The key to iPhone 5's success

The future of smartphones will have less to do with hardware and software and more about mobile service advancements. If the iPhone 5 showcases a step in this direction then Apple's dominance is assured.

Hopes are running high this week.  For improved employment figures, for a stronger stock market?  No–for the new Apple iPhone 5. 

I’m not sure what people really expect, or want.  I guess that’s what’s so special about the launch of a new iPhone,  Apple seems to know what we want before we do.  When the iPhone 3G was launched, Apple set the bar for smartphone software–in both defining how the user experience on a phone should be, and with compelling apps and content that we could hold in our hand anywhere. 

No one thought the phone itself was great–but that was mostly ignored.  With the iPhone 4, Apple did it again, but this time it was the hardware everyone loved (even the issue about the antenna didn’t dampen sales).  The better resolution display, the sleekness of the design, the feel in the hand–all of this put Apple above anyone else on the smartphone market in terms of hardware. 

A year or so later, the 4S came out–looked the same, felt the same, and really was similar to the iPhone 4.  It was called “evolutionary” not “revolutionary.”  This is code for “people expected more, but hey–this will do as an upgrade.”  And it sold well.

Now high hopes have been placed on the iPhone 5.  With the iOS 6 announcement earlier this year, many people feel (fear?) that this is yet another “evolutionary” phone.  No big software changes were seen, mostly users expect a larger screen by .5 inches and a faster wireless radio based on LTE.  Is that all?  Will that be good enough to sell 10 million phones in one week–a major record? 

Probably. We won’t know what the phone will look like or do until it is announced but I don’t expect it to change that much in the look and feel.  I think the standard is out there now. Phones are big enough, light enough, bright enough–it’s hard to be innovative and revolutionary again.  My belief is that it will be some time before we see such a sea change in hardware and software.  So what can Apple or others do?

The real opportunity in the future is not based on hardware and software advancements as much as mobile service advancements. Whether this is through music, media (books, magazines) video, gaming or other applications, this is where the real revolution is due. 

Changing the ways people view movies or TV, how they read and how they spend their dollars, this is the next frontier and one I predict is only just beginning.  Amazon is expected to be a big player in this space, no doubt, Google too. I expect the future will be less about hardware and software and more about usage.

Phillip Redman is a research vice president in Gartner Research

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