Samsung recently released its latest smart phone in the Galaxy S II line called the Epic 4G. Some in the media are hailing it as an iPhone killer, a statement that is at its deepest level entirely ignorant. Amazon will soon be releasing a tablet version of their popular Kindle e-reader and again people will proclaim or at least ask the question “is the Kindle Tablet an iPad killer.”
What I want to make clear is that there is no such thing in today’s technology landscape as an iPhone or iPad killer, or any other product killer for that matter. Many seem to assume that the tablet and the smart phone markets will be very similar to the historical PC landscape. Historically with PCs one dominant software operating system dominates and the rest have marginal market share at best. Even the PC landscape is changing.
The fact is that the market for PC’s, smart phones, tablets, and anything else we dream up will never again look the PC landscape during the 90’s and early 2000’s. There simply will not be one single OS that dominates the landscape. The market will support many and therefore there will be many choices and choice is good.
The reason for this is because when a market is maturing there is generally fewer or less quality options. There is in essence a market standard that leads the market to maturity. With PCs it was Microsoft and Windows which led the way as the standardized technology by which the market matured. With the Smart phone and tablet it will be the iPhone and the iPad that will lead the market into maturity. However once a market matures it begins to segment.
With Windows and the PC it took the product nearly 25 years to reach maturity. Smart phones, tablets and more will not take nearly that long and in fact will mature in around 3-5 years.
Due to the rules of market maturity, I can confidently say there is no such thing as an iPhone or iPad killer. There are only other product choices. John Gruber over at Daring Fireball makes some similar observations on how the market will support multiple solutions.
Why do I know this you ask? Because a Toyota Corolla is not a Mercedes-Benz killer. A Ford Truck is not a Prius killer. And an even closer analogy, a BMW series 3 is not a Mercedes C300 killer or vice-versa. The market can sustain all these automobile products.
To use another example Pepsi is not going to release a Coca-Cola killer. You simply have a choice of Coke, Pepsi, Sprite, Root Beer, Mt Dew, etc.
I have been studying the automobile market as it relates to a mature consumer market for some several years now and the similarities between the automobile market history and the technology market history are strikingly similar. The big difference is that the automobile market is about 20 years more mature than the PC industry. However when you study how the market matured and consumers adopted new technologies in the automobile industry you find moments in time that are very similar to the moment in time our industry is currently in.
Therefore we learn a lot about how today’s fragmented yet competitive automobile market and what it can teach us about what the consumer technology landscape of the future will look like.
This is the reality in mature consumer markets. There is a dominant solution that leads the market to maturity as consumer who are interested in their first product in the maturing market go with the market leader. As they become more familiar with their needs or wants with that product they then begin to shop around based on preference.
This is why the abundance of Android smart phone in the early stage of a markets maturing is actually more harmful than productive for the Android solution. I have stated before that the Android market is too saturated for its own good and that will be the case until the smart phone market reaches peak maturity in 3-5 years.
The critical key to any company in the market wanting to maintain or grow market share is to be around when the market actually does peak. Because once it does it is very difficult, without a pure market disruption, for new entrants or those who have minimal market share to grow.
Establishing market share early is of the utmost importance.
11 thoughts on “There is No Such Thing as an iPhone Killer”
Good point. Outside of action movies, how many “killers” are there?
I think you are correct as far as the cell phone market. Because of various artificial and technological barriers and the fact there were several large, established players, producing tens of millions of units, Apple will simply be one among many smartphone players, albeit taking 60% of the profit.
BUT, with tablets, Apple appears set to kill all the competition (just like the iPod) and maintain a 70 – 80% market-share for the next five years. If the rumors are true, that Apple will sell 20 million iPads in the current quarter, the war is already over. Apple will then easily sell 50 million iPads for 2011, completely stomping on everyone else.
HP giving away all those TouchPads didn’t really help anyone else either.
Yes that is true in tablets, however in 5 years or so as the iPad helps mature this new category of computing, it will at some point fragment and the door will be open for other players. Very similar to how when the market matured in PCs it opened the door for Apple to gain.
That could happen in tablets as well at some point in time in the distant future.
Maybe, but it never happened with mp3 players. That market never “fragmented.” In this case, I think the “open” nature of Android and Windows are actually working against them in the tablet space. They are all beating each other’s brains out for components, marketing, shelf space and mindshare to sell a couple million tablets, and that’s a best case scenario. Meanwhile, Apple is closing in on 50 million tablets in a single year. The OEMs will never reach the economies of scale to really compete with Apple.
Ben, is it possible to use what happened with the iPod (not iPad) as a guide to what will happen with the iPad and smartphones? I’m having trouble understanding the trends.
Not really for a variety of reasons. The iPod was a transitionary, and dedicated use product for most of its lifecycle.
The iPad is a more general purpose computing device. As I stated there will come a point in time where other options / differentiation will be desired by the market. Its just not today and its probably not in the next few years.
3 years from now I think the market will be ready for some variety in tablets. Smart phones sooner.
But who is making all the money? Apple.
In smart phones.
Just ask Dell or HP if they plan to be in the PC market in five years. I bet not.
There will be more and more fragmented OS market share because soon OS won’t matter because what will matter is where is your data in the cloud. Apps will be web-based.
The real question is will one company dominate the cloud market?
Apple disrupts its own market, be it iPods, iMacs, Mac-books or iPhones. With their focus and supply lines coupled with their stores they will always be a hard act to follow.
The competition is hopelessly divided between software and hardware providers. Look at Android and Microsoft, all they can do is attempt to follow Apple. Not an original thought has crossed their minds and what makes you think this will change in the next 5 or so years?
I believe you are all wrong.
Apple can lose its crown and its pricing power. That alone is death enough. the last data I saw stated clearly that 37% of consumers are waiting for a windows 8 tablet.
And that is consumers , companies are very much waiting for windows