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Published 27 December 2012 04:55, Updated 14 January 2013 05:14
While Apple has typically limited the different number of devices available to avoid confusing customers, the recent launch of the iPad Mini tablet shows the company is being forced to develop products to combat competitors. Photo: AP
Apple’s iPhone is under sustained attack from Google Android powered handsets, leading some to suggest the gadget maker may have to move down market next year.
Nokia, Microsoft and BlackBerry maker Research In Motion are also under the gun as they struggle to regain authority in the world’s hotly-contested smartphone business.
Heading into 2013, Apple’s iPhone operating system – once the undisputed king in the smartphone arena – has found itself in the uncomfortable position of losing its No. 1 place to Google’s Android, thanks in large part to bitter rival Samsung’s roaring success.
What’s more, Telsyte analyst Foad Fadaghi suggests the California-based gadget maker’s relentless focus on the high end could leave it with little room to move, at least in mobile hungry Australia.
Fadaghi says the top end of the market is already aligned with Apple or Android devices. Instead, it’s the lower end of the market is still up for grabs and Apple is yet to join the contest.
“Even on plans iPhones are not cheap and it is logical Android would be the number one platform, just by the sheer nature of availability and different price points, all the way down to the sub $200 category,” Fadaghi says.
“More than half Australians have a smartphone now, so we are now looking to the second half of the population, that don’t have the economic means, and are relying on hand me downs and things like that. That market has really gravitated towards the lower end Android products that are available.”
While Apple has typically limited the different number of devices available to avoid confusing customers, Fadaghi says the recent launch of the iPad Mini tablet, showed the world’s richest tech company was being forced to develop products to combat competitors.
The iPad mini was launched in response to the flood of Android devices available in smaller form factors than the iPad and at lower price points.
Telsyte’s research in December showed that Australian sales of devices running on Google’s Android operating system overtook Apple’s iOS for the first time, thanks largely to the popularity of Samsung smartphones.
Then speculation began to mount in earnest about what the next generation iPhone may look like, even though the latest model had only been available for since late September.
Peter Misek of investment banking firm Jefferies, set tongues wagging by suggesting that Apple would break from its traditional annual release cycle to launch the new device – labelled the iPhone 5S – in June 2013. He tipped that the iPhone 5S would come in a range of 6-8 colours, rather than just black and white, include a new higher definition screen and camera, have 128GB of storage and incorporate a near field communication chip.
Head of mobile at St George Bank, Travis Tyler, recently told The Australian Financial Review that banks were changing their approach to designing mobile apps to take account of the changing balance of power in the smartphone market. Whereas previously apps were designed for Apple’s iOS operating system first, they will now be designed for Android concurrently.
Tyler says 25 to 30 per cent of St George mobile customers are now on Android devices, and that this percentage was on the rise.
“The devices and the operating systems are kind of on a par now, and some of the shine has come off Apple with things like the Maps debacle,” he says.
CHALLENGER BRANDS EMERGING
Meanwhile, some of the world’s biggest technology companies have earmarked 2013 as a crucial year, as they seek to loosen Google and Apple’s grip on the smartphone market. Global figures looking at 2012 phone sales from IHS iSuppli showed that despite launching its new Lumia range of smartphones, Finnish giant Nokia was felled from its long-held position as the most shipped phone brand by Samsung.
Reports said Samsung will account for 29 per cent of worldwide mobile phone shipments in 2012, up from 24 per cent in 2011. Meanwhile Nokia’s share dropped to 24 per cent from 30 per cent. It had previously dominated due to its feature phones, which do not feature the touch screen or advanced smartphone features.
In terms of smartphone shipments, Samsung’s range of phones saw it extend its lead over Apple. It had 28 per cent of the market, up from 20 per cent in 2011, with Apple’s share at 20 per cent, up from 19 per cent a year earlier.
Microsoft will be hoping Nokia’s Lumia phones, which run on its Windows Phone 8 operating system, will help it gain some traction in the smartphone market. However, the IHS iSuppli numbers were dispiriting, showing a smartphone market share fall from 16 per cent to 5 per cent for the Finnish company.
MAKE OR BREAK FOR BLACKBERRY
But its BlackBerry maker Research In Motion that has the most to lose in early 2013, when it’s due to launch the BlackBerry 10 operating system and accompanying phones at the end of January. The IHS iSuppli research showed that in 2012 BlackBerry’s market share dipped from 11 per cent to 5 per cent in 2012.
Early signs are that app developers like the new BlackBerry operating system, but serious doubts remain about whether the once dominant brand can win back enough of the market it has lost to Apple and Android.
“We think BlackBerry are going to have a difficult time challenging for the market. It should be able to maintain its market share, and will maintain a niche user base,” Fadaghi says.
“The product will appeal to those that don’t want to have a popular model, and want to stand out from the crowd. Critical for BlackBerry will be having a strong product that can compete and the applications ecosystem to support that.”
SMARTPHONE RACE WATCHED BY BANKS
At St George Bank, Tyler says analysis of the numbers of customers using BlackBerry devices was so small that the bank couldn’t currently justify the expense of further investing in mobile apps to run on BlackBerry.
He says even though the BlackBerry operating system may appeal to app developers, it wouldn’t necessarily make the devices relevant to enough consumers.
“I think this is make or break for BlackBerry, but when I look internally at the bank, our own staff can’t wait to get off them,” Tyler says.
“If our customers end up going back to BlackBerry then we will obviously build apps for them, but they are not there at the moment.”
Some of the banks remain crucial to BlackBerry in Australia, they are still favoured by some business users, who value the security of the devices over the flashier functions of iPhones and Samsung Galaxy SIII’s.
National Australia Bank’s top technology executive Gavin Slater says the bank had no plans to ditch the BlackBerry any time soon. Saying he, and many of his executives prefer to use a BlackBerry alongside other device, like Apple’s iPad.
“For us BlackBerry has offered what we need, which is essentially a combination of being able to make phonecalls and emails. It does that well and it offers good security,” Slater says.
Commonwealth Bank of Australia tech chief Michael Harte says his bank is not writing off any of the major phone providers and will invest its development dollars to create apps suitable for many devices, including BlackBerry.
He says the market is too volatile to believe that the current state of play meant anyone was out of the running.
“I think it is all hogwash that BlackBerry is a dead company. In some countries they are the most dominant provider,” Harte says.
“If you look at the latest stats, you see Samsung is outselling Apple, even in its home market, which is a real turnaround. So why would you be beholden to a race that you can’t have any influence or control of? We have to be indifferent to it and accept that customers choices are paramount.”
This article first appeared on afr.com