Stats analysis: iPhone faces fork in the road


In the past six months, smartphone buyers in the U.S. were more likely to choose Android-powered devices over any others, including iPhones.” –

The above account by is yet another blow to the iPhone camp, which has already been reeling under negative press of the latest iPhone 4. Data released recently by The Nielsen Company confirms what many analysts have known all along: The iPhone needs to change one thing about itself to survive.

Android rises faster than a hot-air balloon

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Notice the green line? While the blue line is falling and the black line is more or less steady, the green one has been rising fast. Let’s not forget that we are dealing only with the US here, which is why Symbian is nowhere in the scenario. Android OS, however, seems to have a whooping growth rate. A growth rate that cannot be matched by any other OS in the US at present. And there’s a reason for why it is rising this rapidly. It’s also the same reason why the iOS is stuck where it is, instead of climbing slowly. But we will get to that in a moment.

6 months: A Dream Run

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32% smartphone buyers in the US have chosen Android over the last six months. iPhone might be all glitzy and glamorous, but its fourth iteration had its shortcomings. Blackberry OS’s share only fell further after the lackluster Torch. Both of these companies have made a mistake that Android has capitalized on. And it will continue to do so till the time these manufacturers get their game together to compete against the platform.

The iPod story. The Nokia strategy.

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To really understand where iPhone went wrong, we need to look at the iPod. It was first launched like the iPhone – a single device with no options for the buyers. As competition increased, Apple launched different versions like the Nano and Shuffle.

To further understand why the iPhone will continue to lose to Android, we need to look at Nokia’s strategy throughout the years. Nokia – the biggest phone manufacturer in the world. How would you classify Nokia? A dumbphone manufacturer or a smartphone manufacturer? You can’t classify it as either. Its strength lies in providing a comprehensive range of mobile solutions to customers of all levels. There are touchscreen phones, slide out phones and candy bar phones. There are phones with great cameras and phones with amazing speakers. There are phones with great hardware and there are phones which can do nothing more than making calls and sending messages.

To cut a long story short, the key to iPod’s and Nokia’s success has been diversification. And that is something that Apple needs to do to the iPhone in order to revive its sagging market share.

Tomi Ahonen speaks his mind

In a 10,000+ word article, Tomi Ahonen speaks his mind about how the iPhone can benefit from diversification. The strategy is simple to understand: get the iPhone off its high pedestal where only a few can afford it, and put it in the hands of the mass market. Of course, it’s Apple. So you can’t expect it to go the Nokia way and manufacture $150 smartphones. But then it doesn’t need to. Like we said, it’s Apple. All it needs to do it make a cheaper version of its existing iPhone. It can then upgrade these users to higher end phones.

Diversification already exists!

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In a way, the iPhone has already, automatically, diversified itself. There’s the 2G (no longer manufactured), 3G, 3GS and now 4. So buyers do have cheaper options in the line-up. But there’s always the sinking feeling that they are buying years-old technology. Add to this the fact that, in essence, there’s not much difference between these phones.

What about users who want a physical keyboard on their phones? Do not underestimate the size of this population. What about users who want a better camera? Users who want a bigger screen? There are a lot of other markets that Apple still hasn’t targeted. And this has been its single biggest failing.

And one more thing…

In typical Steve Jobs style, we couldn’t resist that! The biggest problem with having only a single model is – what happens when it fails? Like we saw with the iPhone 4 this year, even Apple is not immune to making failed devices. Issues with the antenna, the screen, the back glass – all have tainted the iPhone 4’s reputation. And Apple has nothing  to fall back on. It doesn’t have an iPhone 4 Nano that it can promote instead of the iPhone 4.

But Apple, of course, is no fool

We are sure of it. Apple realizes just as well as the bloggers and analysts that the key to future survival will be diversification. They simply cannot sell the iPhone as fast as Android if they have one phone competing against an entire army of devices. The question, then, is not whether Apple will diversify the iPhone range. The question, rather, is when. Apple doesn’t seem to be doing the iPhone’s market share any favor right now. The only thing people look forward to is a possible Verizon launch in the near future. However, even that can carry the iPhone only so far. Once iPhone lovers Verizon get the iPhone, Apple will have to diversify the range. iPhone is about to reach a fork in the road. And that day, one can hope, isn’t too far off.

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