Global myopia on iPhone features

Tomi T Ahonen – Author, Consultant and Motivational Speaker – Author of six bestselling hardcover books on mobile and the former Nokia executive who now lectures at short courses at Oxford University, is a most widely respected expert in high tech, already referenced in over 40 books by other authors. Tomi has been quoted in over 300 press articles in a dozen languages, seen on TV and has presented at over 200 conferences on six continents.

So says his profile. Few writers cover the global cellphone scene as extensively and consistently as Ahonen. When it comes to the American market and specifically Apple, however, he’s about as tone deaf as any Wall Street analyst can get. His case is instructional not simply because he’s widely read but more so because his take on technology represents a certain antiquated bean-counting approach shared by many European and Asian technology companies.

Handicapping the iPhone

In June 2007, just prior to the introduction of the original iPhone, Ahonen wrote in Crunching numbers for iPhone: benchmarks, regional and quarterly, to reach 10 Million:

But the iPhone, as a smartphone, is severely flawed.

And its competitors are far ahead. Consider Nokia’s N-95, a smartphone in the same price class. It is hideously bulky yes, compared to the iPhone. But the N-95 has a five megapixel camera, with flash and Carl Zeiss optics. Shoots not only video, but DVD quality video. Has not only EDGE cellular and WiFi connectivity like the iPhone, the N-95 adds full 3G cellular and the even faster 3.5G, HSDPA, and most of all, the N-95 adds GPS satellite positioning.

The iPhone will not grow sales like the iPod did, starting from zero and growing in very dramatic fashion. That is true of a new market for a new product, could be so when cellphones first were introduced, but not today when it is a replacement market in the industrialized world. This is a market of totally saturated cellphone ownership in this high-price market segment. It is strictly a game of replacement cycles.

I think also that Apple’s profitability will be severely hit as it fights to get to these targets [1% market share…My gut says Apple has to release a slider/folder/clamshell/candybar phone with a keypad to get SMS texting users onboard…But I would not be surprised to see a keypad iPhone by next year.

Americans are different and backwards

A year later, he again visited iPhone’s prospects in his Apple iPhone 3G, what gives – great price but still.. in Communities Dominate Brands, “an engagement marketing blog around his [eponymous] book.” It’s an awfully long and meandering piece published a couple of days after the introduction of iPhone 3G last year.

And then – I am very sad to point out – the Apple top management is of course based in America, the backwaters of mobile telecoms, so they tend to hold outdated views on many things, which means that the “stubborn” view of “we know better at Apple what end-users want” may indeed be relevant to the US market, but grossly misunderstand the opportunities in the more advanced markets, starting with Japan and South Korea and Scandinavia etc.

In this near-book length tome, plenty of small-minded details on MMS, video calling, replaceable batteries, etc., but no mention of what was the most important aspect of the new iPhone 3G introduction: App Store.

It’s the software, stupid!

What Ahonen, his old company Nokia and Asian handset makers never really understood and certainly are not good at is software. That eight-letter word is what makes the iPhone a more compelling smartphone than any other. 20,000 apps downloaded half a billion times is what no other cellphone company has.

European and Asian companies are hopelessly stuck in a device world where it takes Ahonen literally 16,281 words to get lost in an endless features war. Today, after Windows and Macintosh, the iPhone is the third most important development platform. Within a year or two, it’s highly likely that it will also become the hottest mobile game platform. Apple has never been interested in devices, it goes after integrated platforms. And while device-centric European and Asian industry pundits were moaning about iPhone’s missing features, with the App Store, Apple has erected a “first-mover advantage” moat the size of California around the iPhone.

Chasing Silicon Valley

The rush is on. Every handset maker is in a death race to introduce its own mobile OS and app store, which divides the non-iPhone market into ever-smaller fiefdoms. The mature, stable and profitable alternative to that chaos, just as it was with the iPod/iTunes platform, is the iPhone. Not because it has an 8 megapixel camera or MMS or a chiclet keyboard, but because of superior software: the best SDK and the easiest app distribution platform in the industry. Developers notice, and so do users in turn.

European and Asian technology companies have long attempted to break into software: Nokia in phones and Sony in computers, for example. The results have been disappointing. If the company can sustain its success with the iPhone, the question is this: Can Apple teach the rest of the world that it’s not features but balanced design built on the bedrock of software is what liberates technology from the confines of device-thinking?