opinion When then-Apple chief Steve Jobs revealed the iPhone 3GS to the world in June 2009, the broad reaction from technology enthusiasts globally was one of muted enthusiasm.
The handset’s predecessor, the iPhone 3G, had, after all, literally set the world on fire when it launched 12 months previously. Sure, the original iPhone had already done much to revolutionise the mobile phone paradigm, but it took the launch of the iPhone 3G to truly take that incredible level of innovation to the masses. At the time, it was a double-punch combination of features that propelled the iPhone 3G to stardom; namely, the introduction of 3G speeds that unlocked the handset’s Internet capabilities, and the introduction of a wealth of third-party software in the form of the App Store.
The launch of the iPhone 3G was particularly huge in countries like Australia, where the original iPhone was never launched. The week of the launch felt like a festival in Sydney, where many fans queued up for days to buy an iPhone at midnight, accompanied by lavish parties put on by the major mobile telcos.
By comparison, iPhone 3GS week in Australia in June 2009 was still big, but there was a more muted feeling about the festivities. It was as if the nation had held its breath, awaiting another marvel from Apple, and received only a small glimmer in return; a faint rainbow. Engadget summed up the feeling well in its review of the iPhone 3GS. “The iPhone 3GS is a solid spec bump to a phone you already own … but it is, at its core, a phone you already own,” wrote the publication, questioning whether a tech specs speed bump, a compass and video recording features were worth paying a hefty upgrade fee.
Of course, the iPhone 3GS still sold very well.
The reasons for this are pretty clear. At the time, Apple wasn’t so much cannibalising the smartphone market as creating a market for a new type of smartphone. The step change between the functionality offered by the iPhone range and that of rival phones such as Nokia’s Symbian line-up, Research in Motion’s BlackBerry and other rivals from the likes of Sony Ericsson was incredible. Sure, on paper many of the phones looked the same, but Apple’s glorious touch-screen and user interface set the iPhone apart. Its competitors were highly functional, but the iPhone was beautiful as well as wonderfully usable – and that’s something consumers will never forget. The launch of the 3GS merely enhanced the line’s existing allure.
In addition, in 2009, today’s major rival for consumers’ attention, Android, was barely a glimmer in Google’s eye. Just a couple of Android phones had reached the Australian market when the iPhone 3GS launched, first among them HTC’s Dream handset, which was viewed principally in Australia as a curiousity which would appeal to die-hard anti-Apple bigots who would prefer to opt out of its somewhat restrictive ecosystem and choose a more open source, half-baked iPhone alternative.
In short, the iPhone 3GS succeeded in Australia because it represented a substantial upgrade on a phone which was already independently setting the market on fire, at a time when the competition was extremely tepid. The iPhone 3G was a paradigm changer and the 3GS accelerated the change.
I relate to you this context not to give you a history lesson (after all, it’s history that we’ve all lived through), but to illustrate how different is the context in which Apple’s latest opus, the iPhone 4S, will launch in Australia later this month.
Unlike that previous incremental Apple upgrade, the iPhone 3GS, the iPhone 4S is not a paradigm-changer, and it does not launch in Australia at a time of diminished competition in the market. At times, it seems hard to believe how fast Android smartphones have taken over Australia’s mobile phone market. But taken it over, they have. The mobiles phones that dominated 2008 and 2009 in Australia were the iPhone 3G and 3GS (just ask Optus, whose network buckled under the load). But 2010’s banner handset was arguably the HTC Desire, which introduced the nation to Android seriously for the first time and put the smart money back in Telstra’s wallet.
And in 2011, HTC and Samsung have divided up Australia’s smartphone spoils between them; HTC with a handful of world-class handsets (the Desire HD, the Desire S, the Incredible S and the Sensation), any one one of which is pretty close to being the equal of the iPhone 4, and Samsung with the Galaxy S II, which right now I personally consider to be the best mobile phone of any stripe in Australia, by any standard.
If we had to say one thing about HTC’s handsets, it’s that they’re beautiful. Their hardware finish is polished and complete, and they simply feel lovely in the hand. In addition, the subtly moving Sense user interface layered on top of Android is just joyous to play with; big bold colours and a sense of motion beguile the eye. Samsung, in comparison, is more functional – but the Galaxy S II is so light, so powerful and does everything (especially photography) so well that it’s little wonder that it’s popping up in geeks’ pockets everywhere.
Into this crowded market comes the iPhone 4S: A blocky handset with a smaller 3.5” screen (compared to the more usual 4.3” Android models) which has a penchant for slipping from users’ hands, and with a user interface that hasn’t been substantially updated since the original iPhone launched almost half a decade ago in 2007.
The 4S’s chief virtues – as announced by new Apple chief Tim Cook this morning at 4:30AM, Australian time – are a more powerful CPU, a better camera and faster network access. But all of these features – as Ausdroid and Engadget have painstakingly chronicled – basically see the iPhone catch up technically with existing handsets like the Galaxy S II and various HTC releases, which have been on the market for months. The software upgrades introduced with iOS 5, also to launch this month will be available for those already using Apple’s iPhone 4, with the exception of Apple’s new voice assistant Siri, who will only be appearing on the 4S.
In this context, Apple faces three likely categories of Australian customers for the iPhone 4S. On the one hand, its keenest early adopters — those who already have an iPhone 4 – will see very few reasons to upgrade and will likely delay their purchasing cycle until the iPhone 4’s real successor is eventually announced. Apple doesn’t need to worry too much about this category of buyers. They’re pretty much locked into its ecosystem at this point.
But it’s when you look at other types of customers – those who have legacy, non-iOS, non-Android handset, and those who are coming to the end of their Apple or Android plan, that you start to realise that the company is going to face a pretty harsh dogfight for market share in the short to medium term.
Unlike when the iPhone 3GS was released in 2009, new smartphone buyers in late 2011 are incredibly spoilt for choice. Telcos like Optus and Vodafone have already started discounting the Samsung Galaxy S II – currently Australia’s top handset – and discounts will no doubt hit other top handsets as we head towards Christmas.
In January and February, every major smartphone vendor except Apple will announce an absolute slab of new, primarily Android-based handsets at the CES and Mobile World Congress mega-conferences, and the iPhone 4S will slip out of mind quickly as Apple’s also-ran handset falls behind in terms of new features, basic specifications and user interface design.
Perhaps most disturbingly for Apple is that the company also faces a second threat. It’s not just Android eating the company’s lunch, but increasingly Windows Phone 7. The first bunch of fairly tepid phones released over the past year running Microsoft’s new mobile platform have just been given a new lease of life courtesy of the Mango update, and Australians are currently quite enthused by the system in general.
I wouldn’t be surprised to see an incredibly resurgent Nokia in Australia over the next year as the company releases its first new Windows handsets into a market which loves shiny new toys. Nokia’s strength has always been its quality hardware – which will be a winning combination when paired with Microsoft’s eye-catching WP7 user interface.
Now, none of this is to say that the iPhone 4S won’t sell well in Australia. The iPhone 4 needed an update to keep up to speed with the competition, and the company’s announcement this morning was precisely that. On paper (we won’t know more until review houses get it into the labs for testing), the iPhone 4S will easily take its place amongst the top ranks of Australia’s smartphones. It will hold the line for Apple in terms of market share.
But that’s all it will do.
The release of the iPhone 4S simply throws a ring fence around Apple’s smartphone market share in Australia, protecting and securing it for the time being. On the other side of that fence, HTC and Samsung right now are frolicking with each other in a sun-lit field with unicorns, whispering tiny delights in each others’ ear as they plan for major new smartphone releases in early 2012 that will put any thought of the iPhone out of customers’ minds. And even Nokia is no doubt evaluating the new potential for market share gain unlocked by Apple’s weakness.
Despite already evident disappointment with its launch this morning, many Australians will believe the iPhone 4S to be a worthy device which maintains Apple’s stellar reputation. But the truth is that the release of the iPhone 4S just makes Apple’s job harder. To do more than just tread water, Apple’s next smartphone release will need to be truly revolutionary indeed. Because in the meantime, its competitors will be making hay under a radically diminished Apple star.
Cupertino just handed the conch to its competitors. Now it’s their turn to shine.
Image credit: Apple