Apple announced on Tuesday that it had sold 1.5 Billion iPhone apps in the store’s first year of operation. The cumulative power of this number is staggering in and of itself - it’s a telling reminder of the success of Apple’s much-loved and discussed device. But beyond this number is perhaps a deeper insight into the future of mobile handsets, a future where software will matter more than the device itself.
Given the way consumers have been lusting over coveted new handsets like the iPhone 3GS, Palm Pre and Nokia N97, this might seem to be a contradiction, but it’s not. The increasing consolidation in the electronics and chip-making business means that any hardware innovation will quickly be copied by competitors, making any device's advantages short lived.
This is not true however of software. Consider the PC industry in the 1980s and 90s, where the components of the average computer became increasingly standardized and interchangeable, making the software your machine could run (productivity apps like MS Word, games, etc) the actual selling point of the computer. One need only consider the early dominance of IBM/Windows machines in breadth/depth of software vs. Apple computers to see the difference. The same scenario is likely to “ring” true for mobile devices as well, where the utility and entertainment value of game-changing mobile software is going to become the key point of differentiation.
A phone's success will also depend on the type of innovation coming from developers and device manufacturers. In the app wars going on right now, a lot of Apple's competitors are trying to imitate it's success through very similar app store interfaces. The idea would be to provide some exclusivity that can really appeal to potential customers and that ranks high in usability. No one can deny that BBM is a reason why many BlackBerry owners haven't switched to the iPhone. Users can also be a source of innovation, and app makers must keep their ears to the street. This week, BlackBerry launched an exclusive social network, myBlackBerry, for customers to share their favorite apps and BB tips. The idea emerged after many complaints that the BB app experience was lacking a user perspective.
At this point, Apple happens to be the most attractive provider in terms of this software/hardware synergy. They currently have not only the most advanced mobile device, but also the largest base of customers, making them the most attractive partner for mobile developers. But who’s to say this arrangement couldn’t be upended by a rival?
To do so, Apple’s competitors like Blackberry, Android, Nokia, Palm, Samsung and Sony Ericsson are going to need to move beyond their current focus on higher megapixel cameras and touch screens. Instead they must embrace unique and compelling mobile software platforms, streamlining their bland app store offerings and mobile OS choices to maximize end user benefit.
