Phone Wars: Android and iPhone Create a Storm

Imagine being able to carry a computer in your pocket with you to work, church, or school without worries that it will weigh you down. Imagine being able to listen to music whenever you want, communicate with whoever you want, and create any document you want at the convenience of your fingertips at any time of the day. What device does all this in such a compact casing?

A laptop? Smaller.

A netbook? Even smaller.

A cell phone. What was once a brick-sized device that could store maybe a 100 contacts and was intended to only make and receive emergency phone calls, the cell phone can now do so much more. Cell phones of 2009 are slim, can take pictures, text, check and compose emails, create, review, and revise documents, browse the web, and stream video. It's amazing to see what phones are now used for. I'd even venture to say that over 50% of cell phone usage is not to make or receive calls. With these new demands of cell phone users, how are cell phone providers reacting? How are they staying one step ahead of the consumer and making sure that they beat the competitor?

The first real revolutionary cell phone (in my opinion) was the Blackberry, which was released in 1999. With a full QWERTY style keyboard and internet access, a device with similar capabilities of its size was unseen and unheard of. But this phone was limited to the corporate user. Research in Motion (RIM), creator of the Blackberry, understood the corporate user fairly well. They provided him/her with enterprise email, a calendar, and wireless internet. But RIM soon realized that there was a segment out there that they weren't tapping into. Cell phones were used by everyone, so why had they focused only on the corporate user?

Enter the Blackberry Pearl. The release of the Blackberry Pearl blurred the lines between personal and work life. More compact and "hip"-looking, RIM was beginning to understand the regular cell phone user. This was the cell phone user who was still unfamiliar with 3G and WiFi; the cell phone user who had not heard of a smartphone or its functions. Blackberry was slowly introducing new functions to the cell phone user.

Aside from big techies, hi-tech phone functions were relatively foreign to everyone. But as time progressed, more and more people began to learn about these new functions. Wireless capabilities and constant connection to the world-wide-web became a common demand. So Apple decided to meet those demands and more.

Before the iPhone, Blackberry was the only large player that had added functions other than texting and phone calling. While geared more towards the regular cell phone user and not the corporate user, the iPhone added features that were unimaginable by the cell phone user. Touch screen and streaming videos from the internet, the iPhone user was getting a whole new experience from their cell phone.

The iPhone was much more successful than the Pearl at capturing the regular cell phone user market segment. By allowing users to “customize” their phones by downloading iPhone Apps for a small fee, users were taking more ownership to their phones. Apple set the stage for future phones to come. Google’s Android/G1 project took customizability to another level. By catering to the open-source user, anyone can write and share programs for free.

So where was RIM during all these releases? While Blackberry was sitting back and watching all these new competitors pop up in its landscape, it decided to create a Storm of its own, literally. Blackberry may have been less successful than the other two at capturing the personal cell phone user, but Blackberry knew what it was good at – selling phones to the corporate user segmentation. The Blackberry Storm was RIM’s reaction to the iPhone and G1. Due to high switching costs, corporations are likely to continue to use Blackberry products. But those that wish they could carry an iPhone or G1 into their office meeting have a product that is friendlier for the corporate environment.

The next moves of cell phone makers are unpredictable. As new market segments continually sprout up, cell phone makers have to tailor experiences to fit their needs. And with so many options to choose from, cell phone makers have to make sure that their product fits exactly what the consumer is looking for.

This topic of cell phone wars interests me because I am a huge fan of technology. As an early adopter, I’m always reading up on the newest technologies and trying out beta versions of the latest gadget or software.

The topic of phone wars relates to our class because it addresses the need of cell phone makers to tailor customer experiences for specific market segments.

In Fortune’s January 19, 2009 publication, I found an interesting article about iPhone trying to go corporate after the release of the Blackberry Storm. It discusses how Apple may have found a roadblock because it is not as corporate friendly as its rival.

It’s hard to tell what the next move of Google, Apple, or RIM will be as they try to stay ahead of each other and ahead of customer’s expectations. Until one phone maker finds a way to truly capture the entire cell phone market, the phone wars will continue. So pull on your silicone cover and get ready to text for help because it might get bloody.