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Why the iPhone can't be 'killed'

By Brad Reed, Network World
July 01, 2009 02:36 PM ET

Network World - Every few months, some new hopeful to the smartphone market will garner enough hype where various media outlets will dub it an "iPhone killer".

The idea behind such pronouncements is that Apple's flagship device is ready to be toppled from its perch and that a new device is primed to take its spot atop the smartphone market. Every time the supposed "iPhone killer" hits the market, however, its sales come in well below the iPhone's sales numbers.

2009's summer smartphone blockbusters

Consider the Palm Pre, the latest major device to win the dubious distinction of being dubbed a potential iPhone killer. During the device's debut weekend in the United States, analysts estimated that it sold between 50,000 and 100,000 units. The iPhone, meanwhile, sold a reported 146,000 units in the two days following its first release in 2007, while the new iPhone 3GS has sold more than 1 million units over the first two days of its availability.

The team at Palm shouldn't feel too bad about their comparatively weak sales numbers considering that other similarly hyped smartphones such as the BlackBerry Storm, the Samsung Instinct and the Android-based HTC G1 have also failed to slay the iPhone. This may leave device manufacturers scratching their heads and asking themselves what they need to do to topple the iPhone. The answer, at least in the short term, seems to be "not too much."

Apple's big head start

When the iPhone took the cell phone world by storm two years ago, it was viewed as a revolutionary, game-changing new device that would alter how mobile phone users consumed data on their devices. In reality, the iPhone was merely the next logical step in Apple's quest to rule the world of wireless devices. After the company had scored big hits with its iPod portable music players and its iTunes online music store, adding a device with voice and data capabilities to its arsenal seemed like a natural progression. Gartner analyst Carolina Milanesi says that the iPhone's continued success in the smartphone market has as much to do with its relationship to other Apple devices and software as it does with its own capabilities.

"From technological perspective, there are devices out there that might have higher specs than iPhone," she says. "But there's nothing on the market today that pulls everything together to give the superior user experience that you get with the iPhone."

One area where Apple has gotten a big head start over its competitors has been in fostering the development of third-party applications and selling them through its iPhone App Store. Ever since its official launch last year, the App Store has sold more than 1 billion different applications and the store itself offers more than 50,000 different applications for users to choose from. Palm, by contrast, recently said that it was delaying the release of its webOS software development kit to the general public until the end of the summer, meaning that most third-party developers won't have the ability to create new applications for the Pre for at least the next couple of months.

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