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Apple leads smartphone wars... for how long?

Posted: 06 Oct 2011 ?? ?Print Version ?Bookmark and Share

Keywords:smartphone? Android? LTE?

Apple Inc.'s iPhone line has pushed the company to the top of the smartphone business, easily surpassing long-standing players in the industry. However, the recently launched iPhone 4S proves the smartphone is no longer about big breakthroughs but in taking small steps forward.

Apple has reached a summit in what is becoming a mature smartphone market. Its biggest issue now is whether the rest of the journey is downhill. It rose from zero to king of the smartphone hill this year, largely on the strength of its realization in the iPhone that the handset is an open mobile Web browser and applications platform. Conversely, competition has become a game of adding incremental features and rounding out product lines, and the competitors are coming on strong.

'Other' is already the biggest player in the category with 20 percent market share and growing at 310 percent annually, according to the latest figures from IHS iSuppli. At number two to Apple, Samsung showed 600 percent growth and is nearly even with Apple's 18.4 percent share, the market watcher added.

It is not the first smartphone to have a dual-core processor, 8MP camera or 1080-progressive video support. That status has been handed out to its Android competitors. When the thought leader is making only incremental advances that largely catch up with competition, I think it says the thought leader is in trouble.

iPhone 4S

The iPhone 4S has a dual-core processor and 8MP camera.

Even iCloud, in some ways, makes Apple appear as the one catching up with Google's online offerings.

Indeed, we can expect it will be at least 2012 before Apple rolls out an LTE handset using NFC for mobile paymentsbig steps its Android competitors have already taken. That's probably the iPhone 5 a year from now, equivalent to a two year old high-end Android handset.

It's also worth noting Apple has not released a low- or even middle-end smartphone. That's not the game as Apple plays it. Unfortunately, for Cupertino, market watchers agree most of the smartphone growth for the next two years will be in those mid- and low-end segments where Apple won't play. Others see this, too.

"We expect Apple to continue to maintain its momentum in the smartphone market in the third quarter and beyond," said Francis Sideco, senior wireless analyst for IHS. "However, Samsung has been coming on strong during the last few quarters, driven by its participation in both the high- and low-end smartphone segments. One of the key indicators of how the smartphone competitive landscape will evolve during the next six to 12 months will be whether or not Apple will continue to stay exclusively in the high-end market."

Also strategic is the way Apple is providing ease of integration across iOS devices with its iCloud services. Buy an iTunes song on your Mac; it appears on your iPhone. Buy a book on your iPhone; it's available on your iPad. This is the sort of thing Apple does better and it is bound to attract users with Android devices from multiple vendors that don't work together nearly so wellif at all.

global smartphone shipment

No doubt, Apple will gain some growth from such smart user-centric software integration. However, it cannot hold off the Android herd forever. And we have yet to see what Nokia and Microsoft will come up with in the next few months. I don't expect to be blown away, but they have the clout to create an ecosystem that grabs a slice of the expanding mobile pie.

The Kindle Fire could be the first to eat into the iPad tablet franchise in a big way. If Amazon buys HP's WebOS group, its appetite will grow considerably. Apple can't use court actions to keep Samsung Galaxy iPad-alike devices out of all markets indefinitely.

I see Apple riding the crest for a few quarters then slowly riding the downward curve awhile, unless it can grab one more brass ring and define yet another major digital consumer market in say 2015 or so.

iTV, anyone?

- Rick Merritt
??EE Times

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