Hardware manufacturers (OEMs) tried everything: released dozens of color variations, different form factors, even allowed customizing sounds and wallpapers – as long as they were bought from operator's own store. They released feature-packed “killer devices” and ultra-low-cost devices for emerging markets. Something for everybody. There were even system firmware updates to fix defects – for free! It was all about serving the customers. Customers just weren't happy, but nobody could exactly tell what was the problem. There were millions of problems, each different for millions of people.
Apple knew nothing about mobile phone business or how to serve the difficult mobile phone customers. They were world leading experts in serving small niche markets, where User Experience was more important than price. Markets where usability, look and feel, user delight were key aspects. Maybe that's why Apple succeeded where OEMs failed: serving the customer. They came into mobile phone business from outside, with a view from outside. Apple offered something completely different.
First Apple iPhone was technically a mediocre device compared to smartphones from any traditional OEM. Not enough memory, too slow, camera worth joking, just a single akward hardware form factor, poor connectivity, running only a single application at a time – and worst of all – hooked up into iTunes desktop application. It just didn't offer everything for everyone, it was targeted to niche markets. Nothing to take seriously, OEMs might have thought.
There were customers even before iPhone release. Millions of users were registered in iTunes, familiar with buying music pieces online. They jumped happily to the new device as a better music player. Price was pretty high, but you got Cover Flow UI, animated 3D user interface, which was familiar from existing iPod music players and Apple desktop machines. It was something uber-cool in a mobile device. Very thin and stylish hardware design didn't hurt either.
Everything changed with Apple AppStore. People had a cool music player, which was suddenly able to run applications. People who were familiar with buying music online, would now buy software. Everything just clicked together: cool design, simple to use, millions of existing users, familiar market place, ease of purchase, reasonable terms for 3rd party developers, Apple marketing machine. Mobile world turned around.
iPhone OS (March 2009) and App Store Metrics (July 2009) are nothing but awesome:
- Available in 80 countries around the globe
- iPhone OS devices 30 millions sold
- SDK downloads 800 000
- Registered developers 50000
- Available applications 55000
- Active publishers 14000
- Submissions per day 139
- Total 1000 million downloads
Nokia set-up their own market-place, called Ovi Store. Analytics and experts agree that it's great, but users are difficult again and complain about many things. O2 set up their own semi-public software testing area, called O2 Litmus. It looks good, but smells like another walled garden. Palm Pre has sold 300000 devices, which have downloaded one million WebOS applications - from a selection of few dozen candidates. Palm Pre SDK is still not public. China Mobile, with 480 million customers, is opening their own application store. China might have more users than anyone else, but it is also very big in software piracy. Why waste good money, when you can get software for free (I've heard said). Google's Android Market also looks like the Next Big Thing, but will that be compatible with the rumoured 20+ devices to be released this year. There are already rumour it won't be 100% compatible.
Apple has total control on the whole chain: hardware, operating system, SDK, marketplace, invoicing. Apple has total control of mobile device developers – and they love it. Apple has it all and users love it.