Anatomy of a derp: the iPhone 4S and the tech press
by Jonathon Oake
I am not interested in the tech press, really. I skim, but I also trust that if there’s some big tech news I need to know about, I will find out soon enough through Twitter. If it’s big news, I would rather read it in the business press, like the FT, as they actually have an understanding of running a large consumer-durables manufacturer, which is what the tech sector is made of. I would certainly rather eat a razor-blade croissant than read Techcrunch, with its insider-y, deal-making, high-fiving bro-dudes, whom I loathe with a passion that breaks all barriers. Less said about Mashable the better.
But a major Apple announcement is one of those occasions you can’t ignore tech news, so through scarcely any fault of my own, I found myself reading about Apple’s fairly major upgrade of one of their highly successful products. And what a pile of complete bullsh*t it was. I’m not even talking about the incredibly-specific-yet-100%-wrong predictions about an iPhone 5 release, which Gawker hilariously chronicled here. I’m more concerned with the [ahem] “analysis” after the launch.
I take as a typical example this piece. It wasn’t the worst I read; far from it. In fact I actually value Delimiter’s coverage, when I read it, and think the site’s operator, Renai Lemay, is perhaps the best tech journo in Australia. It just happens I didn’t rate this piece, and it is the closest to hand. Let’s begin with the Survivor-referencing headline:
Apple just lost Australia’s smartphone conch
It’s never properly explained what it means to own the ‘smartphone conch’, although it doesn’t relate to anything significant like sales or market share. My best guess is that ‘losing the smartphone conch’ means Apple has lost whatever it is that makes the tech press breathlessly report everything they do – and frankly I don’t believe that for a second.
The handset’s predecessor, the iPhone 3G, had, after all, literally set the world on fire when it launched 12 months previously
Apart from a few episodes like this I feel this is something of an over-claim.
The launch of the iPhone 3G was particularly huge in countries like Australia, [...]. The week of the launch felt like a festival in Sydney, where many fans queued up for days to buy an iPhone at midnight, accompanied by lavish parties put on by the major mobile telcos.
Do you remember that wonderful, magical time, back in 2009 when the iPhone 3G was launched? Feasts, all-night parties, Roman orgies and dancing in the streets? Nope, me neither. I also question use of the word ‘many’. According to analysts from IDC, Apple iPhone accounts for approximately one-third of all new Australian mobile phone sales. Only a tiny proportion of these millions of phone buyers actually “queued up for days” and I’d suggest the behaviour of a very small segment of atypically-loyal consumers is a poor metric to gauge success of what is mass-market consumer hardware.
By comparison, iPhone 3GS week in Australia in June 2009 was still big, but there was a more muted feeling about the festivities. [...] Engadget summed up the feeling well in its review of the iPhone 3GS. “The iPhone 3GS is a solid spec bump to a phone you already own … but it is, at its core, a phone you already own,” wrote the publication, questioning whether a tech specs speed bump, a compass and video recording features were worth paying a hefty upgrade fee.
For 99% of consumers, there is no level of upgraded tech enough to justify a ‘hefty upgrade fee’. Consumers – actual, normal civilian people of sound mind – don’t just throw their old phones in the bin every time a new iPhone is announced. That is what tech journos do. Normal people wait until their contract is up and then they buy the best new phone available, based on comparisons of price, features etc. If Apple can make a competitively priced and featured phone, and history proves they can, then they will sell very well.
HTC’s Dream handset, which was viewed principally in Australia as a curiousity which would appeal to die-hard anti-Apple bigots who would prefer to opt out of its somewhat restrictive ecosystem and choose a more open source, half-baked iPhone alternative.
Rubbish, unless by ‘Australia’ you mean ’me, and other tech journalists’ rather than ‘actual Australian mobile phone buyers’. In which case Android models like the HTC Dream were viewed as possibly inferior but also cheaper iPhone alternatives and purchased accordingly.
In short, the iPhone 3GS succeeded in Australia because it represented a substantial upgrade on a phone which was already independently setting the market on fire, at a time when the competition was extremely tepid. The iPhone 3G was a paradigm changer and the 3GS accelerated the change.
Unlike that previous incremental Apple upgrade, the iPhone 3GS, the iPhone 4S is not a paradigm-changer, and it does not launch in Australia at a time of diminished competition in the market.
This whole article is making a tremendous song and dance around a simple, banal fact which ought to be obvious to anyone with business sense: the smartphone market is reaching maturity. A mature market is defined by a relative (a) lack of innovation (b) stable market share and (c) slowing growth. Having said that, the smartphone market is still growing relatively sharply, although innovation and market share have stabilised. And none of this is Apple’s fault; it just happens as markets play themselves out. There’s not a lot, having created this market through their own innovation, that they can do about it, other than the totally unrealistic expectation that every product release would be revolutionary like an iPad or iPhone 3G.
And furthermore, it’s not in Apple’s interests to be totally revolutionary with every announcement. As is pointed out in this excellent post, the R&D cost of a major hardware form factor upgrade is significant. So much so that if Apple invested in ‘revolutionising’ their hardware with every update it’d cut into their profits quite a bit. Having a minor upgrade in between cycles allows them to recoup their R&D investment and make a handsome profit.
[When considering those casual, non-early-adopter customers] who are coming to the end of their Apple or Android plan, that you start to realise that the company is going to face a pretty harsh dogfight for market share in the short to medium term.
These customers make up 99% of mobile phone buyers, and the author is describing a normal, mature market. However, with Apple’s excellent pedigree and world-leading branding, I think they’re pretty well placed. In fact, I can’t think of any other company in any other consumer segment the size of the smartphone market that is doing anywhere near as good as Apple is. Not computing, not apparel, not automotive, not retail, not entertainment, certainly not FMCG. After all, there’s only really two smartphone brands in the market: iPhone and not-iPhone.
Australians are currently quite enthused by the [Windows Phone 7] system in general.
Oh, come on. Citation needed. Really needed. I am peripherally interested in tech, and have never heard of the Windows Phone 7, so am frankly sceptical that actual, normal Australian phone buyers could care less about it, let alone be enthusiastic about it.
Now, none of this is to say that the iPhone 4S won’t sell well in Australia. The iPhone 4 needed an update to keep up to speed with the competition, and the company’s announcement this morning was precisely that. On paper (we won’t know more until review houses get it into the labs for testing), the iPhone 4S will easily take its place amongst the top ranks of Australia’s smartphones. It will hold the line for Apple in terms of market share.
In other words, the Apple iPhone 4S release is the entirely predictable continuation of a proven, successful product strategy the company has pursued for quite some time, and any sensible person who isn’t a complete idiot can see that it will likely continue to be successful.