The Most Eagerly Awaited Smartphone: the iPhone 4 - Apple increasingly preaching to the choir

There are those who've been around the mobile industry a while longer than Apple, who joke that to see what will be new in the next iPhone, just pull out a 3 year old Nokia.

There is surprisingly much truth to that joke in this, the newest iPhone. But Apple has added new clever bits. How will this iPhone 4 do in the market place? I am afraid Apple is increasingly 'preaching to the choir' and seemingly only offering something for those who already own an iPhone, rather than take on the big rivals who seem to target the iPhone on all fronts.

WHATS NEW IN iPHONE 4

So what is new? This is straight from the Apple website, so please Apple fan-boys, don't crucify me for nitpicking on the meaningless. These are Apple's five big news items in the iPhone 4. Apple's biggest achievement to celebrate is 'FaceTime' video calling. To achieve this, Apple has installed a second VGA camera facing the front (ie on the same side as the display). This is the secondary camera, the primary camera still faces to the back of the iPhone, the same configuration now as has been the format with most other 3G cameraphones.

The second source of celebration by Apple is what they call 'Retina Display' which means a 4 times more sharp display by resolution (in the same size 3.5 inch screen as in all previous iPhones). The new resolution is 940 x 640. The increase in the clarity to the iPhone screen is clearly visible to the naked eye (similar to how early dot matrix printers - with visible 'dots' of 'computer printouts' compared to laser printer outputs that seemed to look like they came from a printer. Visibly more sharp.

The third achievement is multitasking. The fourth improvement is HD quality video recording and editing. And the fifth improvement is a 5 megapixel camera and LED flash.

This is what Apple itself celebrates as the new features of iPhone 4, that Apple claims is the biggest thing to happen to the iPhone since the (original 2G iPhone). I would immediately scream to point out that the difference of the 2G iPhone from 2007 and the iPhone 3G from 2008 is a far more comprehensive upgrade and improvement than this iPhone 4. So while the iPhone 4 is the best iPhone yet, and the changes are significant, the biggest improvement 'ever' to an iPhone was what happened with iPhone 3G in 2008. But yes, Apple are masters of the showmanship, and they want to make big claims.

Those are not the only changes. The new iPhone has clearly visible design matters, a clear 'facelift' in the style of car makers who come to the mid-point of the lifespan of a model, and a few years after the original is released, they do a facelift version. This iPhone 4 does not have the type of iPhone rounded back as we've come accustomed to. It is very square, reactangular, in profile (more like other phones?). The iPhone for the first time comes in two colors, black or white (and isn't that also typical of normal phones, that there are options in the colors of the case). And Apple even now offers colored 'bumpers' in rubber and plastic - hey, thats just like Nokia phones a decade ago! Plastic color hilights.

And yes, the one button design is also now history. Apple finally admits that the user gains a significant advantage out of some dedicated buttons, like standard volume controls for playing music. There are actually several buttons now on the iPhone 4. Its not a QWERTY keypad haha, but Apple has clearly abandoned its 'we only need one button' thinking and now is adding user input methods through dedicated buttons. (I think this is very good). But isn't that yet another way that Apple is going mainstream?

The iPhone adds a third dimension to its sensors, which should make some games even more intuitive to play. The processor is faster, the battery lasts longer. And at least in the USA (and I am guessing therefore most of the world) the price of the new iPhone 4 is exactly what used to be the price of last year's iPhone 3GS. And like last year when the old model, iPhone 3G was sold at a severe price discount in its second year, now the iPhone 3G has been discontinued, but the low price point is taken by the iPhone 3GS. In the USA, that means the cheapest iPhone 4 costs 199 dollars on AT&T 2 year contract with subsidy, and the new price for the iPhone 3GS is 99 dollars with AT&T subsidy.

And its the slimmest smartphone on the market (according to Apple). Isn't this the Razr strategy when Motorola kept giving us an ever slimmer premium phones. Oh, but that was before Apple joined the industry, perhaps they didn't notice that we once went through the slimming contest, whose phone was most like the thickness of a credit card, haha.

APPLE LOYALISTS WILL LOVE IT

This is 'everything you ever loved in your iPhone, but more and better' - Now you get your LED flash and 5 megapixel camera that so many begged for. Now you get multi-tasking, what many more apps and tech oriented geeks were pleading for. Now you get HD quality video recording, and yes, video calling. If your iPhone 3G model is about two years of age and its time to think of an upgrade, this new iPhone 4, adding on features we got in the 3GS model. So anyone who had been living with the original iPhone 2G, now there is so much awesome Apple goodness in the iPhone 4, there is no reason to wait anymore.

And that is I think where the 4 times sharper screen will play a big part. Any existing iPhone owner will of course compare the two screens side-by-side. The iPhone 4 screen size is no bigger. Identical is size. But its incredibly sharp. So any video or any picture or any website etc, will be visibly more crisp and compelling on the iPhone 4 - when comparing to any older iPhone. The comparison is even more obvious and vivid explicitly because the screen size is the same. 

The new OS for the iPhone supports many other advanced smartphone features in addition to multi-tasking. It has folders, and even allows iPhone users to customize the home screen (again, folders and customizable home screens, these are years-old standard fare for such 'old fashioned' smartphone operating systems as Symbian haha). 

Statistics from all markets where we have heard of them into the public domain, including Nielsen just on the US market reported last Friday - Apple iPhone owners are the most loyal repeat buyers of any smartphone brand. They are already pre-disposed to prefer an iPhone. Now Apple gives them even more "iPhone-niness", clearly the iPhone 4 is in many demonstrable ways visibly, concretely, practically better than all previous models including the iPhone 3GS. Existing iPhone owners will find overwhelming reasons to upgrade to the iPhone 4. But... as the smartphone market is in hypergrowth stage, just keeping existing customers is not enough for Apple. They have to grow, and now I think their recipe of keeping Apple loyalists happy, is not enough.

US WILL LOVE iPHONE 4

In the US market, there is no collective consumer memory of a decade of Nokia smartphones with Symbian operating systems, doing almost all these things that Apple is now 'innovating'. In the US market, astonishingly, many smartphones do not offer video calls, so while this is nearly decade-old technology, in the US market, Apple seems to be offering 'leadership' haha. In the US market, 5 megapixels in a camera is considered quite advanced still today (in Japan and South Korea any self-respecting cameraphone has at least 13 megapixels of resolution). The LED flash also has plenty of mileage in the US market, again advanced cameraphones like SonyEricsson's Cybershots, various Samsungs and yes, top end Nokias, have the Xenon type flash which is far more powerful.

But I know that, and you, our regular reader, knows that, but most US consumers don't know that. To them this iPhone 4 is an amazing improvement over what was clearly the 'best smartphone' last year, witnessed by the number of iPhone clones now on the market from the Androids on down. Apple has managed to create an alternate reality for the US market where it is seen as the inventor and innovator, not the copier. And in the US market, I am sure the iPhone 4 will sell well. There is a nice heavy market of iPhone 2G and iPhone 3G models that need to be replaced.

REST OF WORLD UNDERWHELMED

Beyond the USA, it gets more tedious. When Apple said they did the multi-touch and capacitive screen and sensors and app store, that all played well in Europe and Japan etc. But now? They roll out their new phone where the top feature is... video calling? Video calling? The last time videocalling was 'cool' was around year 2000. Just about anyone who has a 3G cameraphone made by European or Asian brands, has had video calling for at least half a decade. Truly underwhelming. And honestly, the service is so low among consumer preferences, that most analysts have stopped reporting video calling feature usage. Stopped reporting its usage. I found stats from the UK regulator for 2007, where only 1% of consumers were using 3G videocalls, even though most UK 3G services included an allowance of 'free' 3G videocalling minutes and the 3G penetration rate per capita in the UK in 2007 is about the level of where the US is right now. This, the biggest change Apple celebrates, is not going to be seen as a big improvement in Europe or Asia.

I was digging through my statistics resources and could not find recent stats on 3G videocalls from any of the advanced markets in 3G like Japan, South Korea, Finland, Sweden, Norway etc... Not even bothering to report them for many years. Literally, the industry lost all attention in videocalls already BEFORE the original iPhone 2G had launched haha..

But the part that will really annoy the carriers/mobile operators of Europe and Asia, is that Apple's video calling is not compatible with standard 3G videocalling. So now we have a weird fight against Metcalfe's Law (the utility of any network increases in the square of the number of the members of that network - ie a telephone network that has 8 users, compared to a network with 4 users, has twice the users, but 4 times the benefit to all members). So we have a 3G consumer market, globally with 600 million paying 3G users, most of whom have a 3G cameraphone that includes video calling ability. And Apple's proprietary FaceTime launches now, not even compatible with the 85+ million population of old iPhones, iPod Touch's and iPads, - FaceTime is only compatible with Apple iPhone 4, the first of which start to ship June 24. This is madness (to Europeans and Asians where literally hundreds of millions can do standard 3G videocalling, and all 3G carriers/operators have set up the 3G videocalling ability - they have even done the international 3G videocalling interconnects! so you can make 3G videocalls across countries and continents)

Then Apple touts multitasking and the LED flash and a paltry 5 megapixel camera resolution. Again years old technology. Apple seems almost to be drawing attention to the fact that it is behind on all these things. Its not that someone else points out that the emperor doesn't have clothes, its the emperor himself who yells, I have no clothes.

Apple celebrates 5 major changes to the iPhone line, and Steve Jobs proclaims this makes it the biggest improvement in the iPhone of all time. Yes, in the US market, each of those 5 changes has merit, because the US consumer has not yet experienced very advanced phones, by and large. But in the rest of the world, Apple is kicking sand in the eyes of its own loyal supporters. How can they now go 'celebrate' years old staples like video calling with the second inward-facing VGA camera, or multitasking, or LED flash with 5 megapixels in camera resolution. Its like suddenly a car manufacturer brags about its newest model having fantastic innovations of windows that roll down, and adustable seats, and an automatic transmission. Sorry, those were innovations in a bygone era. Today any car maker should be able to offer those as standard.

HD quality video recording is more current tech, but not bleeding edge. Many rivals can match that in similarly priced smartphones.

BUT THE DISPLAY IS MAGNIFICENT

So it comes to the ultra-sharp display. Yes, that can be cool, but now rivals offer 4 inch and even 4.5 inch screens - that have far more sharp resolutions than the iPhone 3GS (while not quite as sharp as iPhone 4). Is that really worth it to go iPhone? Again, sorry for bringing up Nokia (but I am ex Nokia and know the Nokia past product line-up and its phone features the best), but lets go back again and see who showed Apple a better resolution screen. The original iPhone 2G (and upgrade 3G and upgrade 3GS all) had a screen resolution of 480 x 320. The new 940 x 480 screen resolution is not quite 4 times as good (technically, its 3.9 times as sharp). Now, what was Nokia's next flagship phone after the original iPhone 2G launched in June 2007? The next Nokia top phone was the E90 Communicator (what I've often called the best Nokia phone ever and by far the best phone of 2008 - and certainly a far better smartphone than the iPhone 3G - something many industry analysts and phone review magazines etc agreed). So how was the E90 screen - it actually has two, as its a palmtop form factor - but the E90 Communicator main screen is a 4 inch screen - larger than the iPhone's 3.5 inch - and had a resolution of 800 x 352 which is 1.8 times more sharp than the any Apple models of that time, or even up to newer Apple models a year later.

So the original iPhone screen resolution was 'not perfect' - says Apple itself, because it has improved the resolution. The screen resolution is a very important factor to smartphones - says Apple as it selects the screen resolution as one of the five big changes to this latest iPhone 4. And who was the smartphone maker, who looked at the original iPhone 2G, and in less than a year, released a phone with nearly twice as sharp a screen? Nokia of course.. To see the future of the iPhone, look at an old top-end Nokia haha..

MILDLY DISAPPOINTING

To the rest of the world (where in Europe, Australia and advanced markets of Asia they have a long history of advanced smartphones) this could have been the 'great' iPhone. And it offers almost nothing. Bug-fixes only. A cosmetic face-lift (plus literal face-lifts and botox with the color bodies and the wacky colorful 'bumpers'). Apple could have gone for a significantly bigger screen, 4 inches to keep up with the Joneses, or push the envelope to 4.5 inches or even beyond. No, the screen seems pedestrian in size now at 3.5 inches. Obviously no cool sporty trimmed-down lower cost 'Nano' model. And no QWERTY. And I know I know, Apple will resist the QWERTY option, but if not a QWERTY-slider model, then give us something to go against the rising tide of Androids. 5 megapixel camera with LED flash? Apple is really not trying its best, when even Nokia's cheaper N8 gives us 12 megapixels and Xenon flash.

It won't mean that "nobody" buys iPhones abroad. But what it does mean - very periolously - that those foreign customers will be very easily tempted to consider a rival - an Android maybe from HTC or Motorola or SonyEricsson or LG. Or to see what the new Samsung Bada is like. Or check out how the Blackberry merges QWERTY with touch screens. Or see Microsoft's new Kin phones. Or go with the trusty Symbian Nokias, which after all offered 3G and MMS and video recording and 2 cameras and video calling (and 3G videocalling) and multitasking and an app store and TV out and folders and user-customizable home screens and 5 megapixels and flash (and on and on and on) - over 3 years ago. And Nokia still gives all those things most of us truly do appreciate - a QWERTY or T9 keypad as an option in addition to touch screen in many models, and the replacable battery, the micro-SD memory card slot, Flash compatible software, etc etc etc.

WAS YESTERDAY'S COOL

Apple was the hot phone in 2008 and 2009. Then came the rush of the Androids. Today over 60 models made by over 20 manufacturers - including 7 of the world's 10 largest dumbphone makers. The first market where the big Android invasion came ashore was the USA in Q1 of this year, and Android shot past the iPhone in the market share of new smartphones sold in Q1. Now in Q2, Android is increasingly invading major other markets vital to Apple, from Japan and China to Europe - and already today Android globally is selling at the same rate as the iPhone. And this while Apple's been around for 3 years and Android only half that. And most Android manufacturers have not had phones out for more than some months.

The iPhone 4 will be loved by Apple loyalists. It will be a very compelling upgrade for most current iPhone users with iPhone 2G or iPhone 3G models. For a short while in June-July-August of 2010, the iPhone 4 will hold its own against rival Androids and other smartphones, but this is nowhere near the great leap forward to keep the iPhone 4 the most desirable phone for the next 12 months.

I do think that Apple is now on a strange path to oblivion. The mobile industry is one where every time a given player has tried to do its own non-standard thing, the global standard version has won. Look at GSM vs all other digital standards like CDMA, iDEN, etc. Look at 3G, again the global standard, UMTS, also known as WCDMA which totally dominates over the rival 3G standards CDMA2000 and TD-SCDMA. Look at the success of SMS text messaging or MMS multimedia messaging etc. There has to be a standard, and it to be offered on an interconnecting principle. Japan has had the world's most advanced mobile phones for more than a decade, but they do them on proprietary standards and they have not been able to turn that leadership into global success.

Yet Apple comes at us with ever more control and limitations. The iPhone App Store has been having more troubles, the iAd platform as well, and now Apple forces video calling to be done on its devices only on its proprietary FaceTime solution. Apple seems to be headed to an ever tinier circle of Apple fanatics with non-standard parts, non-standard apps, non-standard solutions, and annoying all partners along the way. Look at its very public fight with Adobe for example around Flash. What is the hassle now with Admob? (I only saw the headline, it seems like yet another battle, like earlier Jobs saying he wants to be the thought police for the world, to make sure there is no pornography on the iPhone and its family. Imagine the iPad, how obvious it is as the delivery platform for Playboy and other adult magazines. If Apple won't let adult content in, then rival tablets will take giant leaps ahead in market share. Didn't we learn this lesson already with video rentals?) And look at how long Apple fought against MMS - now it lists MMS proudly as a major feature in the 'short list' of top features for both the iPhone 4 and the iPhone 3GS.

AND THE APP STORE

(I am sorry, I accidentially deleted these two sections when moving the article from PC - I was editing this on the plane - to the blog). So lets talk App Store and Videocalls part 2. First App Store. Even here the news is not good for Apple. A year ago they had the space almost all to themselves. Passing a billion downloads - now well past 4 billion cumulative and over 2 billion level annually, the Apple iPhone App Store is the one with the most downloads. Yes. But the others are rapidly catching up.

GetJar has already become the second smartphone app store to pass 1 billion downloads. And Nokia's Ovi store is generating downloads at the level of half a billion downloads per year and ramping up fast. And many who were disillusioned with Apple, have been shifting development to Android, where they have similar types of handsets but not the restrictive Apple rules. So if the App Store was a competitive advantage for Apple, it is finding a ton of strong rivals as most app stores (there are over 30 of them already) are still in early launch stages.

BUT APPLE CAN STUNNINGLY SURPRISE US

The one last thought I had, was back to video calls. I do want to make this observation. Apple has a knack of taking something people thought was hard to use (like PC operating systems, smartphones) or very poorly used (like smartphone apps) or seen to be in decline (like portable musicplayers like the Sony Walkman before the iPod) and turning it into a huge, unanticipated success. Videocalls have been around in 3G for a almost a decade. They have been underwhelming as a market opportunity.

I was quoted in Global Mobile on 26 Feb 2001 which wrote "Tomi T Ahonen, head of 3G business consultancy at Nokia, questions whether video services will be able to deliver anticipated revenues. The biggest service to disappear off the 3G radar screen is video telephony,' he said. Ahonen said that the application had, last summer, been expected to contribute 5% of next-generation revenues. This had since fallen to between 1% and 2% of revenues, he said."

So the industry has felt 3G videocalls are a poor opportunity. Perhaps Apple can revitalize this. I cannot see us all installing FaceTime, but it is possible that Apple manages to convince us to start to use videocalls, and the forward-facing second camera that most of us already have on our 3G phones.. Don't be surprised if Apple achieves this for our industry. But please mark my words, that 3G videocalls will always - ALWAYS - be bigger in total traffic and revenues, than Apple's proprietary FaceTime videocalls..

IN SUM

First, its the best iPhone ever. Clearly. And a big improvement. It will sell very well in America this next year. And it will be the very highly favored smartphone replacement model for any existing iPhone 2G or iPhone 3G user. A big market is 'guaranteed' for Apple, in the 30 million to 40 million range for the next 12 months.

But Android has 60 models by 20 manufacturers. Blackberry is bigger than Apple and once again, Apple yields the bigger QWERTY market to RIM, to Nokia, to Microsoft and to all those Android makers who are smart enough to include at least one QWERTY model in the lineup. Apple? When will you give us a QWERTY slider or folder iPhone? You have already admitted that one button is not enough. When will you go for that market - there are literally millions of Apple fans who want an iPhone with QWERTY but won't buy a non-QWERTY phone, so they now go with Blackberry etc... And Microsoft - a global giant corporation twice the size of Apple in annual sales, is now full steam in the game and has launched its first branded smartphones. And HP, bigger than Microsoft and Apple combined, the industry's biggest player - bought Palm and will turn that around to challenge Apple. And Samsung, the world's second largest dumbphone maker, launched its Bada operating system and has sold more touch screen phones than Apple every year since the iPhone launched. Samsung will soon sell more touch screen Bada based smartphones than all iPhones sold per year - this is inevitable within about two years, due to Samsung's far greater distribution and far lower price points and far wider product range. And then there is the gorilla in the room, Nokia and its Symbian and the best distribution, the best sourcing and of any handset maker, the world's best record for invention and innovation in smartphone design. Still today, inspite of all that tremendous success and hype around Apple (and RIM), Nokia's smartphones alone outsell the total annual output of Apple and RIM - combined. And this is before we get the first 'iPhone killer' from Nokia, its N8, due out shortly.

The US market will love the iPhone 4 and will mistakenly think that is the cutting edge in smartphone design. Because of that, the iPhone 4 will sell very well in America and the local press and analysts will continue to praise Apple. Meanwhile the iPhone market share will continue to be flat for the year, falling towards the end of the year, and Apple's market share growth will indeed have stalled (as I predicted). Apple cannot get out of the market share trap until it spreads its design across more than one new model per year. Expect Apple to make announcements in that direction during the next 12 months. I am very sure the market share performance will be such a disappointment over at Cupertino, that they will finally admit that they have to go into a multiple models strategy (as I have been pleading them to do for nearly 4 years now).

Thats my first impression of iPhone 4.

Comments

[j47g]

your posts are very interesting. thank you.

however, I think you should reconsider your primary underlying premise that Nokia is the gorilla... while clearly true in terms of mobile phones, it's false in terms of computers and software operating systems and innovation. also, take a look at the two companies profitability and current balance sheets...? how much cash is nokia sitting on? what is FY10 expected cash flow? these are critical questions to answer when thinking about the future of the mobile phone market. to me, it will become increasingly a battle between google and apple. maybe microsoft if they can get their act together.

[Antoine RJ Wright]

And here I thought it was a good idea to simply post that I'm pulling my N95 back out. Mental note to go this route the next time (great piece as usual).Some thoughts as I read through...

Does Apple's marketing effots stem any of this possibilities for an inevitible decline?

Does the lack of UX smoothness on the side of Nokia/Samsung/HTC/etc. preclude them (still) from gaining mind share, even if they are gaining marketshare?

When does mobile UI move from "point and do" to "recommend and adapt?" It would seem that Google and Symbian see this coming, be Apple less so. Such a paradigm shift is what's next, can Apple adjust to that change with their current model, or will they have to change more than just offering more models in a gated community?

Thanks for the spark :)

[Dardo]

Tomi, while it's all correct what you say I think within one year Apple will sell more than twice it's sold the previous year. People don't mind the lack of features that much but they will notice the UI experience and be hooked to it. Apple is all about software and where they lose on hardware they gain on software. Nokia is good but they have slept the past 3 years and are far behind software wise, their upgraded Symbian^4 isn't even out for another year and by the time it will come out it wont even be compatible with any of the previous apps that ran on the previous generations. So.. while Apple is catching up hardware wise they have leapfrogged the competition software wise, although I really had hoped they would come out with a better home screen with live widgets like Nokias/Androids have and that could be one of the biggest selling point why I would consider a Nokia.

[Yap Choon Hong]

It seems increasingly apparent to me that Apple doesn't really care about being as feature complete as possible. They could have added everything in and compete with the others with a long feature list, but they don't. See how long it took them to come up with multi-tasking, 3G, video calls etc.

In the current industry, I can easily see why this is repeatedly used by critics to compare the iPhone with the others. Tomi you do this all the time. I used to be a Nokia fan (E61, E71, 5800, N97), but after switching to iPhone last December because I was fed up with the quality issues of N97, I begin to see why Apple has so many so called "loyalists".

It really does take the ease of use to the next level. I don't have to repeat all these here, enyone who have used the iPhone (including you Tomi) know it. Android is getting there but is not even close, in so many little areas here and there that it makes the whole experience different.

It tells me a few things. Firstly Apple is very detailed in everything. It seems like they like to perfect a feature (albeit in their version of perfection) before releasing it. It seems like they don't like to do what the others are doing - compete on whose feature list is longer. You will just have to see Apple's marketing to see the difference. Their emphasis is not on how many different features they have, but rather how a feature makes it easy for you to use the phone. Secondly, and perhaps more importantly, I think they still care about market share, but they are very determined to take it in their own way. They seem determined and disciplined enough to not follow the pack in cramming features, but incrementally improve the iPhone and make it as perfect as possible.

You just have to see Steve Jobs on live video to see how passionate he is about the thing he's doing. It seems to me that they are possibly the most idealistic company of them all, stubbornly clinging to what they think is the best way to do it, despite what others are doing and saying. You can say all kinds of things about them, but it is very apparent that they are just different from the others. It shows in their products.

Tomi, I know Nokia has had video calls for ages. And like you said, Nokia has had everything Apple has for ages. No doubt about it. But after using the iPhone, I realize that Apple makes it so much easier for me to use the features that I use it much more than before. I surf more, read more, buy more apps, play more games. You'd just have to see iPhone users' internet usage habits to see that they (and Android) tend to use the Internet more than the other smartphone users. This I think is really quite a key issue. You can have all the functions you can give to the users but there is no point if they don't use it. Case in point - when I started using Nokia, I am constantly amazed that Nokia N series users often don't know that their phone is a smartphone. A lot of my friends don't know for example their N series can install apps. They just buy it because it is the latest and best looking Nokia. That was then, and things have changed, but I'd like to argue it is Apple who brought about the awakening in users.

Tomi, Apple doesn't compete in the traditional sense. It might be good for you to change your perspective sometimes? Maybe you should try to use an iPhone for an extended period of time and see if it changes your opinion?

[kevin]

Tomi, you provide an interesting point of view. But your comments are focused on the way people have been thinking about cellular for the last 10 years. So I think you will be shown to be wrong about Apple, though it may take a year or two for market results to clearly demonstrate why. I'm absolutely not saying that Apple will rise to 70% of the smartphone market but I am forecasting that Apple will continue to gain a solid share over time with no more than two models (i.e., 4 and 3GS) on the market at one time. (A different color and different storage capacities are not considered by me to be a different model.)

I'm writing this to give you a little insight and perspective to consider; a view from outside the cellular world. Many of these things are already visible but people aren't thinking about how it all comes together.

As I've said before, Apple is building a platform, not just smartphones. It is focused on a deep convergence of mobile with the Internet and television, and thus, it goes beyond smartphones to both PCs and post-PC devices, such as iPad, iPod touch, and a future AppleTV.

iOS is the key element of the platform, and it is in itself just a variant of Mac OS X, so much of what is learned on iOS will flow back to the Mac (and vice versa). The Mac will evolve to include multi-touch but not by touching the display but touching a pad that will double as a keyboard.

iOS-based Apps tie all these devices together, including AppleTV and Mac, both on the developer side (a common development system to develop content - apps and media - for all devices of the platform) and on the user side (common content that can be consumed across all devices of the platform).

iAd will also be a key element, as it will further allow content (Apps and media) to be monetized, thus, bringing both developers as well as content creators (TV, movies, music, etc) into the platform.

HTML5 will be a key element in the Cloud-based open portion of the platform. Stuff that doesn't need to take advantage of local device capabilities can be delivered by anyone via Cloud-based services to the local device.

Facetime, although not a key element, doesn't use the standard 3G video chat because it's designed to go beyond 3G cellular standards. Apple will soon show it seamlessly extended to wifi-connected Macs and iPads and iPod touch and AppleTV. Since Apple is offering it as an open standard to standards bodies, it will also be on Windows PCs, Android phones, 4G LTE-connected devices, and potentially any device that has a camera, display, and a 802.11n/3G/4G network connection.

No one else is as far along in building this type of platform. Not Nokia. Not Microsoft. Not Google. Not Amazon. Not Samsung. Not HP-Palm.

Will Apple's platform model generate a solid smartphone market share, high user satisfaction, and be profitable (to Apple, App and Web developers, and content creators)? That's what we will find out over the next 2-3 years.

[Jason Grigsby]

I know you said not to nitpick, but two of your listed changes are wrong:

* "The iPhone for the first time comes in two colors, black or white."

The iPhone 3G came in black and white versions:
http://mobile.engadget.com/2008/07/13/black-iphone-3g-vs-white-iphone-3g-fight/

* "And yes, the one button design is also now history. Apple finally admits that the user gains a significant advantage out of some dedicated buttons, like standard volume controls for playing music. There are actually several buttons now on the iPhone 4."

There are no new buttons on the iPhone 4. Every iPhone has had a central button, volume controls, vibrate mode, and an off/sleep button on top. These are all the same on the new iPhone except the volume control used to be a single bar with raised ends for up and down whereas the new iPhone 4 has two buttons side by side that accomplish the same thing.

There was speculation before the launch that the volume buttons would control the camera as well, but I've seen no reports that they actually do that.

I don't think these are necessary to your overall argument, but they incorrect and since you highlighted them, it makes sense to correct them.

[Fernando Guillan]

Hi Tomi, great article. I fully agree with everything you said. To "change your perspective sometimes and suggesting maybe you should try to use an iPhone for an extended period of time and see if it changes your opinion" like Yap Choon Hong wrote in his comment does not make any sense to me. I think you are already changing your perspective all the time, since you are in a business that changes almost every single day.
With regard to use a iPhone to see if your change your mind. Change your mind about what? I bet almost all the people that posted before me are from the US. With all due respect I see a lot of Apple fanboys posting their comments in your blog. I am a Apple fanboy myself, since I have been using an iMac for quite a long time. But I do know the difference between being a fanboy and ignore reality and facts.
And if there is something your are good at, is facts. Who cares about current balance sheets and how much cash is Nokia sitting on? It is not about the money you have at your disposal(Microsoft could tell your a few things about it) and more about what you are going to do with it. It is not about the present, but about the future. And I do not see Apple growing market anytime soon.Not releasing only one phone every year. Apple is going to take punches coming from every possible angle. Punches coming from Android, from Nokia, Samsung,LG,etc. You name them.
And do not forget HP either, if they get it right they are going to be big contenders. Anybody knows that WebOS is better than iPhone OS, easier to use and with a far more polished UI. And please Apple fanboys do not count Nokia out of the game, they are getting back on their feet and we will see big products coming out within the next two couple of years.
Apple wants everybody to live in their walled garden. They do not allow your freedom of choice. If I want to use Flash on my device is my decision, not theirs. People do not like to be told what they can or can not do with their phones. I pay for it and I use it as I wish. But Apple will not give you that choice and that is the main reason people will consider other choices when it comes to buy a new phone. They forgot they are in business to please customers and not the other way around. You can criticize me all you want. Do not worry,I am not Apple. Just think for a moment, there is life outside the iPhone. And iPhone is no longer as trendy as it used to be. Only time will tell what the future holds. But I honestly think facts will prove Tomi right, like they did the last ten years. Thank you all.

[Yap Choon Hong]

Hi Fernando, I am refering to changing the perspective that focusing on features is instructive in discussing smartphones. I was a Nokia user for a long time, and switching to Apple changed my mind about what is most important about using smartphones. I suppose I was hoping the magic might rub off Tomi too.

I am certainly not saying that Tomi is wrong about his numbers. I have great respect for Tomi in his prowess as an analyst. I think one can change his perspective without ignoring facts? I suppose perspective is more about interpretation of numbers than purely looking at numbers alone.

Not sure if I like being called an Apple fanboy. But I suppose it might be true, seeing how I am more willing to look at things from Apple's point of view. Some times you have to keep your mind more open, and some things cannot be appreciated until you have experienced them.

[Timmy H]

I am sorry Tomi, I think this is starting to sound like shrill apology for Nokia and the wider GSM world. Apple came along in 2007 and very clearly defined the mobile internet. Android is copying them and BlackBerry is holding on for dear life leveraging messaging as their core skill. Everyone else is either dead or dying because they don't have the laser focus or the ruthless execution.

Apple even took an old GSM standard and made it fantastic - Visual Voice Mail - easily the best voicemail service around and other vendors have steadfastly refused to implement it.

So now to iPhone 4 - Apple will make a success of video calling and by using WiFi they make it work without users having to worry about the mobile worlds insane roaming charges.

Fundamentally Apple understand that an experience is about more than a laundry list of features - and I'm not sure anyone else gets that yet.

But if it is features you are hung up on don't you think these are pretty good; iMovie software, Gyroscope, Dual mics for noise suppression (this is a must have for mobiles now), iBooks.

Apple is killing the Smartphone market in the U.S., Canada, Australia and New Zealand. Perhaps Nokia is hanging on a bit better in Europe - but not for long I suspect.

[Tomi T Ahonen]

Hi everybody

Wow, 9 commments already. Thank you everybody, I will return here to reply to all. Keep the comments coming.

Tomi Ahonen :-)

[mark]

Tomi, you claim Apple will decline because they are providing old features (already done by Nokia) and because they are not providing more new features than the other manufacturers. But as you wrote, Apple did that in 2007 with the first iPhone, and again in 2008 and 2009 with subsequent iPhones. Apple has consistently lagged Nokia (and others) in providing hardware features. And yet doing just that, Apple has sold over 50m iPhones, with more than half in use outside of the US.

Has Apple since changed the strategy of 2007? No. Apple sold all those iPhones on the strength of its implementation detail, ease of use, and user education. Not hardware feature lists. We've seen this before with the iPod.

SO factoring out that reason, you've basically claimed that almost all those who want an iPhone (of the 3.5" touchscreen model variety) have already gotten one, so going forward, iPhone sales will mostly be replacement sales. What evidence do you have to support this claim?

[Tomi T Ahonen]

(will do replies in sets. This is first 5 comments)

Hi j47g, Antoine, Dardo, Yap, kevin

Thank you for the considered comments. I really appreciate the time and effort, many of you have been here before and I am very happy you find it worth your while to return and post comments. I will reply to each individually as is our custom here.

j47g - good point and I see where you are coming from. But remember, the factor in 'smart phones' is not the 'smart' part which we've had for two decades (PDA's including Apple's Newton) but rather the 'phones' part. Ever since smartphones were invented (by Nokia) within four years more smartphones sold than PDAs, and today smartphones outsell stand-alone PDAs by 20 to 1. So if we consider what is the 'gorilla' haha, then the phone gorilla is much more dangerous rival, than the PC gorilla (ie HP) or the software gorilla (ie Microsoft) both of which have been in smartphones for many years already but been bit players where Nokia dominates the smartphone space with 40% of the market and over 50% of the installed base. But yes, Microsoft and HP (and Google) are major 'gorillas' from rival industries - yet witness how poorly the Nexus One did, just being a gorilla in another industry won't give you much against Nokia in smartphones haha...

Antoine - thanks and great points yes. Really makes one think. I think to add to your thoughts, it does seem now, that Apple's innovation is to 'history' ie videocalls, multitasking, ever more closed system - where Google/Android, Nokia/Symbian/MeeGo etc innovatoin is towards future ie open source, Linux etc.

Dardo - good points and I much agree with you. In particular about feature overload. While Apple is stripped and very 'basic' in many hardware phone features, the classic big phone makers like Nokia, Samsung and SonyEricsson have traditionally been overloaded - stick every conceivable bit onto the phone, even where most people won't use them, and the clutter makes the phones very difficult to use. Its a balancing act definitely and nobody really does it perfectly (yet).

On the software 'leapfrog' aspect - think of all those who invested their video development on Betamax video cassettes and related services back in the 1980s of the VCR wars, or who did HD DVDs vs Blue Ray. The Apple iPhone App Store environment is a huge bubble currently, in overhype. Most app developers (on iPhone App Store) will never make a return on their investment. I repeat that. Most will never make a return on their investment. So as this is starting to seep into the developer community - there is a sobering up. Recently many developers have noticed that RIM and Symbian have far bigger smartphone market shares in installed base, and Google Android sells more currently than iPhone - shifting some of the development away from iPhone to those platforms. Then there is Java which is bigger in installed base than all Symbian, RIM, Apple and Android (and Windows Mobile and Palm and Linux Mobile etc) combined. The 'Apple advantage' in 'software' if you mean user-installed apps is a fleeting moment, that will suffer a severe bubble bursting soon. Severe bubble. That removes this advantage from Apple's side. I don't mean that all apps will disappear, I do mean that Apple will soon not be the prevalent smartphone apps development platform. It is currently Apple's mostly due to an early mover advantage and is fuelled by the measurements of irrelevant stats - the download stat vs real revenues and profits... Just like early internet stats and the inevitable bubble we had in 2000-2001 when web developers finally figured out that most websites will not make money, no matter how many 'eyeballs' you'd get..

Yap - we actually TOTALLY agree. Yes, I wrote before anyone had ever tried using an iPhone 2G, that it will be the easiest phone to use, and will change the whole phone industry, and judging by Mac, iPod and Newton history - argued that Apple will forever make the best user interface. We totally agree. And on the point, many Symbian smartphone owners don't even know they have a 'smart' phone ie that they can install apps - thats also true. But it is ALSO true for some iPhone users - who have the iPhone because it is easy to use (for showing pictures, surfing web) rather than for installing apps.. or because its the sexiest coolest phone ie its 'looks' rather than its 'smartness'. Its like in cars, an SUV (4 wheel drive Sports Utility Vehicle, what used to be called 'jeeps') - many who have an SUV never take it to the country side and don't need the 4 wheel drive feature etc, and just like the size of the vehicle whether to carry stuff like kids, dogs, etc; and/or like the perceived safety implied in a large vehicle. Just because all don't use the 'smartness' does not invalidate the phones and their ability for the future.

But also on the usability - the difference between the user friendliness of the iPhone 2G and the Nokia N95 is night and day. No touch screen on the N95, etc. But the difference on the iPhone 4 and the N8 will be FAR LESS. Yes, Apple will always be better, but its like Windows vs Mac. The Mac was better in every single edition, but Windows kept closing the distance, and soon became 'good enough' while Apple kept making the Mac the master of the PC user interface. Now Android and Palm and apparently early Bada (have not used, so judging by early reports) are very close to iPhone. Symbian is getting better, and Microsoft dumped Windows Mobile in favor of Phone 7 which again should be touch-screen optimized and far better than in the past. The rivals get more close. That means that for the random user, it is no longer 'totally different' but rather seems to be variations on a theme. One is better at something, another better at something else.. (as it should be haha, with competition haha..)

On competition - yes, I agree, like with the Mac, Apple gave up years ago trying to take Microsoft and 'IBM compatible' computers head-on. They said they are satisfied to have a smaller market share with loyal fans and higher profits. Yes, that is true - we agree - and Apple has been brilliant recently in expanding its 'platform' most obviously now with iPhone plus Touch plus iPad. But this blog is to inform readers about the digital convergence relating to phones and the fastest-growing industry on the planet. In the mobile race, it is relevant whose platforms have the biggest reach - for most of our readers are in the content, apps, developers, advertisers space, not in the hardware space (and obviously this blog is not an investment site haha). And for those readers, it is very relevant to know, whose smartphone operating systems will grow to be big, to avoid the costs of Betamax or HD DVD etc wasted investment..

kevin - hi, welcome back. I know your views are very deeply considered and I respect your insights. I am happy you came here to post your forecast bravely haha, and I also know from history, you are not afraid to come back to see what happens. We have a fair difference in view. I am now totally certain that the iPhone 4 is not 'good enough' to reverse the decline in market share which I first forecasted earlier. But either of us can be right (and only one can be haha) so we'll see. I do appreciate your logic, it is sound. But you also know the reasoning I've given in the earlier posting about 'iPhone has peaked' haha.. We'll have to wait till January 2011 to know.

A little point of contention - you said nobody was building the type of platform like Apple. I mostly agree, but now that Google did its Android stuff for TV, I think thats the start of a comparable strategy, and I think there were some announcements of PC makers (Lenovo I think) who said they'd do netbooks or tablets on Android (similar to iPad). So Android is to me starting to evolve into a similar platform 'beyond smartphones' like iPhone and its OS. But clearly its early going for Android.

Thank you all for visiting the blog and posting comments. I will return soon with more replies to the others.

Tomi Ahonen :-)

[Jason]

Hey Timmy H, can you let me know what part of New Zealand the iPhone is killing the smartphone market in? Over the last two years in NZ I have seen one (yes one) iPhone in the wild, I certainly wouldn't call that "killing" the market.

[Fernando Guillan]

Hi Yap, thank you for your reply. I am not Tomi´s lawyer, but wether you like it or not he is right most of the time. And this time he is very,very right. Please, I do apologize if you do not like being called an Apple fanboy.Going back to the iPhone, I am the proud owner of a iPhone 3GS, BlackBerry Storm 2,Google Nexus ONE and Palm Pre. Some people like to gamble and I like to spend some of my money in phones, smartphones,etc. So, yes... I do appreciate the iPhone because I have experienced it.
And the same can be said about the other smartphones I own. So as you can see, I am very open minded when it comes to smartphones. Before I say something, l like to know what I am talking about by putting my money where my mouth is.That is why I tested all this phones thoroughly and I am still doing it. And with all due respect calling "magic" the iPhone user experience is going too far. Walt Mossberg from the WSJ and David Pogue both of them agreed that WebOS is better than iPhone OS. So if the iPhone IU is "magical", like many times Steve Jobs repeated over and over at his Keynote presentation. What can be said about the WebOS ? I leave it to you, to describe it.
Without any doubt, the WebOS is the winner. It feels like you have been using it forever. Now, with the big pockets of HP behind them we can expect nothing but a huge improvement in WebOS and hardware quality, which is the main problem with the Palm Pre.
But you have it easier to see my point, just look at the replies from Tomi to the first five posts and then everything will come together. Thank you Yap for your time.

Hi Timmy in your post you wrote:

" Android is copying them" Well, if this is true then Apple copied all the other manufacturers(especially Nokia) when they first released the iPhone 2G.

"BlackBerry is holding on for dear life leveraging messaging as their core skill". Well, well. Do I have to remember you that BlackBerry sell way more phone than Apple. Is that holding on for dear life to you? Is funny how you praise Apple for their laser focus on their OS and then go on criticizing BlackBerry for their focus on what they do best.It seems to me you have to set of rules, one rule for Apple(where everything they do is perfect) and then one rule for the other companies.

"Everyone else is either dead or dying because they don't have the laser focus or the ruthless execution" This is total nonsense. I would appreciate if you post something here, at least get a little bit informed before you do it. I suggest you "google" it and then copy and paste. That should be fine with you, since this is what Apple has been doing for a while with Nokia.

"Apple is killing the Smartphone market in the U.S., Canada, Australia and New Zealand. Perhaps Nokia is hanging on a bit better in Europe - but not for long I suspect" This is it, after reading your last quote I do realize you are ill informed and that you have no clue what you are talking about. Even worst is that you do not have a piece of evidence that supports what you wrote. " I suspect? " Give me facts, not feelings. It seems to me what your wrote is "magical". Oh yes, Steve Jobs word of choice. Just remember magic is a trick. And sooner than later, Apple needs to change because the word "magical" will not be enough to help them sell more iPhones. This is what is all about anyway.
Thank you all.

[weiphi]

Hi everybody,

first I'd like to say I really like Tomi's blog! Reading his posts AND the comments from the guys here gives me insights for free I usually have to pay a lot of money for ;-)

Regarding, this discussion I fully agree with Kevin: the main issue why nobody "gets" Apple and why no one has produced an "iPhone killer" (can't hear it anymore :-) yet, is that mobilistas don't fully get Apple! If you only look at Apple with "mobile only"-eyes you don't see the full picture.

It's exactly about Apple building a platform, like Kevin pointed out. That's why they hint at soon having 100m "iOS devices" not "mobile phones". That's why FaceTime suddenly makes a lot of sense, not as an attempt to displace 3G video chat, but as an alternative to Skype, from mobile to desktops (and probably to the 2nd iPad next year). For this to work seamlessly, you need an IP-based video chat not a 3G based one. And that makes your entire product range more attractive (laptops and phones). And Metcalfe doesn't have to worry either :-)

That's also why iAd could be disruptive. Anyone see that during the keynote? They project to have halve the US market for mobile display advertising in 2H 2010! I wouldn't be surprised if they added another 0.5bn USD revenues by the end of next year through iAd alone. It's not called "mobile iAd"...
(btw, that's why they won't suddenly NOT charge iPod users for OS-upgrades anymore)

And look at the ecosystem! Look at the established connections Apple has with content providers for music, video, books, magazines, games (even though most of them hate Apple :-) Which other company comes close? Sony maybe, but as I've written before, they seem to be going nowhere slowly.

Apple is a converged company in every sense (software, tech, content...) and very few people get that. If you look at Apple from only your own industry, it's hard to see. "hey we sell more PCs than Apple", "hey we invented the smartphone years before Apple", "hey we know more about books than Apple" etc. All true, but Apple doesn't stay in only one industry.

Therefore it really doesn't matter at all how many megapixel the new camera has :-)

[Tomi T Ahonen]

(second set of replies)

Hi Jason, Fernando, Yap & Timmy

Jason - thank you for the corrections, I'm sorry for the inaccuracies..

Fernando - thank you for the very kind sentiments and yes we obviously agree. On the iPhone, the moment they give me a QWERTY version I will be there, but I am so addicted to SMS - and can of course send SMS text messages one handed and blind - the current iPhone with only touch screen text input is not good enough. Not for those who send tons of messages per day (for those who are not regular readers of this blog, the average number of messages sent by the busiest top third of US teens is... 100 per day. That is not weird, it is a global trend we've reported here on this blog and in my books from the UK to South Korea.) If you do 100 SMS per day, the only phone you will use is one with QWERTY...

Yap (second comment) - hey, don't worry, you are VERY welcome to this blog and am happy we get enlightened comments also from fans of some particular phone brands, like Apple, Nokia, Palm and Android in this thread so far haha... You have been very respectful, I certainly was not meaning to be derisive of you and many intelligent fans of Apple products who have recently commented here. I was just worried, that as I blogged about the 'megapixel gap' haha in camera resolution, in the past it has brought the wrath of fanatical Apple loyalists, crucifying me for picking on irrelevant details. As the 5 megapixel count was one of the big 5 news that Apple celebrated, I wanted any possibly 'passionate' (haha) Apple fans to bear that in mind.. I really appreciate the tone of the discussion here, from all of you guys.

Timmy - thanks for the comments, and there is certainly a 'danger' that those who have been around in mobile for a long while are stuck in an old way of looking at the world - similar to how train operators looked at airplanes, thought they were still in the 'train' business and did not understand they were both in the long distance travel industry, and airplanes decimated most passenger long distance train travel..

With that said, its equally possible, that Apple is attempting to use an 'obsolete' business concept from the PC era - something Apple has done in the past, look at the Newton PDA for example - and not understanding that the Mac PC, the iPod Touch and iPad are all tools of the '6th Mass Media' internet, where mobile dumbphones and smartphones are tools of the '7th Mass Media' mobile. The early versions of the iPhone clearly illustrate a good understanding of the 6th medium, and a near total lack of understanding the economically already far larger 7th mass medium - from not supporting ringing tones to not supporting MMS to not supporting downloaded apps to not supporting 3G videocalls (all these 'faults' in the original iPhone 2G obviously, all have since been fixed).

If this is the case, your argument turns on its head, the 'inevitable' winners are those who understand the younger newer paradigm - remember the close systems that Apple insists using, and the open systems that for example Google and Nokia support - I think your argument can definitely cut both ways. Don't you agree? Only time will tell which concept is 'obsolete' haha, and who 'really understands' that future correctly.

On 'Apple changed everything in 2007' - I totally agree and you might not know, but I have blogged about that since BEFORE the iPhone 2G launched. We totally agree.

As to 'Blackberry holding on dear life' and everybody else being near dead - here you are simply mistaken. RIM has grown unit sales and market share consistently - Apple has yes grown unit sales but at a lesser rate than the industry growth, and Apple has lost market share since its peak in Q3 of 2007. RIM has grown, Apple declined. Who is holding for dear life? And all others (apart from Google) in severe pain? Nokia also grew unit sales and market share since Apple's peak. Again the pain is not in Nokia's corner, the opposite is true, Apple lost market share (slightly) to Nokia's gain in the past 3 quarters since Apple's all-time peak.

You may be following the reporting of Admob stats (which are mistakenly reported as market share of handsets) or perhaps you've seen the reports of US market share, where the iPhone has indeed shown growth vs Blackberry (and vs Nokia obviously). I am talking of global numbers here.

Finally on 'iPhone killing in market share in US, Canada, Australia, New Zealand' - you are partially correct, on half of those countries. In the USA and Canada only - the iPhone is the second-bestselling smartphone (behind Blackberry). In both Australia and New Zealand, Nokia strongly trounces the iPhone. There are some markets outside of the USA or Canada, where Nokia is not the best selling smartphone - in Japan and South Korea the domestic maker brands rule. In South Africa and Venezuela, strangely, Blackberry outsells Nokia. In the rest of the world - about what, 200 countries or so - Nokia is the bestselling smartphone. Apple's iPhone is not even close. You do know, I hope, that last quarter when Apple sold 8.75 million iPhones, their best market was the USA, where they sold 2.7 million. That leaves them with 6.05 million for the rest of the world (one million of which was in China for the Chinese New Year's gift-giving). Nokia sold 21.5 million smartphones, and no more than 1.5 million in the USA (probably far less than that) giving Nokia about 20 million for the rest of the world. So its 20 million vs 6.05 million. Thats quite a whipping. What country did you say Apple beats Nokia haha...

Thank you all for writing, come back please for more discussion.

Tomi Ahonen :-)

[em]

Thanks again, Tomi and all the participants. Really enjoying it!

I'll like to add a link to Wikipedia page discussing lucky and unlucky numbers in Asia (Click name below to go to the page). I am not sure how this will affect on sales of the iPhone 4 and other phones, like Nokia N8. This is partially fun and partially really serious, to understand the culture in a country you are doing your business.

[Fernando Guillan]

Hi em, please I do not see the link to the Wikipedia page. I find what your wrote very interesting. When it comes to business you can not rule anything out. Please can your provide us with that link. Thank you.

[kevin]

Hi Tomi, Thanks for your response.

Note I said "No one is as far along in building", not "nobody is building." In fact, I believe Google, Nokia, Blackberry, and HP-Palm recognize what Apple is doing and have already chosen to follow the same platform path. All of them are just much further behind Apple.

In your reply to Timmy, you note that the platform model might be wrong, and I agree it won't be proven for 2-3 years. But I want to point out that the platform model isn't tied to PCs; it's tied to having highly-valued common content - media and applications. Microsoft owned the most highly-valued content on PCs - namely the Microsoft Office application suite, and Windows as a platform for millions of apps - and it increased its dominance.

As this content is moved into mobile via smartphones, the platform model should make more sense. For the billions of people who still listen to music and radio (now in podcasts or streamed), still read books, still watch TV and movies, and still use apps and Internet, Apple is aiming to allow them to buy content once, and safely and super-conveniently use it across all devices in its platform. (The Internet or cloud has replicated some local apps and content; that's Google's angle. But I think there are still many capabilities that for the foreseeable future, won't be done well or safely in the cloud, and are hampered by limited comm bandwidth.)

Looking historically, the cellphone started out as a purely mobile voice communications medium. Then mobile data communication (text, photo, video) was added. Now the smartphone adds more mobile content - both information and entertainment.

As for Android as a platform, there are questions.
1. Google has indicated that its long-term platform is web-based Chrome, not Android. It's not clear what this really means for the future of Android.
2. Google doesn’t allow Android-based tablets/netbooks access to Android Market. So those aren’t yet part of its platform. It's not clear if this is a temporary restriction.
3. Google allows carriers and handset mfrs to decide on implementing Android upgrades or not. Many have chosen not to and let even 6-month old models languish. It's hard to build a platform that way.
4. Android doesn’t have an integrated easy-to-use media content component. Google is still at the starting gate on music, books and tv. Even Nokia is ahead with Ovi.
5. Android doesn't do user experience details; read the reviews. For example, there are longstanding issues with lags and response to touches. Not clear if it’s just Google lacking focus since it gets no direct revenue from Android, or whether it’s an issue of hardware/software integration across so many hardware sets. In either case, Google keeps adding new nice-to-put-on-a-checklist features but not showing much improvement in user experience quality.

[kevin]

One more post as I noticed that though I disagree with Tomi, I've yet to put my forecast on the record.

Tomi's bottom-line, no-excuses forecast: "Meanwhile the iPhone market share will continue to be flat for the year, falling towards the end of the year, and Apple's market share growth will indeed have stalled (as I predicted)."

My opposing forecast: Apple's 2nd qtr will look flat compared to its 1st qtr (but still a gain compared to last year's 2nd qtr). Then Apple's market share will rise to about 19-20% or more of the global smartphone market in the 4th qtr.

iPhone launched in 2Q07, so 2Q08 is the first quarter in which one can do a year-over-year market share comparisons. Since that time, or 8 quarters, out of the big six smartphone mfrs - Nokia, RIM, Apple, HTC, Samsung, and Motorola, Apple is the ONE AND ONLY ONE to have year-over-year smartphone market share growth in ALL EIGHT quarters (using either IDC or Canalys global smartphone sales figures). All the other mfrs have shown declines in one or more y-o-y quarter comparisons. With the new iPhone 4, I believe Apple's unmatched growth string will continue.

If I'm wrong and Tomi's right, I will come back and eat crow, and acknowledge that Tomi's wisdom includes Apple.