It was a big week for smartphones. Apple unveiled two new iPhones — as well as a new smartwatch, which you can think of as a phone for your wrist. Amazon slashed the price of its new phone, and Microsoft, searching for new applications and content for its own struggling mobile platform, sought to acquire the company behind the blockbuster game Minecraft. What can we glean about these three companies — and a fourth, Samsung — from their smartphones?
Pretty much their entire approach to everything.
Iphone 6 And Iphone 6 Plus
Photo: Bloomberg/Krizstian Bocsi
Introduced with great fanfare in 2007, the iPhone was one of the few tech products in recent memory that overdelivered on its hype. The iPhone spurred worldwide demand for powerful devices that we carry with us always, everywhere. It also prompted the possibility of brand-new kinds of businesses, like the car-hailing app Uber, which connects service providers and customers on the go. And as Apple showed off this week, you may soon be paying with your iPhone, too.
The new crop of iPhones suggests that under Tim Cook, Apple’s chief executive, the company has emerged from the shadow of Steve Jobs, its revered co-founder. Jobs hated big phones, but the new versions, with screens measuring 4.7 and 5.5 inches diagonally, are gigantic.
Jobs was also skeptical of giving outside app developers too much freedom to alter his precious gadgets. Apple’s new operating system allows users to customize their phones in ways that might have made Jobs livid. These changes suggest a more open, less aloof Apple — and one bent on making sure that the iPhone remains the most profitable gadget in the tech business.
Amazon Fire Phone
Amazon entered the smartphone business just this year, which is a bit like showing up for a New Year’s Eve party after the ball has dropped. The tardiness might have been forgivable if Jeff Bezos, the chief executive, had done what Amazon has always done in new markets: make a very cheap, basic thing, and then compete on price, customer service and ubiquity.
But something odd happened with the Fire Phone. Amazon stuffed it to the gills with bells and whistles that few people seemed to want, including a head-tracking system that allowed for a mostly useless 3-D effect. Its other main feature, Firefly, seemed designed solely to let you buy goods from Amazon before you had a chance to reconsider.
Then there was the price. Amazon sold this novel, unknown phone for US$199 with a two-year contract, the same price as that of other high-end rivals. No one was impressed. Analysts say Amazon has sold only a few tens of thousands of the phones; the company seemed to confirm the dismal numbers when it cut the price to US$.99 cents, with a contract.
But Bezos has a special talent for tweaking his products until they click. So it wouldn’t be wise to count Amazon out of the smartphone game just yet.
Samsung Galaxy S5 And Note 4
Samsung is known in the tech business as a “fast follower,” a derisive term meant to suggest that it can’t come up with its own good ideas. When it comes to smartphones, Samsung responded to the iPhone’s rise by releasing many phones that appeared to closely mimic the hardware and software in Apple’s juggernaut. The plan worked: Samsung quickly became the world’s largest smartphone company, outselling even Apple.
Because it sells a lot of those phones for cut-rate prices, Samsung’s smartphone profits still lag Apple’s. But Samsung’s business has been buoyed by its relentless experimentation. It will try anything, even ideas that at first seem mindless, because who knows what will work in tech?
In 2011, Samsung released one such device, a 5.3-inch phone called the Galaxy Note, a phone so big that Gizmodo scoffed that it was “hardly even designed for humans.” Guess what? People loved it, and thus was born the combination phone and tablet, or phablet. Yes, that’s really what they call it. (Newer versions of the Note are even bigger: 5.7 inches.)
And, yes, it’s hugely popular: Phablets have become a significant portion of the high-end smartphone market, arguably cutting into Apple’s profits. Which explains, in part, Apple’s new big phone. Who’s the fast follower now?
Microsoft’s Nokia Lumia 930
“There’s no chance that the iPhone is going to get any significant market share,” Steve Ballmer, Microsoft’s former chief executive, declared on the eve of Apple’s smartphone debut in 2007. Then the iPhone hit the market and, ever since, Microsoft has been playing catch-up, revamping its mobile operating system and buying Finnish phone maker Nokia. Its current chief executive, Satya Nadella, is now charged with saving Microsoft’s business from the crush of phones and tablets running non-Microsoft software.
The company has done a fine job; its devices are now every bit as good as those of its rivals. But Microsoft finds itself on the wrong end of an economic tornado known as “network effects,” a phenomenon by which popular tech products become even more popular. Network effects fed Microsoft’s PC dominance: People bought Windows computers because that’s where all the software was — which prompted developers to make software for Windows, because that’s where all the customers were.
But because the company was so late to full-screen smartphones, Microsoft’s app store is seen by developers as a low priority. The lack of apps on the Windows Phone keeps customers away, which further lowers the phone’s reputation with developers. There’s no easy way to win this battle.
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