Nokia recently announced its new 5800 Xpress Music, or Tube, as an “iPhone Killer”. Reviewers, however, disagree, mainly on hardware spec grounds – no touchscreen, S60 software issues.
What most reviewers seem to ignore is that even if Nokia (or Google, Sony, LG etc.) do come up with a device that matches the iPhone’s technical abilities (and I’m sure they have the required resources to do so) they’re still going to have a tough time competing with it.
Why? They way they sell and support their devices is very different than Apple.
When you buy an iPhone you have one company that control’s your entire experience with the device. From purchasing to ongoing operations and services its all ran by Apple that controls the entire product experience etc.
Apple bundles its iPhone with a set of services (AppStore, iTunes, Music Store…) that are tightly integrated with the device allowing easy consumption by customers which eventually is what’s driving Apple’s business.
Nokia, Sony, LG etc., on the other hand, sell the device through partnerships with different communication companies such as Orange Partner, which in turn, works with local sub-diaries. They rely on these partners for supporting their device and providing services to customers which often results in poor (sometime broken) customer experience.
Speaking at an Israeli GarageGeeks meeting, Steve Glagow, VP of Marketing Operations at Orange Partner VP mentioned that due to the fact they have to work with many regional and local partners, it takes more than 3 clicks and several screens for a user to install an application. Although he said their application installation rate is high (percentage of users who reach the application marketplace and end up installing an application) its a misleading measurement as most users will give up and never even reach the marketplace – only users determined to install an application will go through that effort.
Bundling your device with services is a winning strategy, not just for cellphones. Microsoft’s Xbox Live! platform is another great example on how bundling a device with online services helps increasing its value and perception.
Killing the iPhone will require more than just cool new hardware…