Apple’s iPhone Raises the Bar

Implications: Apple’s iPhone has set a new standard in smartphones and mobile entertainment devices.  The mobile industry will spend the next few years digesting the new paradigm Apple and others have helped usher in.  The clear winner will be mobile consumers who will benefit from improved mobile devices and a better user experience.

Analysis: Apple’s entrée into the mobile world is significant and raises the bar on mobile devices and applications.  With its iPhone, Apple brought an attractive device with innovative and easy-to-use features (e.g., large touch-screen display and visual voicemail) to market, a developer community excited about creating and monetizing new applications, and an increased focus on the mobile user experience, among other things.  In addition, with the $200 price in the US for the 3G iPhone, AT&T Mobility and Apple were able to crack the all-important price barrier for mass market mobile smartphone adoption.  The mobile industry was in need of a new entrant to spur innovation and competition, and Apple delivered.  

Apple’s execution was not without flaw as it encountered problems with activation, initial pricing, product elimination, reception, battery life, etc.  All things considered, the iPhone has been a great success and has raised the bar for industry participants such as Nokia, Research in Motion, Samsung, LG, HTC, AT&T, T-Mobile, Vodafone, Verizon, and Microsoft.  Apple’s impact, along with the efforts of incumbents and new entrants including Google (with its Android initiative), will impact other members of the mobile value chain, including application developers, content owners / publishers, and advertisers.

Apple’s iPhone devices and ecosystem have several features that the mobile industry is digesting, including a large touch interface, and application marketplace and a $200 price point.  While all of Apple’s initiatives won’t be copied by the rest of the mobile industry (for example all smartphones will not be touch input), the focus on innovation, third-party applications and ease-of-use raises the bar for everyone in the industry, and especially benefits consumers.