Can 17 million iPhone users be crazy? Probably not. Was I wrong? Probably so.
The iPhone has developed a loyal, vocal and proselytizing fan base. But 17 iPhone users are not jumping for joy over convergence. Because as it turns out, convergence is not what the iPhone is really about.
Initially, convergence is what Apple touted as the main benefit of the device. Convergence is what drives me crazy. And if the iPhone was selling convergence then I had serious doubts about its universal appeal. That was the argument I had during the launch.
The much-hyped convergence of the tv/pc, car/plane, and many other convergence pipe dreams have all been dismal failures. Apple's might have been cooler, but convergence in the end still means a device that is a jack of all trades but master of none.
And in the end, consumers want a huge television, a small laptop computer, an iPod, a Wii, a cellphone, a BlackBerry, a Nintendo DS, a Garmin GPS, a Sirius XM radio, a TiVo, a digital SLR camera etc. Not one device that can do it all because no device can ever be the best at everything.
The iPhone initially took off because of Steve Job and his brilliant ability to drum up hype. After his success with the iPod, the world was waiting for Steve's next masterpiece. (Luckily few remember his follow up to the Mac, the NeXT computer.)
But here is what really changed the game for iPhone and moved it from convergence to something else. Apple, which initially refused to allow users to install 3rd-party software on the device, changed its mind.
Then Apple launched the 3G iPhone which took better advantage of the internet with faster speeds and included GPS. This was the spark that ignited App mania.
Today, iPhone users are hooked on applications not convergence. Apps are where all the excitement is. There are over 40,000 applications available with thousands of new ones flooding into the store each month. iPhone owners have downloaded over 1 billion applications. An impressive and staggering number.
What the iPhone represents is a whole new interactive mobile Internet experience. The experience is fueled by mobile applications built for this new medium called the mobile web.
As a result, the iPhone has become a device which is desired not so much for its inherent traits of phone+camera+music+email but for its ability to download and run these little programs which give the phone magical powers.
The rise of the mobile internet has created a great new opportunity to build new brands.
Of course, most companies are just trying to expand their brands on to the mobile net, they way they did with the Internet. And as a result, few will be successful.
But for smart marketers now is the time to launch new focused brands and make a fortune. It wasn't old brands like Microsoft, Time Warner or Barnes & Noble that succeeded on the Internet, it was new brands like Google, Yahoo and Amazon.
I still have doubts about the iPhone taking over the world and crushing everything in its path. They are as follows:
1. Apple hasn't taken over the world yet.
While Apple experienced amazing growth last year of 248 percent, they are still third place in world-wide smart phone sales, according to Gartner. Apple has a 9 percent market share while BlackBerry has a 17 percent share and Nokia a 44 percent share. And let's not forget that while cool and trending upwards, smart phones still only represent 14 percent of cellphone sales. Regular cellphones outsell smartphones by more than seven to one.
2. BlackBerry is still strong.
There is never going to be one device for everybody. And corporate and heavy email users are sticking to the brand that focuses on mobile email. BlackBerry still is selling strong and growing. In 2008, BlackBerry grew 97 percent worldwide and sold 23 million phones. They may not talk as much about their phone, but CrackBerry addicts like Obama can't be without them.
3. The Netbooks are coming.
The real threat to the future of the iPhone is the netbook. Because the real excitement of the iPhone is that it is a mobile PC always connected to the internet. And netbooks are just that, but in a slightly larger form but with many more benefits like a larger screen and keyboard.
If consumers get a netbook will they also need an iPhone? And if they get the iPhone will they be willing to pay the Internet access fees for both devices? Maybe yes, maybe no.
4. Apple needs to stick to simple.
The next generation iPhone is rumored to have 3.2 megapixel auto-focus camera, FM radio, digital compass and more. What the iPhone needs to do is narrow the focus to just a few things that it does best. Focus on these and keep making them better. Forever adding additional functions could complicate and weight down the device. It is what Sony did to the PlayStation 3. Doing too much even of a cool thing is not good. Sticking to simple is best and it is how the Nintendo Wii killed the PlayStation.
5. Applications are not the next new advertising medium.
In spite of the excitement, applications are not going to be a new advertising medium. Consumers don't like advertising.
Sure an application for a virtual Zippo lighter has been downloaded 3 million
times. But gimmicks like this have a short shelf life.
Gimmicks don't represent the future of applications.
When anything is new, whether a new mass medium or boyfriend, everything is exciting. But as time goes on the excitement and novelty wears off.
Hearing "You Got Mail" used to be the highlight of the day
for people. Now email represents the drudgery of the day for most.
We now filter and delete as much of the email advertising as quickly as possible.
Email advertising is not the future. If it was we would all have sent
our money to Nigeria, met lots of new "friends" who are lonely and
taken a lot of pills we shouldn't.
Applications will follow the same pattern. Initially people will download and try almost anything. But eventually what will be left standing are the real brands and the real applications with value. The brands that are first in the mind with a new idea, in a new category and generate PR and word-of-mouth.
Of course, it will make sense for many existing brands to jump on the mobile applications bandwagon, especially when it adds value not novelty.
Like Nationwide insurance offering an application to help you if you get into a car wreck. What a brilliant idea. The first companies to launch these applications will benefit from breaking new ground. But eventually all the major companies will have applications and it won't be a game changer. (Eventually all companies launched a website for example.)
Nobody knows exactly what the future will be. Not you and not me. But what I do know for sure is that the future will always bring new categories and new opportunities to launch new brands.