2013: A Tech Odyssey — Part II

| March 26, 2013
Apple's Sauce Is Losing Its Flavor

This is the second post in my 2013: A Tech Odyssey series

This is a continuation of my 2013: A Tech Odyssey series of posts.  You can reference the first post in the series here.

Apple’s Sauce Is Losing Its Flavor

I still remember seeing the first iPhone commercial.  That easy, light tune plucking away, while on-screen someone’s (very well-manicured) hand navigated the web effortlessly using touchscreen motions I’d never seen, and then came the reveal: This was also a phone?!  But they didn’t show me that clunky internet experience I’d had on mobile phones before; no, the screen reoriented itself to landscape view in order to see pages better, and zooming to easier read the fine details was as simple as a pinch-and-expand of the screen—a gesture I had never seen before, and yet instantly it was familiar.  Like my mind went “Oh yeah, pinch and expand, duh—how else would you do that?”  On top of this newfound familiarity with touchscreen, iPhone delivered opened the world of mobile apps—a term, in its infancy at the time, that would soon become a billion-dollar market serving as a pillar of our modern tech economy.  So much about the iPhone was new, exciting, and ground-breaking.  Yet here we are in 2013, and my new question is: Has anyone felt that way about an iPhone since then?

Blackberry devotees will quickly assert that smartphones were around years before Apple’s iPhone.  But Blackberry’s precipitous decline beginning in 2010 indicates that users decided Blackberry devices and operating systems, while innovative at the time of launch, were no longer competitive with new and emerging smartphones.  Why?  The iPhone was easier for the average consumer to use and understand—something that hadn’t quite been a high priority for mobile tech developers, considering the market for the kind of sophisticated technology found in iPhone had traditionally been more focused on business applications than appealing to tech newbies and laymen.  And that’s where Apple saw an opportunity and firmly established their foothold in 2008, doubling down on the fact that the wow/cool factor of touchscreen navigation and the simplicity of its user interface would win over even the most skeptical and discerning market demographic.

Of course, we won’t ignore the elephant in the room that hit the mobile scene shortly after iPhone: Google’s Android operating system.  At first, there were plenty of skeptics raising doubts about the ability of Android to compete with Apple’s iOS, with the fragmented disconnect amongst Google’s ecosystem of mobile devices running multiple versions of operating systems and applications (something that gave both consumers and developers plenty of headaches).  Then in 2010, Android rose and overtook Apple in mobile operating system market share—and it hasn’t given up the lead since.  While the App Store did post record revenues in 2012, the Google Play store is still growing at a faster rate.

Beyond mobile smartphones, Apple also built its reputation as a tech innovator by dominating the worldwide tablet market with the launch of iPad.  When one considers the massive popularity of the iPad since its release in 2010 versus the relative obscurity and slow adoption rate of Android tablets between then and 2012, it would seem Apple is destined to own that space forever; in fact, 91% of all web traffic on mobile tablets in 2012 can be attributed directly to iPad.  But now, even that tablet space has begun to give up notable market share to Google’s Android tablets.  It’s worth noting that, even with this statistical evidence of waning market share for iPads, there are plenty of tech pundits who claim that Apple will continue to dominate the tablet market for the next few years.  But you can’t dismiss the data proving that Google is making a serious challenge to Apple in the tablet space; and it stands to reason they will only become more competitive in this market as they gather user data and get smarter about tablet user demands.

While many attribute Android’s considerable mobile market share to its competitive pricing and features, Apple still believes Android’s success is not entirely ethical.  They remain firmly convinced that Samsung—manufacturer of Android’s most popular mobile devices—only became competitive in the mobile market by blatantly copying Apple’ s iPhone and iPad designs and infringing on its patent rights. For years, Apple has engaged in ongoing litigation to prove this, with varying degrees of success spanning multiple cases in numerous world courts.  But as evidenced by Android’s ever-increasing sales, solidifying consumer loyalty, and increased adoption-rate figures, Google has made it clear they will be sharing a large chunk of the mobile revenue market with Apple for the foreseeable future.

It’s important that Apple retakes the throne in mobile now, because being stagnant is dangerous for any company in an industry founded and based on innovation—especially when that company had established itself as the industry’s standard-bearer in terms of mobile design, features, and value.  But now I hear Apple is responding to real competition in the mobile app/mobile device space by offering a cheaper iPhone?  Consider me unimpressed, and blame Apple themselves for setting my expectations higher than that.  Sure, compromising quality for the sake of marketability may simply be the inevitable response to Google and Windows offering capable, competitively priced mobile alternatives—which I admit is a good thing for mobile consumers, retailers, and mobile tech innovation overall.  But despite industry peers who may consider that kind of product strategy essential to Apple’s longevity, I can’t help but see it as Apple following rather than leading.

Let’s remember, as I stated earlier: iPhone pretty much singlehandedly created this prosperous mobile industry we have today.  It jump-started society’s shift from cell phones to smartphones, transitioning them from merely a convenience to a virtual necessity, for both personal and professional applications.  Today, projections estimate $25 billion in mobile revenue in 2013—that’s an insane number for a mobile industry that one might say is just now hitting its stride.  However, despite the booming mobile tech economy and popularity of mobile apps, the Apple brand has simply lost its former luster—a theory supported by its falling stock, the languishing enthusiasm from tech bloggers and analysts for its newly-released products, and perhaps more importantly, the increasingly negative feedback of its core consumer base.  The same tech pundits who saw iPhone as groundbreaking at its inception now call it flat-out “boring.”  Thus, I feel Apple cannot remain a mobile tech success story and take advantage of its massive revenue potential without finding a way to be exciting again.  And though I am confident they will wow the tech world again in the near future, it is certainly no longer a foregone conclusion.

Ankur Gopal is CEO of Interapt, a mobile tech strategy and development firm.  When he’s not obsessing over his March Madness brackets (Illinois got robbed!), he is replying to emails at: agopal@interapthq.com

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