The iPhone’s Other Killer App

Looking at the latest data on smartphone market share from research firm Canalys, it would appear that while Apple is doing well, RIM is doing better.


According to Canalys, over 41 million smartphones shipped last quarter, and of those Apple sold 7.3 million, up from 6.9 million a year ago, a 6.7 percent increase. That’s the good news. The bad news is for HTC, the only major smartphone maker to lose market share, down 5.6 percent, but the best news is for RIM. RIM sold 8.5 million phones, up from 6 million last year, a super-sized 40 percent increase. Based upon these numbers, it would seem logical to conclude RIM is the big winner among smartphone makers, but these numbers only touch the surface of the situation, or rather they don’t.

While conventional wisdom says the killer application for the iPhone has been the App Store, a new survey from comScore suggests that touch is quickly becoming the must have feature for smartphones. For the U.S., sales of touchscreen phones were up 159 percent from a year ago, an even larger increase than touchscreen smartphone sales, which were up 63 percent. Of the latter, the iPhone is the undisputed leader.

The iPhone accounts for a third of the touchscreen smartphone market in the U.S., with no other competitor in double digits. The Blackberry Storm is at 7 percent, the T-Mobile G1 and HTC Touch are at 3.6 and 3.1 percent, respectively. Mark Donovan of comScore believes the iPhone “set the trend in the industry for touchscreen devices, so it’s no surprise that it has the largest share of the market.” However, he also believes “competitors have entered the touchscreen market with compelling devices, competition is clearly heating up.”

That latter comment sounds eerily familiar, not at all unlike predictions about iPod competitors in 2004. Back then, the iPod’s success was attributed to everything from the iTunes ecosystem to Apple marketing, but what really set the iPod apart was the interface, especially the patented click wheel. What we are seeing now is that in every review from the Palm Pre to the Motorola Droid there is a comparison to the multi-touch interface of the iPhone. Without exception, the iPhone wins every time.

Even better, from Apple’s point of view, the smartphone with the worst touch interface — besides beleaguered Windows Mobile on HTC phones — has been RIM’s BlackBerry Storm and Storm2. Further, what is arguably the closest competitor, the Motorola Droid will lack multi-touch, at least in the U.S. Motorola obfuscated something about “differentiated consumer experiences on our mobile devices” based on “region, carrier preferences and consumer needs,” but another theory is wariness concerning Apple’s patents on multi-touch.

Let’s hope so. A vigorous defense of that mutli-touch experience is one half of what could be a plan for world domination by Apple in the phone market. The other half is the end of carrier exclusivity and the launch of a carrier-subsidized “free” iPhone nano, a media player and phone with the best interface on the planet, Apple’s golden touch.

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