Gphone vs. iPhone vs. Windows Mobile

This week, the first of the gPhones was formally announced: the HTC Dream. Google’s attack on the phone market is vastly different than Apple’s, and could, if we measure success by volume, be much more successful. This is an interesting fight, because the market emphasis is increasingly shifting from PCs to smartphones, and this new battle may well redefine the market influence of the various players, with Microsoft the most at risk (because it is dominant) and Google with the most to gain (because it is just entering).

In a number of areas, Japan is one of the leaders; kids are already using their phones vastly more than they are their PCs for text communications, and activities that traditionally would have required a PC. I even ran into a survey around two years ago that indicated this young demographic was questioning the need to have a PC at all. In effect, the smartphone is probably about where the laptop was about 20 years ago, but it is on a much faster adoption curve – largely because PCs have blazed the trail.

Let’s look at these three contenders and compare their strategies.

Google’s Dreams, Apple’s iStrategy, and Microsoft’s WinOpportunity

Google wants world domination with its Chrome browser and Android platform. But if it happens, it won’t be because of the initial HTC Dream phone, but due to a blending of Apple and Microsoft concepts into a different strategy that appears to cherry pick from a number of areas.

HTC is one of the leading suppliers of Windows Mobile based smartphones, selling one out of every six smartphones in the US. Windows Mobile is actually, at an estimated 26 million sold, more successful than the iPhone in terms of volume. But none of its phones have created the buzz the iPhone has created, or driven the kind of changes in phone design that Apple has demonstrated. Microsoft may have more volume, but Apple, at least at the moment, has more influence on the market. Microsoft has more volume because it is hardware independent, and executing a plan that is more similar to the one it executed with Windows for PCs. Plus, it started years before Apple or Google did.

iPhone Advantages and Limitations

Apple’s iPhone is currently the Model-T of smartphones, by which I mean that you get a limited choice of designs and colors, not that it is old. You can have any color as long as it’s black or white, and any size as long as it is the one size offered (granted, you can choose capacity, but a “line” of phones, it isn’t). You can also have any carrier in the US, as long as it is AT&T, and you can run any application, as long as it doesn’t create a competitive problem for AT&T or Apple. In effect, with respect to applications and competition, it is like someone took a lot of the complaints folks have made about Microsoft, and wrapped them up into an Apple strategy. Of the three companies, Apple is the most limited. Strangely enough, its device is also the most desired, which is a credit to Apple’s design and execution, but probably suggests some of us are giving up our freedoms too easily.

The phone is incredibly easy to use, and connected to two market-leading services: iTunes and the Apple Application Store, both of which currently dominate the competition in terms of interest and capability. But there’s also a troubled service in the mix: MobileMe, which promised much, but has been having serious problems. Apple is good at connecting to its own things. Connecting to other people’s stuff has been clearly problematic.

Windows Mobile’s Advantages and Limitations

If Apple is about simplicity, Microsoft’s platform is about choice and connectivity. Windows Mobile is sold on phones from a wide variety of vendors, ranging from Palm to Motorola and HTC. They come in different sizes, shapes, and colors, and even offers different interfaces (though that is still more the exception than the rule). The Windows mobile platform connects back into Microsoft’s much more robust back end of communications offerings, led by Exchange, and the phone also has third-party developer support. However, there is nothing yet like the Apple Application store, substantially reducing volume of programs available and ease of installation. 

Microsoft also lacks any one phone that has the kind of excitement created by the iPhone. Even the CTOs in one company that makes Microsoft Mobile phones carry iPhones. HTC has been the most aggressive in creating an iPhone-like front end for Microsoft’s Mobile platform, and its Touch line (and it is a line) comes the closest to the ideal created by the iPhone. The Sprint version of the HTC Touch Diamond (due largely to Sprint’s services) comes closest of all the phones currently in market

Microsoft falls apart on closing the user experience, and the marketing gap between Apple’s offerings and its own. With its new $300 million campaign it’s working on that second issue, but the user experience issue may have to wait until the next version of its platform, or until more manufacturers take HTC’s lead and build touch interfaces into its Windows Mobile phones.

Google’s Chance

Google has created an ecosystem of services and partners that rivals Apple’s, and approached a number of the phone manufacturers to assure it gets Microsoft-like coverage. The first phone, the HTC Dream, is more of a blend of RIM and Danger concepts then it is the kind of direct attack on the iPhone, but it is only the first of many phones. Strangely enough, it comes in the same initial color choices the Zune initially did (black, white and brown,) suggesting HTC either missed a meeting or reused the research that Microsoft likely tossed out when the initial Zune failed. (I mean seriously, brown, again?) 

First impressions can be very powerful, if positive, and very hard to overcome if not. So far, the public’s impression seems mixed. Other than the fact this is a Google phone, few seem that excited about it. But the launch campaign hasn’t started yet, so this may change. I’m already getting the sense that the launch is more similar to a traditional Microsoft one than an Apple event, which typically isn’t a good thing. Still, the Android platform is designed to work off back-end services, and Google has done a better job of both assuring the initial set of applications (about 90% of the Apple Applications aren’t very good, some are clearly great) are good, and on being more liberal with them (they don’t have Apple’s Big Brother competition problem). They also have Amazon providing the multimedia services, providing a strong alternative to iTunes.

Overall, even though we initially only have one phone, it’s not a bad strategy. (But really, brown, again?)

Who Wins?

Regardless of the market-share lead Microsoft has, Apple has emerged as the leader for the time being, simply because most of the major players are following it. The company’s limitation is scale, in both company size, and line breadth (we aren’t a Model T, one-product-fits-all world). If Microsoft and/or Google can close the design, marketing, and user experience gap with Apple, they could take the lead, because neither has the same scale issues. But this isn’t a multiple-choice challenge: They have to do all three. And so far, that has been very difficult. For instance, only Apple has subordinated the carriers to own the user experience. No one else has successfully done this, though Nokia tried, and this has given Apple one more unique advantage.

If I’m right, and the market at large moves to a future version of one of these platforms, Google and Microsoft will likely eclipse Apple, much like Apple was eclipsed by Windows in the desktop market decades ago. Apple’s single-vendor strategy can’t scale to the kind of numbers this opportunity represents. (In 2007 there were 3.3 billion cell phones in the world.) But no vendor can, and unless Apple can fix its scale issue, they will be a niche player, with someone else (and it could be someone other than Microsoft or Google as RIM, Symbian and LiMo are also contenders) taking the lead.

The views expressed here are solely those of the author and do not reflect the beliefs of Digital Trends.

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