The iPhone continues to defy signs of market saturation, being plagued by some difficulties in the stock market and a continued surge from competitors such as Samsung, Google and HTC. The smartphone and its ecosystem of apps, games, and media are incredibly profitable and makes up the majority of the company’s profits. Chief rival Samsung is making some serious inroads into Apple’s elite smartphone status. In an interesting Gizmodo piece, Ralf Rottmann describes his self-admitted love for Apple’s iPhone and other Apple products and eventual defection to an Android smartphone. Rottman is a successful iOS developer who has come to embrace the Samsung Nexus 4 completely. In it he describes the realization of his experience in coming to this enormous change. Everything from the performance and smoothness of the product to cross-app and OS level integration, the stunning level of customizability, app quality and variety was covered and it also included the wish list of items he would like to see. It’s a fascinating look at the incredible job that Samsung has done in delivering a polished useful smartphone experience, so much that a dedicated iPhone power user has made the decision to make this move.
Despite such compelling stories, the iPhone continues to gain and dominating the US smartphone market share. In a recent ComScore report based on the time frame up until November 2012, it is revealed that Apple’s market share rose to 35%, a trend that has put the others to shame, along with Google’s dominant smartphone mobile OS platform at 53.7%. Apple can thank the introduction of the iPhone 5 in that last quarter for the consistent strong sales, but one has to wonder how this continues to be the case. Just recently Consumer Reports, the poular and trusted american review magazine ranked the iPhone 5 as the worst of the top smartphones. The phone ranked behind a number of competing smartphones, and not all of them are the latest and greatest. In looking at the top AT&T phones, the device ranked behind the LG Optimus G and the Samsung Galaxy S III. Among Verizon’s phones, the smartphone ranked behind again the Samsung Galaxy S III, Motorola Droid Razr HD, and the Motorola Droid Razr Maxx. Noticeably the lists do not yet include Microsoft’s Windows 8 smartphones, which emerged late last year. While there is mixed opinion on how the Windows 8 phones will succeed, it is also clear that the enterprise has not fully had its say and could change this picture yet again.
Investors appear to have noticed this kind of thing as talk about underwhelming product releases and other news bits have emerged. One report had Apple cutting its build orders by up to 25% by some counts. The introduction of the iPad mini is also projected to dilute Apple’s profitability margins, and that has investors wincing. Low-priced phones from competitors are increasing in quality and have become competitive with their product. High-priced, high quality phones are as reported here- threatening to convert users away from the ecosystem altogether. Apple no longer has the only viable smartphone in town and this has diminished Apple’s leverage throughout the market. When was the last time you heard people talk significantly about the “iPhone killer”?
For the time being, Apple has a lot of mileage left in its iPhone 5 platform, we may be seeing a warm-over perhaps as early as this summer. Fortunately the nextWeb has reported on some indications that the iPhone 6 development is already in progress, with iOS 7, though few details are available on when this phone may emerge or specifications.