the price of the Iphone. Thanks for contributing.
    Reply
  •  
    Oct 12 11:48 AM
    I just thought I'd mention the pre-order numbers for the G1:

    1.5 million. The first two batches of pre-orders are sold clear through, and they may be trying to do more. That's a surprise, I think, to everyone -- although clearly nowhere near current iPhone numbers.

    Now. What does it mean?

    From a development standpoint, I would mention that it's far easier to whip up an application for Android than for any other competitive platform. But what's driving the pre-orders, and what does it mean for google?

    It's simple. Pre-orders are driven, not by people seeing a better iPhone, but by people seeing a simpler and cheaper *netbook*. The keyboard. The choice of a mildly tacky, "desktop" background. The integration with google's net-apps. It's "netbook", not "iPhone".

    People, if you can use it to surf the web and type and cut and paste ... then you can use it to write documents and emails and do anything you can do online. It's more a computer than a piece of consumer electronics. That's what people want to buy.

    Writing word processors and other apps for the Android system may, in fact, become a great market! Awesome. We all hope so, because Apple has got a lead-pipe lock at the moment, and competition amongst cutting-edge mobile development is important. But the apps for Android are not the determinants of whether or not the platform will succeed; for the user, the question is whether or not the phone provides a pleasant usability experience for things like typing and viewing on the web, and for companies, does the software make my sky-high development costs a bit more manageable?

    And the answer to the second is yes; consumers are hoping that the answer to the first is yes also.
    Reply
  •  
    Oct 12 12:21 PM
    <em>openness of Google’s Android operating system for new applications</em>...

    Do users really care about that though? It hasn't been that way with most technologies in the past. The iPhone may well be "open enough" from the user point of view - since most users don't understand the censorship that's going on with the App Store.

    The success of the iTunes Music Store far before iTunes Plus came along demonstrates that consumers aren't really averse to a little lock-in as long as <em>they're</... not getting trampled on.
    Reply
  •  
    Oct 12 12:56 PM
    I own an LG Vu, a BB Pearl 8310 and a 1st gen iPhone. The iPhone's interface beats the former two easily. It is so dam easy to understand and use. That is the difference between other phones and the iPhone with the non-geek crowd, i.e. 99 percent of phone users. I will also mention build quality. The former two feel cheap and plastic, the iPhone feels solid. Cut and paste will come once it has been implemented in a new, very easy to use way. I love my Saturn Vue, but in no way does it compare to the driving 'experience' of my Mercedes.
    Reply
  •  
    Oct 12 10:12 PM
    I agree with comment #1 - Peter Cooper. It's so easy to forget who really makes up the user base. Most iPhone customers are far more interested in the fact that it now comes in white than whether or not it's open. Eavesdrop on some conversations in the Apple Store and you'll know, they don't even know it's NOT open, or what open is.

    Android will appeal to the linux boys. But the iPhone has the Apple marketing machine behind it. Macs are stealing market share from Windows at an amazing rate, not linux. I'd expect Android to experience the same thing.
    Reply
  •  
    Oct 13 12:11 AM
    It's the user experience with the device that matters, not whether it's a touchscreen.
    Reply
  •  
    Oct 13 02:09 AM
    iPhone has absolutely no competition. It's been out 18 months, but remember it took eleven years for anyone to copy the Mac. Now, all operating systems are derived from the early Macintosh.
    Reply
  •  
    Oct 13 09:29 AM
    In addition to the superior design, high quality, rich functionality and ease of use, there is basically just one iPhone product (color and storage aside).
    The other manufacturers have diluted their brand with a confusing array of too many models, and the phone you buy today will be an old model tomorrow. Eg. if I were to consider a Blackberry, do I get the Bold, Storm, or Thunder, and will the one I want now still be the one I want tomorrow.
    So, in my view the Iphone's appeal is obvious.
    Reply
  •  
    Oct 13 03:12 PM
    Good point, Apple Heavy. The iPhone has remained in the postion it has because it has no other competitors.....from Apple. What's the point on spending $500 on a new Blackberry when in the next 6 months they'll just release a newer version. It almost seems like a rat race within itself. In that sense, the appeal to the iPhone is obvious in the sense that you won't have to worry about Apple outdoing you anytime soon.
    Reply
  •  
    Oct 14 07:47 PM
    True, but then not true. The Mac OS is also derived from other operating systems, and to say Apple invented the graphical interface is a gross overstatement. They might have refined it, but the GUI was born in Palo Alto in the Xerox labs. As for the iPhone, it's a good phone but lacks killer apps for the business user. I think WM-based phones are poised to take that part of the market.
    Reply
  •  
    Oct 14 10:58 PM
    eh...enough of the iphone already, the bottom line is AT&T network is 2nd rate. Go with the instinct.
    Reply
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