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Will innovative Apple oust Nokia as the ruler in the smartphone category by the year 2013? Who will rule?
Along the highway of technology, you can never drive past the ‘The End’ milestone... Be it innovation, security issues, phishing problems... or even war between technological hardware giants, like the one for the future of smartphones, between Apple and Nokia.
Research is what proves the evitable, and so here comes such a report from UK’s tech-watcher, Generator Research (GR), which has suggested that Apple could easily snatch away the numero uno smartphone manufacturing crown from Nokia in the next four years. As per forecasts by GR, by the year 2013, Apple’s iPhone product line would have been expanded with a range of new additions, which could help it garner a global marketshare of around 40% in the smartphone category. It also calculates that Nokia’s market share would erode by 50% by 2013. Conclusively, as per GR, while Apple would sell a mindblowing 77 million units in 2013, Nokia’s count would plummet to just 38.5 million in the smartphones category, a figure close to what it sold even during 2008!
Indeed, these estimations sound a tad too optimistic when it comes to Apple’s future, but GR’s Research Chief, Andrew Sheehy, justified his findings as he pointed out a number of key factors driving Apple’s upward trajectory. Apple’s near-to-total focus is on smartphones with a broad product line that would hit market shelves over the next few years. Secondly, Apple has the AppStore, and with it, has been laid out the groundwork for online services that multiply manifold the smartphone’s value. More so, increase in count of integrated third-party apps and services will further help Apple (and other smartphone manufacturers) to create a product beyond what the hardware alone defines.
Future developments to the AppStore will see coders accessing not only iPhone resources with greater ease, but also the network operator assets. Rob Enderle, Principal Analyst, Enderle Group, adds few more reasons to make us believe in Apple’s future supremacy as, “A sharp focus on both product design and tightly coupled demand generation marketing strategy has always been Apple’s strength, and this will play to its advantage. Unlike most vendors which build a lot of products to target widely differing customer needs, Apple builds few and then drives customer needs to the products...” Looking at how Apple’s iPhone sales have risen over the past two years, innovation surely seems to have paid-off for this Silicon Valley giant. And the cult? Well, surely, the passion that an Apple customer shares is hard to match by any other technological producer, leave alone Nokia!
Delivering network operator APIs through the iPhone would allow the platform to rapidly gain ‘missing’ features, such as the ability to send one text message to a group of users. Opening up the system this way allows Apple to expand the capabilities of its devices, while encouraging third-party app development on favourable commercial terms at the same time. However, Apple does face a challenge too – that of losing Steve Jobs, as Enderle says, “Apple’s biggest problem is the loss of Steve Jobs, as he is the guy who made this model (tightly coupled demand generation marketing) work. In his absence, the model might break and that may just have a negative impact!”
Clearly, for now Nokia has two choices: innovate or innovate, for without innovation, its attempt to either get ahead of Apple, RIM and Palm in the future, or the use of marketing to redefine consumer wants will never work. The future of smartphones is broad, bright and deep, and Apple has promises to keep... Will it?
Arun Kumar Roy
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Source : IIPM Editorial, 2009
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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