Apple Attempts to Corner Smartphone Market

At the World Wide Developers Conference, Steve Jobs announced a new iPhone with 3G support and GPS. Neither of these were particularly surprising. After all, people have been upset about the lack of these technologies since day one. Not that that stopped a large number of people from shelling out $600 for the phone in the first few months, but everyone was upset about the missing technology.

No, what was surprising, was the announced pricing. An 8 GiB phone for a mere $199 (with a two-year contract through AT&T), or the 16 GiB for $299. This is a price point that has finally brought a few people who were still unwilling to take the iPhone leap seriously considering taking the plunge. Now, it’s no longer the price of the hardware, but the $70/month cell phone plan that has to go with it.

So, why the price drop? Well, in addition to the features that matter to the Enterprise, like Exchange Integration, the iPhone was still a little expensive. By allowing the providers to subsidize the cost, more people are likely to buy iPhones, further eating into the share of Blackberries and Palms. With the recent release of the SDK, and the launch of the iPhone Apps store, Apple stands to make ~30% off the sales of every application delivered to an iPhone. And developers seem to be excited about it. Not me, so much, since the only Mac I own is PowerPC, and there is a good chance Apple is preparing to give me the finger anyway.

No, I think the real reason is that Apple is trying to cement their position in the market before the Open Handset Alliance can get a single Android phone on the market. HTC has promised a few phones by the end of the year, but as it stands, Android needs some movement.

In my opinion, Android is the superior developer’s platform. It’s open, all applications are created equal, and unlike the iPhone it allows more than one application to be memory resident at a time. Plus, it doesn’t have the same restrictions on it as the iPhone. I fully believe that Android, despite it’s insistence on Java, is the more developer friendly platform. And the Java insistence is not so important in the mobile realm, which is mostly dominated by J2ME developers.

Apple may be the purveyors of all that is hip and modern in the modern realm, but without developers, a platform can’t really succeed. It was the adoption of a Unix core for Mac OS X, and a more advanced UI toolkit has been largely responsible for the growing success of the Mac platform. However, if you’ve got the majority share, people won’t have a choice but to target your platform.