Saturday, December 1, 2007

Would-be iPhone killers

While I’ve generally been bullish on the iPhone, the one part of Apple’s strategy I've questioned is the decision to grant AT&T an exclusive in the US (and other carriers overseas). Sure, the exclusive guarantees Apple a piece of the ongoing revenues in the US and Europe.

But excluding three-fourths of the US market (less in Germany or the UK) guarantees that competing carriers will be aggressively promoting competing products rather than selling more iPhones (as has happened for Motorola, Nokia and others when they had a hot product available across all carriers).

The Christmas season ads seem to be highlighting which phones AT&T’s rivals see as “iPhone killers.” What’s the lineup?

What I find interesting is the carriers are hoping to dethrone the iPhone with wannabes — Microsoft, the Taiwanese and Koreans — not Nokia or Motorola. Yes, LG and Samsung are top 5 manufacturers, but they have been known for their manufacturing and not their software.

While Palm or RIM fans might disagree, overall Nokia seems to have the deepest and most consistent software operation of any handset vendor in the world. Cognoscenti talk about the N95 as the best multimedia phone not made by Apple, but it’s nowhere to be found. Of course, it doesn’t help that Nokia gave up on the CDMA (cdma2000) market and with it Verizon, Sprint and the various smaller carriers who comprise a slight majority of the US market. Since AT&T has no need for an iPhone killer, Nokia doesn’t have a lot of options here — foreclosing most of the market to LG, Samsung and Motorola.

So is this the list of best competitors to the iPhone? Or is it the list of vendors who want to buy market share through co-marketing dollars, price cuts and other incentives to AT&T’s rivals?

No comments: