The Boss Is Right

The hordes waiting in line for hours today to get that new iPhone 4 make it hard to believe that Apple is losing share in the smartphone market.  But as I wrote last week, they are and they will continue to do so.  Those hordes are merely trading up, not increasing iPhone share one bit. 

In the comments of that post, Stephen Fleming, my boss, noted this:

I don’t disagree that Android, in its many variations, may dominate MARKET share of smartphones a few years from now. But, with all the revenue streams from iTunes, the App Store, the iBooks store, and iAds, I think Apple will continue to dominate the PROFIT share. And that’s what Jobs is targeting this time around.

Stephen is right. He’s right because it’s not really about the phone because the phone is no longer a phone.

Tell you a story.

About eight to ten years ago I was the guy that started and ran EarthLink’s mobile business.  The Internet was just beginning to move off the desktop into handhelds and there was a big rush to get there.  Companies such as AventGo and Everypath promised to get web content into the mobile environment.  There was just one problem with this plan. Well maybe two.  Back then wireless transit speeds were extremely limited. Viewing any content was painful.  Very painful, nobody had the patience.  But the bigger issue was that users did not even want content on their mobile devices.  They wanted what got them to use the Internet in the first place.  Communications.  Email.  The handheld, that is what we called them back then, needed to morph to a communications device not a content device. So we went out and built that capability, sold it to our installed customer base, and built a nice little business around it.

Fast forward to 2007.  The launch of the iPhone 2G.  Why they called the 1st generation phone a 2G when all other Apple handhelds use the numeric before the G to designate generation is beyond me.  But I digress. The iPhone was not a phone.  It was something.  A platform.  At the time what exactly it was a platform for was unclear.  But if you used one a little voice deep inside was telling you “this changes everything.”

And what is becoming clear in 2010 is what it changes.  The iPhone is not a phone.  Yeah it does all that communications stuff like email, talking, texting, and more.  But it does something else, and it does it pretty darn well.  It delivers content.  Hell it creates content. The iPhone has made the jump from being a communications device to being a content device.  It’s the only thing out there like it, which is why the hordes are waiting in line to upgrade.  And even more importantly, delivering content can be a very big and profitable business even if the iPhone becomes a niche player in the smart phone market.  

June 24, 2010  |  Comments  |  Tweet  |  Posted in Current Affairs, Internet, Mobile