The Smartphone Wars
by Walter S. Mossberg
Posted on April 10, 2009 at 11:08 AM PT
The handheld computer is the new PC–the most exciting, promising new platform for running software and connecting to cloud-based services. What do I mean by a handheld computer? Well, it could be one of the new generation of super smartphones, like Apple’s iPhone–which pioneered the new generation–or phones powered by Google’s Android operating system, or the latest BlackBerries from Research in Motion. Or, it could be a small tablet powered by the iPhone’s OS and user interface; by Android; or by other competitors, like Palm’s new webOS.
What I don’t mean to include in this new class of devices are netbooks running Microsoft Windows, which are just fine, but are really merely small, cheap laptops. Nor do I mean to include the tens of millions of older, less capable, phones labeled “smartphones,” which can be a slippery term.
These devices, like the Palm Treo, older Windows Mobile phones, or older-model BlackBerries, were breakthrough products in their day. But they use wimpier operating systems and less capable hardware than today’s new class of smartphones. They do run third-party apps, but these look primitive compared with, say, an iPhone app.
A battle is shaping up in the next few years to see who will dominate this new handheld platform–who will attract the most users and third-party apps?
So, here’s a quick snapshot of the strengths and weaknesses of the main combatants in the war for the handheld platform.
Apple
Strengths: Having defined this new class of handheld computers, Apple has a huge head start, with 30 million modern devices running a powerful and attractive operating system. That includes 17 million iPhones, plus Apple’s secret weapon: 13 million iPod Touches, which do almost all that an iPhone does, except connect to the cellphone networks. Apple (AAPL) also has an easy-to-use app store, which is now estimated to hold over 30,000 apps that have been downloaded over 900 million times in just about nine months. The iPhone also offers wireless synchronization via MobileMe and Microsoft Exchange, and has had terrific marketing. And rumors persist that Apple is working on a cheaper iPhone, and/or a larger iPod Touch, in a tablet format.
Weaknesses: Apple has three key vulnerabilities. First, there are millions of people who prefer a physical keyboard, which the iPhone and Touch lack. Second, at least in the U.S., the iPhone is tied to a single carrier, AT&T (T), whose 3G network is still lousy in some major areas. Finally, while the iPhone’s $199 price has been good enough to make it a hit, people in a deep recession might respond better to a lower price, even if it was for a stripped-down lesser model.
Research in Motion
Strengths: The BlackBerry is an icon, beloved by many, with a large installed base estimated at over 50 million. The company has made progress in migrating the BlackBerry to consumers from corporate IT departments. It understands the importance of software, and has launched its own Apple-like app store, with a decent initial selection. It has a robust marketing campaign and is available from multiple carriers. Most models have physical keyboards.
Weaknesses: The new BlackBerry app platform leaves out much of the installed base; it only works on BlackBerry models introduced after the fall of 2006. RIM (RIMM) stumbled with its first touchscreen BlackBerry, the Storm. And its app store, and the apps themselves in many cases, are clumsier and less polished than the iPhone’s. Most of all, the BlackBerry desperately needs a major user-interface overhaul. Email addicts who know lots of shortcuts love the UI, but it’s very dated for a world where the device must do more than email. There are way too many clicks, steps and menus, and the browser is still weak. RIM has just hired a new user interface guru who worked at Apple and Microsoft, so it apparently gets this problem.
Microsoft
Strengths: Windows Mobile has a large installed base, with many developers who created lots of apps for older versions of the software platform. Microsoft (MSFT) also plans an app store. The company has also launched a wireless synchronization service for consumers, called My Phone. Unlike Apple or RIM, Microsoft has a horizontal strategy, which places its platform on the hardware of numerous handset makers and carriers. The operating system can work with or without a physical keyboard.
Weaknesses: Windows Mobile is old. It is less powerful than the iPhone OS or Android, and has a user interface that needs a major redo. The company laughed off the iPhone phenomenon, and is now late in catching up. A minor new release is planned for this year, but Microsoft is racing to do a complete overhaul of Windows Mobile, called version 7. Unfortunately, that won’t be out till 2010. The new app store won’t work with current versions of Windows Mobile.
And, currently, Windows Mobile lacks a killer hardware device. The best Windows Mobile phones today are models from HTC that feature HTC’s own software, which works to hide as much of the hidebound Windows Mobile user interface as possible. It isn’t clear that apps built for the HTC user interface will work properly on regular Windows Mobile phones, and vice versa.
Strengths: Android is modern and powerful–different from, but in the same class with, the iPhone OS. It has an app store, and excellent wireless synchronization with Google’s calendar and contacts. Like Windows Mobile, it’s a horizontal product, which can be used on numerous handsets and even tablets or netbooks, some of which are rumored to be in the works. It will be available on multiple carriers, and can work with or without a physical keyboard.
Weaknesses: The first Android phone, the T-Mobile G1, was clunky and didn’t set the world on fire. The Android app store has so far attracted surprisingly few apps compared to Apple’s at the same stage. Some users might balk at the tight tie-in with Google (GOOG). Handset makers can build Android phones that aren’t tied in to Google services, so it will be important to see how these variants fare. Another problem is that, as versions of Android diverge among handset makers and carriers, app developers may face a compatibility challenge.
Palm
Strengths: With a slug of venture capital money, and the leadership of an ex-Apple exec, Palm has reinvented both its software and hardware, after allowing them to grow stale. The new Palm Pre and its new webOS, which will launch this spring, have impressed those who’ve seen them, and appear to have a real shot at competing with the iPhone and BlackBerry. The new platform is built for wireless synchronization and third-party developers, and, unlike the iPhone, and some planned Android models, the Pre combines its touchscreen features with a physical keyboard.
Weaknesses: Even if the phone and OS are hailed once reviewers test them, there are many business issues for Palm (PALM). The company is running on fumes, financially, and its launch carrier, Sprint (S), is hemorrhaging as well. That could make it tough to subsidize the Pre enough to compete on price with the iPhone and BlackBerry, especially if Apple does a cheaper iPhone. In addition, Palm will have to mount a costly marketing campaign to match the advertising machines of Apple, RIM and Microsoft. And it may need financial incentives to tempt developers to write apps for the Pre.
Nokia
Strengths: Nokia is the world-wide leader in cellphones, including smartphones (by the loose definition of that term.) It understands that software and cloud services are key, and has launched an online service called Ovi. There are many older apps already for the Symbian operating system that powers most Nokia models, and Nokia (NOK) is working on an app store. The company is good at hardware, and has huge brand loyalty, at least outside the U.S. And its best known smartphones have physical keyboards.
Weaknesses: Nokia’s software has been inferior to Apple’s and Google’s. To fix this, the company has handed off Symbian to an open-source consortium with a complicated structure. That could make Symbian, and thus Nokia, less nimble than Apple, RIM or Google. Some of Nokia’s competitors will also be using this new Symbian, attempting to differentiate their products with user interface and feature differences. Thus as in the case of Android, there’s a danger that, if variations of Symbian diverge too much, application compatibility could become a problem. The company also has historically been only a minor player in the very important U.S. market.
Comments
I’m biased, admittedly. But it looks like Apple took a very good SDK and made it much better. The App Store simplicity appeals to users the same way iTunes did – and will lead to Apple domination in yet another new market.
Posted by Brendan Walsh at April 10th, 2009 at 11:51 amIt’s amazing that competitors can’t take better advantage of their second-mover status.
Trust me, a master develop who always write software that deliver us into a better future instead of just following the leader. Get an iPhone, load it up with iPhone SDK, and join me in writing software that deliver us from today to a promising tomorrow, leaving the others behind.
Posted by James Chau at April 10th, 2009 at 1:11 pm“in the very important US market”. Important to whom? Perhaps not to all manufacturers: out of 2.2 Billion cellphones in use in the world (see http://www.infoplease.com/ipa/A0933605.html), The EU and China each have more than double the users of the US. Yes, US comes next, but Russia follows with slightly more than half of the US users.
Posted by Stewart Midwinter at April 10th, 2009 at 2:42 pmA key issue for the US market, carrier control of apps. AT&T didn’t control iPhone apps while many of those platforms are controlled by carriers.
Posted by Mary Lynn at April 10th, 2009 at 4:25 pmFor example, you cannot run GPS apps on many of those phones unless you are blessed by carriers while you can run pretty much everything on iPhone with no restriction.
Mr Mossberg, you missed one! Mobile Java is not dead, Sprint has released the only really open next gen smartphone OS. It is Java CDC with OSGI. This same OSGi that powers the big Java servers that drive the net. Apple, Google Symbian have all left the mobile device as a dumb client. OSGi on the mobile brings the same power (including a managed web/app server on the device) as IBM Webshpere, Sun, BEA , Oracle, Eclipse etc… to mobile. It allows UI development in the browser Javascript, in Flash, JavaFX or eSWT. All of the other players treat the mobile as “special” (limitied) and restrict its power. OSGI (as proven by Sprint Titan) unleashers the full power of a computing node at the edge of the cloud using the same technology as the rest of the cloud!!! you should really take a look. As the father of mobile Java I believe this is the real next generation! Open, Standard, and a true network node! And totally independant of the OS (as it should be!)
Posted by jon bostrom at April 10th, 2009 at 6:27 pmdeveloper.sprint.com/Titan
Jon Bostrom “father of mobile Java”
That URL should be:
http://developer.sprint.com/titan
Posted by Mac Beach at April 10th, 2009 at 6:58 pmI can never tell who is the most clueless: Ballmer-Windows or faceless suit-RIM. But it doesn’t matter, because neither company has the corporate mentality to build “insanely great” products.
Posted by David Owens at April 10th, 2009 at 9:05 pmMaking tiny little changes to tiny little keys is not innovation. They and their ilk are follow the leader catchup wannabes. Microsoft should stick to bloated, virus prone software, and rim should stick to email. There are millions of Laurens out there who will love them for it.
I have great respect for Apple and Microsoft because both contributed a lot to the world thru innovation and value. Rim does seem to be rather opportunistic in its approach and seriously lagging in both its OS and their ability to innovate.
Posted by James Chau at April 10th, 2009 at 9:33 pmMeanwhile, I’m planning simply to keep my Treo 680. It does what I want as a multi-purpose device, has the right screen size for eBooks, doesn’t require buying all new software for a new platform, and…..it has a SD card slot, which seems to have gone out of vogue. Buying a Palm Pre, for instance—would simply mean I could do less than what I do now as a result. Here’s my bottom line: no card slot, not interested.
Posted by Mark Squires at April 11th, 2009 at 5:56 amGranted, who will dominate the handheld platform is part of this storyline, however, the untold part is the need for end-to-end IP backhaul network infrastructure that’s capable of supporting the additional Internet access traffic that these devices create. Most U.S. mobile network service providers have not built their networks to support broad adoption of these devices, and that’s a reason why any time iPhone users cluster at an event or conference they’re unable to access the Internet.
Posted by David H Deans at April 12th, 2009 at 6:06 amThe key to smartphone is the smarts inside the phone itself. Like a human being, the key to a smart person is the smarts inside the person himself. Take Albert Einstein for example. Human thinking is a process within a person. If a person knows a secret, for example, the secret formula for a drug that cures cancer without side effects, then this is a smart person. The problem with the Internet is it’s size. Without certain level of smartness, the Internet is a useless web of wires. A real smartphone allows it’s owner to capture, or synthethize smarts inside the smartphone itself locally enabling it’s owner to do very things such as figuring out just 3 sure fire winning numbers which can help it’s owner to multiply each dollar he bets 10 times, guaranteed. Now that is smart.
Posted by James Chau at April 12th, 2009 at 11:53 amJames Fisher from Sprint here. Sprint is hemorrhaging? Let me provide some clarification – have we lost customers in recent quarters? – Yes. Are we in some kind of financial straights that would impact a highly successful roll-out of the Palm Pre? — Not at all. We have the ability to pay all debt due through 2010, and financial analysts have echoed one another with reports that we have established a position of financial stability in a difficult economic environment. In 2008, the company achieved tremendous success in addressing core challenges with customer care, marketing and network perception, and our advances in those areas have been confirmed repeatedly by external third parties, including J.D. Power and Associates. The roll-out of the Pre in the first half of this year is another important element in our efforts to bring excitement and value to our customers as we rebuild our business, and we have the resources, enthusiasm and everything else it takes to make the Pre a winner.
Posted by James Fisher at April 13th, 2009 at 7:23 amI have a highly specialized group of expert developers who write smartphone applications. My choice platform is Apple because of the Mac/iPhone environment, there is no better and more robust environment in the world. The iPhone SDK running on the Mac is exceptional. I would consider the Nokia platform also when Nokia SDK becomes available purely because of the vast number of Nokia customers available in the global marketplace. I believe North America will be Apple-centric and the rest of the world will be Nokia-centric, especially when Apple and Nokia come out with laser antennas, transmitters and receivers, coupled with my NCN fingerprint technology which enables dynamic and instantial fingerprint identification and authentication, making the iPhone the device as the truly unique universal ID instrument. It is very hard to provide the detail in here, but our financial world is in great peril unable to stop pirates from hijacking high value electronic fund transfers because of SQL-injection and cross-scripting. My application can stop them dead.
Posted by James Chau at April 13th, 2009 at 8:30 amStewart Midwinter- the US may be a smaller market than the EU and China in the cellphone sector overall, but I’m willing to bet it’s a bigger market than either when it come to smartphones. There’s also the fact that even of the EU is still bigger- it’s actually 27 different markets bundled together- each with their own combination of carriers, governments and prevailing business models..
Posted by Harry Kelly at April 14th, 2009 at 7:45 am“In addition, Palm will have to mount a costly marketing campaign to match the advertising machines of Apple, RIM and Microsoft.”
That’s what Sprint is going to help with when they start advertising it!
Posted by Miles long at April 14th, 2009 at 8:01 amAt least we all agree that the clunky Windows Mobile is all but dead, thank goodness!
The problem with “cloud computing” is that high speed internet, wireless, and cell communications are spotty and unreliable in most regions. Letting someone else store your data becomes a headache in retrieval when you roam outside of coverage area. Why? Because communication services in the US are comprised of incompatible networks; duopolies and regional monopoly companies establish fences and subscriptions schemes to prevent real competition rather than cooperate to offer world-class connectivity standards. There is no good excuse why a country as rich as the USA doesn’t have GSM 3G cell phone coverage and 200+ Mbit/sec internet availability for every house and office.
The best thing that could happen is to see Apple offer its iPhone to all cell carriers and sell it unlocked/unsubsidized to anyone who wants to pay-as-you-go. Then at least all users would have decent handheld devices on their network of choice.
Posted by Mike Anon at May 14th, 2009 at 1:29 pm@James Fisher from Sprint here.
And I am Billy Mays from OxiClean
Posted by Wanton Zep at May 26th, 2009 at 1:56 amWe just signed a deal with the only company in the US to offer Dual SIM Quad Band GSM cell phones. All of the phones are unlocked. While the US has yet to catch on, they are very popular in international markets.
The direct link to the phones is http://bensbazaar.com/products/mobile-phones/
Posted by bens bazaar at May 28th, 2009 at 4:57 pmInteresting to look at the timeline of the Iphone related stats.
Two months ago Apple had:
30M iPhones
30K mobile apps
As of WWDC announcement yesterday:
over 40M iPhones
over 50K mobile apps
Is it me or the pace of growth at Apple seem to have accelerated?
Posted by Manny Valencia at June 9th, 2009 at 4:21 pmGood Old Days, Apple did it again: Competitors are comparing their newest models with Apple’s second string.
And Palm? Call an ambulance!
Posted by Mikkael Gueltekin at June 11th, 2009 at 6:36 amWhile alot of attention is paid to which smartphones will attract the most users and third-party applications, ultimately the user experience on mobile broadband networks will play an influencing role for what applications are the “winners”. If operators can’t fairly monetize the usage of their networks by these innovative applications, the return for ever-expanding network investments won’t be sustainable. A win-win approach will favor operators who enable developers to leverage network “hooks” to save development costs, differentiate their applications, and give subscribers an enhanced user experience. See more on this at Cisco Community Central https://www.myciscocommunity.com/community/sp/mobility/blog/2009/07/14/mobile-application-stores-what-s-the-operator-play
Posted by Brian Walsh at July 29th, 2009 at 1:20 pm