FEATURE SMARTPHONES


years as the leading innovator in the smart- phone space, 2011 will go down as one year in which the key milestone was not product related. The death of Steve Jobs overshadowed the launch of the iPhone 4S and forced the industry to confront what it had long been debating hypothetically: Can Apple continue to dominate without its leader—a complex character who will be remembered as much for his ruthlessness and dictatorial management style as for the clarity and genius of his vision. For Tim Cook, who replaced Jobs as CEO


The late Steve Jobs Club Nokia did not sit at all well with the


operators, and its failure gave credibility to the unsupportive stance they adopted. There was no such attempt to stand firm in the face of Apple, however, and just as the chasing pack of handset vendors make all the right noises about the importance of the operators, so the operators themselves cannot be seen to bellyache about the level of control Apple exerts over them. And yet it’s an open secret that the carrier


community harbours a level of resentment towards Apple. Of course very few people want to put their head above the parapet and say so; for an operator spokesperson to voice any sentiment along these lines would probably be a firing offence. But even third parties and partners get extremely jittery on the topic. One man who doesn’t mind calling the


situation as he sees it is industry consultant Bengt Nordström, a former CTO at Hong Kong carrier SmarTone and alumnus of Ericsson and Comviq, among others. “We hear from the operators about how Apple treats them and they’ve never seen anything like it before in the industry,” Nordström says. “When [Apple] began to dictate the situa-


tion, questioning whether operators were good enough to sell their product, it conflicted with the views that operators have of themselves.” The problem is compounded by performance issues with iPhone products that operators, in many cases, must shoulder, he says. “Many of these problems are caused by Apple’s technical solutions, such as their poor radio antennae,” he says. “But when they try to bring these things to Apple’s attention, they get ignored.” For Apple, undisputed over the past four


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when Jobs’ illness made it impossible for him to continue to lead, the pressure is well and truly on. While his debut performance unveiling a new product was made under the pall of Jobs’ imminent demise, the iPhone 4OS itself met with nothing like the positivity that greeted its forebears. The world was waiting for iPhone 5, and what it got was Siri; a voice control function that sits alongside Facetime as another attempt from Apple to breathe life into a concept that the mobile industry has long used to define the future. » While Vodafone’s Peter Becker-Pennrich pays


tribute to Apple’s successes, there is a caveat attached: “The question is whether or not the will have the best product going forward,” he says. “The iPhone 4s was a disappointment to many people and—if you forget about brand value for a moment and compare it to a Galaxy Nexus of SII, or the HTC sensation—you’ll find many reasons why the iPhone wouldn’t be rated as high as the others.” Whether or not Apple can sustain its status as the definitive innovator in the space is prob- ably the biggest question in the smartphone market for the near term. Certainly the tech- nological gap between it and its competitors seems to be shrinking. Simon Lee-Smith says that Apple still out-executes its competitors and retains a design edge. But he adds that, “the others have brought themselves much closer to iPhone and Apple in general. The gap is closing—and closing rapidly.” Of course the question of whether Apple re- tains its leadership leads to another, more open debate: If Apple is to be ousted, who or what will succeed it? Even the people most intimately involved in the handset sector concede that they’d be far wealthier by now if they had the answer to this question. But there are a few ideas. There is a consensus that, any player that is able to make a true success of a domestic, multi-device connectivity play—somehow harnessing the benefits and experiences available through the television, the PC, the


smartphone, tablet and other devices (games units, for example) could find themselves in a very strong position. “Whoever gets that right first will be able to command a premium on their products in the phone space,” says Becker-Pennrich. Such a trend would play well for the likes of Samsung; strong in TVs and handsets, and working hard to become so in the tablet space. The new Sony device business, when the Ericsson half of the brand has been phased out, will be all about adding “Sonyness” to the products, says Kristian Tear. “We believe in the convergence of screens and this is putting us in an excellent position for the next five to ten years,” he says.


Simon Lee-Smith is thinking along similar


lines, addressing the question of whether whichever company usurps Apple will have to exert a similar level of control from one end of the device play to the other. “I think Apple will be challenged by a company that has end-to-end control, but not necessarily of hardware and software,” he says. “Someone will bring out an integrated solution which offers software, services and connectivity as a whole, and it won’t be about the looks of the device. There will be another competitive landscape, and this is where other companies will leapfrog Apple.” In the immediate term, as the smartphone


innovation cycle winds down, tablets will lead the next one and, here, Apple looks to have already established another leadership position. Given the similarities in the DNA of smartphones and tablets, however, the chasing pack are already showing themselves to be far quicker off the mark, and the tortuous legal battle between Apple and Samsung, is likely only the tip of the iceberg. As the carriers, vendors and platform pro- viders tussle for position, they are in chorus on the view that the consumer holds the final decision-making powers. In the end it will be down to the consumer to judge whether or not the Lumia 800 is worth a certain amount, or whether Android has evolved to the point where it is no longer perceived to be a poor cousin to iOS. It will be the consumer whose loyalties will reflect the strengths and weak- nesses of all the players in the value chain and the consumer who decides what innovation is the winning innovation. And it should not be forgotten that there is a distinct possibility that the next great innovation leader in the device space is not a name even known to that consumer as 2012 unfolds. n


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