The handset industry has seen better times; it has seen worse times. These are changing times indeed for handset manufacturers around the world. The entry of iconic industrial design-driven companies such as Apple, and the (omni-present) Google into the mobile platform arena, have sure shaken many a top 5 player out of their growth slumber. Nokia's decision to buy out the remaining portion of Symbian that it did not own, and SE's decision to stop development of UIQ, ain't the result of a sudden change of heart towards open source. Rather, they reflect a measured response to Google's launching of Android and how Apple appears to be attracting an increasing number of developers, in spite of all its opaqueness on app selection. And with Google having created enough noise about open ecosystems, and the like, and mainstream and digital media eating out of Google's-PR laced hands, carriers and handset vendors could do little other than play to the gallery.
While most players are now coming to terms with the importance of UI and industrial design, however, what they have not factored in is the current economic slowdown, and how companies like Apple can impact their sales of high-end devices. Gartner's numbers for Q3'08 show the rapid rise of Apple even in a deteriorating economic environment. With close to 13% market share, to say that Apple has disproved many a traditional theory about handset sales is an understatement. Handset manufacturers, and carriers alike, have consistently espoused the need to have a wide portfolio; a portfolio that offers something for everyone. What they haven't realized over the years, and what Apple has, is the market opportunity for a device that offers a little bit of everything, but in a far more evolved manner than anyone else. Consequently, vendors have spent billions in building portfolios of devices at various price/feature points. Apple came in and disproved the portfolio theory with just one model (two, if you consider the 8GB and 16GB as separate models). Similar is the story when it comes to applications for the smart phone. Traditionally, carriers have exercised a strangle-hold on application availability for the smart phone. And they have ensured that developers are frustrated with the slow pace of approval (justified in part by the large portfolio that carriers need to test). And in this juncture comes Apple's App Store, offering a clear 70% revenue to the app owner, and a device that's currently selling like hot cakes. No wonder, App store has already seen over 300 M downloads in just over five months !
While handset sales across the world are slowing down inevitably in the face of retreating consumer demand, companies like Apple are proving that a compelling product can work against the macroeconomic forces. The iPhone may still flounder, after the initial fascination for the device worn out, however, what is here to stay are some of the lessons that they have brought out in the open...
