We Need More Good Smartphones

Phew.  10:30am on Friday morning and I've just finished an intense run of exams.  I had an in-class exam on Wednesday, one this morning, and then three take-home exams that were all due today.  Needless to say, the last few days have been busy, so as much as I've been wanting to write, the time just hasn't been there.  Well, unless you suggest I cut into my "rest my mind with video games" time, which is a ridiculous thought.

So I'll throw my article reference on the bottom this time, since this is just a quick opinion article, and not a "What the heck, man?" segment.  I recently read that Apple owns 73% of all operating profits in the smartphone market.  Samsung checks in at 26% of all operating profits, leaving about 1% for every other competitor (which, the only other competitor really making profits is HTC).  We all know that the iPhone is a stellar and popular product, but how is it so dominant?  Well, because we as consumers have built it into the mecca of smartphones, carriers are now paying Apple large sums of money to have the iPhone 4S available for their networks.  Think about it: Apple has the one product that everyone seems to want, so if an AT&T or Sprint or Verizon does carry the iPhone, they stand at a huge competitive disadvantage, and their customers may jump ship to a carrier that does have the iPhone.

Unfortunately, the solution isn't as simple as having consumers buy other smartphones, as many many iPhones are currently in use now, so the carriers cannot drop their coverage.  If one carrier has the decency to be brave and drop the iPhone, that could change the game dramatically.  Suppose Verizon suddenly declared they were going to drop coverage for the iPhone.  Certainly, their customers would be annoyed, but because Verizon is usually ranked first among national carriers, the quality of their service could carry them past the initial hit, and they could help other phones become players in the market.

It's a simple marketing question.  What do consumers care more about: the quality and functionality of their phone, or the quality and service of the provider?  Currently, the answer seems to be the phone, meaning that a major carrier dropping coverage for the iPhone isn't really a viable solution, either.

Thus, it's simple: we need more good smartphones.  The Android operating system seems to be getting stronger, and other companies seem to be building phones with similar functionality to the iPhone.  If they can keep their costs down (and as a result, keep their prices down), other companies will be given the chance to compete with Apple.  It's comparable to the market for tablets: the iPad dominates the market, but with new cheaper alternatives like the Kindle Fire, other companies are slowly chipping away at Apple's dominance.

Lastly, I will fully admit that while I appreciate Apple's savvy business model and the successes they've achieved, I believe it's time to bring the competition back into the fold, to force Apple to continue to innovate and make good things.


http://news.cnet.com/8301-13579_3-57427811-37/apple-samsung-put-hammerlock-on-smartphone-profits/