Summary
Apple's iPhone has over nine times the usage of it's next closest competitor, Windows Mobile. Half of all smartphone traffic goes to the iPhone. Use has been credited to a spike in ownership post-holiday and to the strength of the Safari web browser.
Analysis
Apple has a long history of creating products that exceed the expectations of their customers. More than any other tech company, however, Apple's business model is set up to encourage a customer focus. Most tech companies focus on expanding their brand across different platforms (Microsoft Windows, Windows Mobile), holding customers hostage with contracts (the entire mobile wireless industry), or buying competitors in their space to increase market share (Oracle). Apple's success with the iPhone can be traced to three primary areas:
A focus on the customer experience. When Apple decided to use a 'full-strength' browser in it's phone, Safari, it looked at the existing smartphone web browsers, and found the experience lacking. While the limited browsers in phones such as the BlackBerry might have helped RIM to streamline their software production, it also cut off the BlackBerry user from surfing the web 'for real'. Apple decided to provide the same web experience to the customer in a mobile platform that he/she enjoys on a computer.
Apple had also proved it's worth as a business partner by single-handedly revolutionizing the way people purchase music with the iPod and iTunes. For a cell phone carrier, hitching your brand to Apple was a way to ensure customer satisfaction.
Application of proprietary technology to enhance the customer experience. One of the reasons Apple doesn't have Flash enabled on it's phones is that is possible to create a completely new and different web experience in Flash that is separate from what Apple wants. Apple's strength is the vision of its prodigal founder Steve Jobs, who knows what Apple should provide to its customer before the customer knows.
Crowdsourcing, or open-source collaboration, the Apple way. Before the iPhone, every cell phone manufacturer had to bow to the carriers' requirements about what they would allow on their phones. Capabilities existed in the hardware to allow many features that the iPhone now has, but the carriers were focused on protecting their revenue streams. Apple shopped the iPhone around to several carriers, and only AT&T was willing to take orders from Apple about what should and should not be on the phone, feature-wise.
Apple's vision for the iPhone was fulfilled by the App Store. For anyone who has an iPhone, the App Store is a treasure hunt through tens of thousands of applications, built by independent developers, to find the unique experience of building an iPhone just how you want, whether it's SMB applications (QuickBooks), social networking (LinkedIn, Facebook), breakthrough apps (Google Voice Search), business analysis (Google Analytics), or banality (Pull My Finger). The crown jewel in Apple's customer and revenue crown is the App Store, where it is estimated Apple gets 30% of revenue of every app created.
No other mobile telecom company has ever been willing to give up a sliver of their revenue stream, but Apple's strategy has revolutionized the industry. PC's, portable music players, now cellphones. What's next, Apple?
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
