Crop of New Smartphones Will Compete With iPhone

This holiday season promises a few answers to the iPhone from Apple’s (AAPL) competitors. So far, the T-Mobile G1, the Blackberry Thunder, and the Sony Ericsson Xperia X1 look like they could be contenders.

Smartphones, with their higher contract prices and upfront costs, tend to attract more affluent consumers. In this economic climate, where consumers may have less disposable income or just be unwilling to spend it, extending that appeal to a larger and already crowded market will be a challenge.

Still, the fact that millions of iPhones have been sold since July suggests that a high-end device’s appeal could extend beyond those in the highest income brackets. The $200 price drop and decision to sell the iPhone 3G at Best Buy may have been bids to broaden the device’s appeal, but do they seem to be working?

And they have, can other smartphones broaden their appeal too?

Read as: iPhone 3G researchers at AT&T in August were 26% more likely to have an annual household income of $100K or more than the average handset researcher

• Since the iPhone 3G was announced in June, the skew toward $100K+ income-bracket researchers has become less pronounced
• After mirroring the overall handset researcher population at the iPhone 3G’s announcement and launch, shoppers in the $60-100K income bracket were 8% more likely to be researching the iPhone 3G in August
• Even though people in the <$30K and $30-60K income brackets are significantly less likely than most to research iPhone 3G, they have been making up an increasing proportion of the research population since the device was announced

So, although the gaps are narrowing, the iPhone still appeals most to people with incomes over $60K. What does this mean for the new crop of smartphones?

People may become more price sensitive because of the economy, but iPhone is so popular with consumers any new smartphone hoping to appeal to a large audience would almost have to be priced at or below $199. T-Mobile’s G1 will follow this trend and sell for $179 with a contract.

A preferable strategy to reducing price, but probably a tougher one, will be providing consumers with a viable alternative that offers the same or better usability with a different twist. Devices with different form factors like flip phones and combining touchscreens with physical keyboards might help sway some people. The benefits of open-source based operating systems like Android may change minds. But we’ll need to wait until the end of Q4 to find out.

Comments

[reagan:]

iPhone will dominate as usual. Could careless about the competitors.

2008 Oct 01 02:21 PM

[typopolice:]

too funny, a computer company with a phone that's been on the market for a year is all of a sudden the standard that everyone is gunning for...and of course, this astutue writer thinks that apple is just going to sit there idle and watch everyone else up the ante.....

2008 Oct 01 02:29 PM

[chano:]

Your article is pointless. Tell us something that is not common knowledge. The more expensive things in life tend to be more easily bought by the more well heeled among us. So what's new? If you cannot appreciate what is now common knowledge - that the iPhone is so very very much more than a smartphone (as it used to be defined pre iPhone) that it is pointless to compare it with anything out there now, gPhone included. If you don't appreciate that simple game-changing fact, and further understand that it will take even the best of the also-rans at least 4 to 5 years to match the iPhone as it is today, then you should become a beet farmer. If you think that the app store is something special already, despite the variability of what's on offer there, don't you realise that there are totally new apps waiting to be conceived and developed that will raise the iPhone's functionality as a handheld computer beyond what it is today and most importantly, new app categories that add totally unexpected functionality to its capabilities as a phone ... and I am not talking about anything we could imagine right now. I refer to altogether new killer apps that add usefulness to telephone or comms functions beyond what we already have today. On day one, the iPhone had visual voicemail - a real boon to anyone who hated guessing who had left messages. It was so good it has been widely copied. Look next for apps and added functions that take us into areas of usefulness that others will find it hard to copy on their platforms. This has been hinted at by SJ and we can expect this kind of differentiating strategy to be implemented on Macs, iPods and iPhones. When you have a scalable OS, an ecosystem and tight integration of concepts and designs, you cannot be copied except in a superficial way ... things that (sort of) seem to be the same but are much more crude in their execution, simplicity and ease of use usw.
Who do I bill for your education?

2008 Oct 01 03:25 PM

[F. J. Taylor:]

Ho-hum! Yet another crop of would-be / wannabee iPhone "killers" and a writer who obviously doesn't know the field or what these devices actually are.

First, as I have said many times on these threads: iPhone is NOT a "smartphone" - it is a MID (Mobile Internet Device) - and it is the best - and so far the ONLY - one out there that is a true MID.

Second, regular wireless phones, even "smartphones" are passe for true mobile wireless internet device users, though there will doubtless always be a market, at least for the near to intermediate term. However, that market will never shop an iPhone or anything like it - because they can't afford it and generally aren't tech-savvy.

Third, my income is well below 100K, as is most of the people I personally know who already have or are planning on getting the iPhone. I don't know about you but I NEVER give my personal info to those wretches in marketing. If you do, you are just plain silly.

Fourth, Apple has the best OS and mobile OS available (OS X), and they interface beautifully - but will still work with those poor Windows users still mired in that drecky platform. As for the other abysmal "mobile platforms" being offered... the less said the better!

Fifth, I have used the touch screen. There are NO problems for the average user - even one with thick fingers who is a poor typist (like me). In fact, the intuitive nature of the app makes it even easier to type using this system - and there is nobody among the younger generation who feels the need for a physical keyboard, which just make the whole thing bigger and bulkier than it needs to be.

Sixth, I have spoken with AT&T sales personnel at our local store - which is in a small rural town in OR. They said the iPhone outsells all their other "smartphone" models by 25% - with the next closest model being their Blackberry. If that is indicative of actual sales nation-wide (which, judging by the fact that the iPhone is still flying out of stores everywhere, it is), I assume that means Main Street has already spoken.

As to the touted G1 - it is a clunky ugly duckling (though the Open Source model is one I support). However, like the Voyager and all the other "competitors", whatever their good features, they all lack the main item - Apple OS as their platform. I will not settle for less.

2008 Oct 01 03:43 PM

[KenC:]

Open-source OSes are not a mass-market selling point. Ask Linux all about it. The average user wants functionality and usability. He doesn't care whether it is open-source or not. It's like iTMS tracks. No one cares that it has DRM, because the DRM is not a hindrance. That's why Amazon's music store has made no inroads into iTMS share.

2008 Oct 01 03:47 PM

[Oh Blah Dee...:]

RE: F. J. Taylor: "... I will not settle for less."

Well said, and I heartily agree!

2008 Oct 01 09:10 PM

[Jazzkeys:]

Actually, the iPhone is not now, or ever has been the best PPC on the market. HTC holds that claim - first with the Kaiser (aka AT&T Tilt), and now with the Touch Pro & Touch HD. Apple has A LOT of work to do before the iPhone can be taken seriously as a competitor among "power users" to the HTC lineup (although Apple has won the ever so important marketing battle)!

2008 Oct 02 11:27 AM

[brewer:]

Riiiiiight. Any day now an iPhone killer will come out. Just like the iPod killer and Mac killers did. Note, windoze was not a Mac killer, only a Mac copier. Mac survived (unlike anything else MS tried to kill, Mac was too good even for the brutal monopolist.)

Apple is already ruling the smart phone market by totally redefining it. That is not going to change, especially by lame HTC, etc...

2008 Oct 03 12:06 PM