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Summary:

For three years, the Motorola RAZR handset has topped the U.S. sales charts. Word out of NPD today tells us that the story has changed and the phone market is playing a different tune. Apple’s 3G iPhone was the top-seller in the third quarter; clearly the […]

IphoneFor three years, the Motorola RAZR handset has topped the U.S. sales charts. Word out of NPD today tells us that the story has changed and the phone market is playing a different tune. Apple’s 3G iPhone was the top-seller in the third quarter; clearly the RAZR has lost its shine and it isn’t coming back anytime soon.

How could this happen in around 18-months? There are plenty of reasons how and why… here are three off the top of my head. Chime in with your thoughts…

1. Apple is a marketing machine. There’s no question in my mind that Apple is top-notch at marketing and advertising. Much of that credit has to go to their advertising agencies of course, but that doesn’t lessen the impact of great marketing. Instead of relying on carriers to send out the hip and cool message (is that even possible from any of today’s carriers?), Apple did what they do best and took the stage. Their television ads focus on the simplicity and many features of the iPhone, and they do it with you wanting to see more. There are very few ads I watch today thanks to the skip feature of our DVR, but Apple ads are the only ones I actually rewind on the DVR so I can watch them.

2. The iPhone did for software what the RAZR did for hardware. I remember when the RAZR first hit and I was blown away by the look and feel of the thin device with etched keypad. Motorola designed a masterpiece in terms of the hardware. But in the end, were there any amazingly new phone features? None worth remembering at this point. Fast forward to current day: Apple has achieved the same paradigm shift, but not with hardware. At least not solely with hardware, because the multi-touch, capacitive display is forward thinking. But it’s really the software that’s enabled such an intuitive and positive user experience. It’s probably more approrpriate to combine the hardward and software when talking about the user experience… and that’s not surprising because Apple follows this same, not-so-secret recipie for success in their Mac product line as well. Like the RAZR, does the iPhone offer any significantly new phone features? Nope, it pretty much functions like every other phone out there and compared to some handhelds, it actually has fewer features (think copy/paste and SMS). But it’s not the phone features that sell millions of iPhones. It’s the melding of simple hardware with easy to use software and the ability expand, extend and embrace the web that’s making it number one.

3. Apple never used the dreaded "smartphone" term. When I used to tell people that I carried a smartphone, most of them either didn’t know what it was or they thought they knew what it was and it was too complicated of a device for them. To some degree, it’s a matter of semantics and it’s all becoming a moot point anyway as the lines continue to blur between feature-phones and smartphones. Had Apple called the iPhone a "smartphone", I think it would have been harder to acheive the sales success they enjoy today. It would have disabled the entire simplistic usage that they show in their marketing campaign.

Is the iPhone 3G a perfect device? Not at all, which is part of the reason I didn’t upgrade from my original iPhone 8GB model. I’m waiting to see if AT&T will offer a 3G tethering plan for starters, so I can drop my $60 monthly EV-DO bill. Even if we see such a plan, I’ll likely wait for an improved processor in the device. I continue to use my iPhone for web surfing more and more as time goes on and I suspect that new iPhone apps will become more resource hungry as they hit the scene.

Clearly, the device itself isn’t for everyone. How could it be when everyone’s individual needs and requirements vary? Some need or prefer a hardware keyboard. Others use copy and paste features a dozen times day. Still others require [insert your feature of choice here] that the iPhone doesn’t have yet or won’t have at all. But by and large, like other Apple products, it offers features used by the vast majority and offers them in an efficient method.

Regardless of the phone you prefer or carry, there’s little denying that the iPhone has made a huge impact on the market. And it’s not just Motorola that’s getting kicked to the curb right now. When we last looked at the smartphone market, Symbian devices held 57.1% of it. According to Canalys, that figure in the third quarter dropped to 38.9%. Note that Canalys showed a Symbian marketshare of 51.4% in the second quarter; our look in the second quarter originally came Gartner numbers.

Regardless of the numeric specifics, the trends are clear: Apple is looking to displace Nokia in the market while RIM, Windows Mobile, Palm and now Android fight for second place. For any of them do that, I think they’ll need to steal a play out of Apple’s one-page play book: join the hardware and software together with synergy so that the total experience of the whole device equals more than just the sum of each individual  part added together.

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  1. yes, the use of the screen is clever, in that it allows one to drag the finger across the surface of the screen without having to put pressure on it and therefor fight the friction.

    the multi-touch, im not so sure about…

    as for the ease of use. as usual these days, that comes from reducing capabilities, and also locking down what changes the user can do.

  2. Apple is clearly in the lead for the time being, but there is always going to be a segment of users that really want real keyboards and I’m fairly certain Apple will never provide that. It may come out with some other advanced virtual keyboard, but that’s about the most anyone can hope for. Apple’s iPhone really needs an equivalent of RIM’s BES software. I can’t see how Apple can overcome this obstacle.

    On the other, most of the other handset platforms won’t be able to touch Apple’s Mobile OSX once Apple finishes it which will take another six months. Apple will eventually have the means to design it’s own chips which will make it harder for other platforms to compete in terms of specific processing hardware. I’m only hoping Apple will come out with the edge. I’m very surprised at how well the iPhone is doing with such a average piece of smartphone hardware.

    The RAZR was decent for it’s time, but Motorola became so lazy and greedy that they just quit designing any future handsets thinking that people would love it forever as it was. Apple isn’t like that and we should look for awesome iPhone follow-ups.

  3. I have owned the original 8GB iPhone since the day the price was dropped to $399 and I have not yet found the 3G to be a compelling upgrade. Apple could change my mind if the following two changes are made:

    1) Tethering plan, with a price <= $30 per month
    2) A 32GB model. This way I could take my entire audio library with me wherever I go. I think this would be great with the new Genius playlist feature.

  4. Theres really no comparison other than marketing. Motorola put the “small” in cell phone and Apple put the…well, marketing in it. Now, I’m not a big fan of the iPhone but I’m slowly warming up to it after I had a chance to play with a couple co-workers new “toys”. I replaced my Razr with a HTC PPC-6800 “Mogul” and love it. There is no comparison between it and my Razr other than it is better in every respect.
    My Razr had abysmal battery life too and it seemed to get worse with every…as few as they were firmware updates, but I still had to carry two extra batteries with me.
    In my opinion, the only things stopping me from getting an iphone are 1. AT&T, 2. The Price, 3. AT&T and 4. My wife. Oh, and did I mention AT&T?

    David

  5. You missed out the fourth reason: Apple telegraphed the release of the iPhone 3G well before its launch, effectively killing demand for the old iPhone and compressing an additional month’s worth of demand into the quarter.

    Which is perfectly fair, of course, and should be in the playbook for anyone wanting to have a “hot” launch with as big a quarter on top of it.

  6. Partners in Grime Tuesday, November 11, 2008

    4. The average user can figure out how to use it.

  7. Its all about usability. iPhone is the most Beautiful easy-to-use device and of course most Useful device I have seen in the recent years and I think this is the only reason it topped the charts.

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