One of my live blog entries from the keynote at Apple's Worldwide Developer Conference had a one-line body:
iPhone competitors, it's over.
It doesn't excite me to say that. I don't like seeing any one player rise to lord of the realm. At least theoretically, a cornered market isn't good for buyers. But make no mistake, Apple entered the mobile market to corner it, and at this moment it's largely unopposed. If you wonder how Apple got there so fast, consider the zeitgeist that Apple tapped: Most wireless customers are sick of their wireless carriers. After years of overbilling, lousy support, spotty coverage, being locked out of bargain rate plans available only to new customers, and worst of all, being stuck with carriers' anemic hand-picked catalogs of devices, customers wish wireless carriers would just go away.
[ Get the full scoop on Apple's mobile empire-in-the-making in his Enterprise Mac blog's deep dive essay. ]
That's what Apple did. iPhone makes wireless carriers go away. At first, carriers went through the motions of negotiating with Apple to retain ownership of subscribers. But then a funny thing happened. The most possessive of all carriers, AT&T, discovered that it doesn't really like taking care of customers (surprise!). iPhone gives AT&T the benefits of customer ownership -- rate plan lock-in and term contracts -- with none of the hassle of support, advertising, or plan competition. Word got out that AT&T likes it, and Apple quickly knocked over carriers worldwide with its simple "lean back and get paid" plan.
At least in North America, wireless carriers are completely helpless when it comes to services. They all spend fortunes trying to create mobile Internet and media services so appealing that they'll lure people away from other carriers. Apple tells carriers that for just one model of phone, they can skip trying to cobble together a bundle of carrier-unique services.
U.S. customers may dislike AT&T (hand goes up), but if you have an iPhone, you will never have to speak to them. Apple gives AT&T permission to send you a flat rate bill, with the only allowed unit charges being for text messages. The rate plan is expensive, but there is no fine print. Consider that $15 per month premium as insurance against getting screwed by your carrier. You're also paying for Apple's help desk, which is shockingly helpful.
If a handset maker came to me looking for advice on competing with iPhone, I'd offer a place to start. Break wireless carriers' blockade on handsets. Release new handsets worldwide, simultaneously, and offer them in North America free of carrier locks and subsidies. Opt out of the charade that carriers have to validate individual devices on their networks before allowing users to buy them. With high-end handsets, customers will welcome the freedom to choose the handset first and the carrier second. Carrier and device choice will be powerful competitive weapons.
Don't be so price-sensitive about your handsets. People will pay $399 or $499 for a feature-rich handset for the privilege of owning it free and clear. Buyers in that price range understand that term contract subsidies are a rip-off.
Get your developer program act together. If you can't create the tools and the community you need to build the kind of vital third-party mobile app market that Apple is constructing for iPhone, find and fund some champions in the open source realm. Get devices out to developers; even refurbs would be welcome. Most mobile developers don't have enough devices against which to validate their code.
Expose the advantages of your platform at a high level. For example, iPhone does not have the ability to run simultaneous applications or to open arbitrary TCP or UDP sockets over a wireless connection. Consider the applications that these limitations make impossible, and show that your platform makes them available.
Get aggressive about firmware updates, and unify them so that one image updates a large category of devices. The industry's habit of making customers buy new devices to get the latest functionality is wrong-headed. Here, too, handset makers should do an end-run around carriers and push updates directly to customers.
Where support is concerned, handset makers should give customers a place to meet and help each other. If one already exists, get your people involved. Assign support tickets and refer to those tickets in release notes for new firmware and tools so that customers see that they're making change happen.
The lowest-hanging fruit for iPhone competitors is savvy, self-sufficient users of high-end handsets and the developers who want to code for those users. That's not the whole roadmap, but it's a place to start. Believe me, the market is waiting.