Apple could sleepwalk through its next iPhone release and competitors still couldn’t catch up, analysts say.
In fact, that’s what Apple seems poised to do, with only minor hardware updates likely for the third-generation iPhone, which Apple may detail at its Worldwide Developers Conference next week. But even with a lackluster upgrade, Apple has little to fear from upstart smartphones like the Palm Pre, which launches on Saturday, June 6.
Apple’s dominance in the smartphone market, combined with the iPhone’s already innovative feature set, put the company in a strong position to stave off competitors, including the upcoming Palm Pre, said Roger Entner, an analyst at Nielsen Mobile.
“I think the Pre holds up very well compared to the current second-generation iPhone 3G,” Entner said. “But the third-gen iPhone will most likely up the ante again…. If you only follow Apple, you will never catch up.”
Apple’s original iPhone launched in June 2007 with a $400 price tag for its low-end model. It wasn’t until Apple released its second iPhone, the iPhone 3G, with a $200 price tag that the smartphone exploded into the mainstream. Within the calendar year of 2008, Apple sold over 10 million units of the iPhone 3G, according to CEO Steve Jobs.
The company quickly established itself as a market-share heavyweight. And recent statistics suggest the iPhone shows no signs of flagging. A research report from NPD Group shows that in terms of consumer smartphone sales, Apple sold 24 percent of the U.S. market, claiming the title for No. 2 best-selling smartphone that quarter. That’s an improvement from the first quarter of 2008, when Apple sold 17 percent of smartphones in the market and held the No. 3 spot, according to NPD.
Also, research company Gartner recently released global smartphone numbers indicating Apple’s iPhone doubled its worldwide marketshare. Apple’s share of worldwide smartphone sales increased from 5.3 percent in the first quarter of 2008 to 10.8 percent in the first quarter of 2009, according to Gartner. And in terms of iPhones sold, Apple grew from 1.7 million units in the first quarter of 2008 to 3.9 million units during the same period in 2009.
The major difference this year is the emergence of additional iPhone competitors, including Palm’s Pre. Palm in January announced the Pre at the Consumer Electronics Show in Las Vegas, and many tech enthusiasts have been eagerly anticipating the Pre not only because of its iPhone-like touchscreen and form factor, but also because the phone was made under the direction of Palm CEO Jon Rubinstein, a former Apple engineer who was instrumental in the creation of Apple’s iPod.
The announcement of the Pre heated up tension between Apple and Palm. In a January earnings call, Apple chief operating officer Tim Cook gave a loaded response to a reporter’s question about the Pre, suggesting Apple might sue the company for copying the iPhone.
“We are ready to suit up and go against anyone,” Cook said during the conference. “However, we will not stand for having our [intellectual property] ripped off and will use whatever weapons we have at our disposal.”
Even if Palm’s Pre proves to be a compelling device, that doesn’t mean it’s going to threaten the iPhone, said tech strategist Michael Gartenberg.
“For Palm to succeed does not mean that Apple has to do badly,” Gartenberg said. “And likewise for Apple to succeed doesn’t mean that Palm is going to go out of business. There’s going to be a lot of room in the smartphone market for several players here.”
What do we know about the next iPhone? Nothing, officially. But mounting evidence suggests the third-generation iPhone’s main improvements include a digital compass, an improved digital camera with video-recording capabilities and auto-focus, and a speedier processor.
Sound exciting? Probably not. Either way, it doesn’t matter for Apple.
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Photo: Yutaka Tsutano/Flickr
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