The smartphone market is cutthroat: it’s overrun by dozens of competitors all trying to grab a piece of the pie, usually from Apple or Samsung these days. That hasn’t always been the case, of course. Motorola once had a market lead in the mobile market. And once upon a time Palm made some of the most popular smartphones. There are several companies trying to get their feet wet with new handsets, now, and we thought it might be compelling to go over a few of the base points that are required for a successful smartphone launch. And even still, it’s never guaranteed for the success of a smartphone ultimately depends on the market’s reaction.
These days it seems more important than ever to have great software running on a smartphone. Without great software, users are left wondering what it is exactly that they can do with their phone.
Apple is perhaps the keenest to this, and has created an operating system that’s easy to use, though incredibly powerful. Give an iPhone to a first-time smartphone user and walk him or her through the basics and they’ll be off running in no time. The same isn’t always true for other smartphone makers, but software is still a key focus.
Samsung and HTC have developed amazing skins for Android that enhance the user experience – creating a compelling reason why consumers might pick up the HTC One or the Galaxy S4 over the dozens of other Android smartphones on the market. Software, is perhaps, the reason Windows Phone still lags. While it’s new and refreshing, Windows Phone devices are more limited — by software alone — than Android and iOS devices.
I’ll branch away for a moment, but only to prove the success of powerful software: the Amazon Kindle is sold by Amazon at cost, though through its great software it’s able to sell books, music, movies and more. Without that software, the Kindle wouldn’t be a profitable business model.
Design and Hardware
Design is always important and there are a few aspects to consider: price at the cost of design, build quality and ease of use.
Let’s consider the price of design. A phone maker needs to think where the device will be sold and what’s affordable in the market. The iPhone 5 and HTC One are incredibly attractive devices and draw the eye of smartphone buyers with plenty of cash to spend in developed markets, but what about emerging markets?
In that case, in an effort to keep costs down, smartphone makers may move to lower quality displays, cheaper build materials and less powerful processors in order to make sure they can sell devices that are affordable in the target market.
A report from Frost & Sullivan last year found that the “rule of thumb” in China, for example, is to price a smartphone around 70 percent of the average monthly salary. The iPhone, meanwhile, costs two times the average monthly salary. It’s no wonder why Apple is trying to build a more affordable option and, no surprise why local phone makers and Samsung currently have a big lead in China.
The price of the build of materials needs to be practical from a business sense, too. The more a device costs to make, the more often a company has a smaller profit margin on the device. If it costs $200 to build, for example, and you’re selling it to carriers for $400 then you have the potential to make $200 on each sale. If it costs $350 to build and carriers won’t budget over $400, then a phone maker is only making $50 per handset sold. In short, this could be why Samsung sticks to plastic: if it works, and profit margins are great, then why use more expensive materials?
Now on to build quality. That’s one of the first things we look at as reviewers, mainly because if a phone feels terribly cheap or falls apart it’s just too hard to recommend. One cheap phone can help ruin a brand’s name, too, since it sticks with consumers forever. One buyer might have a bad experience with Brand X for example, and choose to never buy Brand X again.
HTC is trying the high-end build quality with the One, and so far it’s working. Consumers in developed markets are flocking to the phone and praising it as one of the best built Android devices ever. That’s good news for HTC. Apple has seen success in this arena, too. It’s not often you hear people complain about the build of an iPhone, and that’s because they are some of the most well-built good looking phones around. Drop one? Well, that’s a different story, but also the dangers of buying a device made of premium materials.
And finally, ease of use. I’ve seen some pretty crazy smartphone designs. Weird flip mechanisms, terrible displays and odd button layouts, to name a few. If a user can’t actually use your phone, then you’re in trouble. It always baffles me when I see major smartphone brands release ridiculous handsets that can’t be controlled, and we’re seeing some of these problems in massive phablets, which are often hard to use without deliberately standing still and holding it with two hands. Apple’s one-handed approach is applauded for a reason, though we do think larger screened phones offer a more compelling experience for media consumption.
It might seem that marketing should naturally be a starting focus point for any OEM looking for a successful handset, though we’re often befuddled when it doesn’t happen. In a sour economy, marketing is one of the first things to go – it’s expensive and can often be a gamble. However, we know that HTC this year needed to refocus its marketing efforts. Why? Because it has continually made amazing handsets that nobody was buying simply because they didn’t know about them.
Samsung has seen incredible success with its marketing. The Galaxy series is often the first word out of someone’s mouth who is looking for an upgrade. We need not wonder why: look at subway stations, bus stops, heck, even the sides of busses. They’re all plastered with “The Next Big Thing” and Samsung advertisements.
The company also teamed up with Jay-Z for his upcoming album release. If you’re an owner of its Galaxy S4, Galaxy S III or Galaxy Note II devices, you have a stab at being one of the first million people to own his new album for free. No, it’s not a reason for you to buy the phone, but having one of the world’s most famous musicians on your brand’s side certainly won’t hurt.
We also need to remember the benefit of physical stores. Apple has seen a lot of success with it, so much that it caught Samsung’s attention. The South Korea tech giant is now working with Best Buy and other retail outlets to offer its own in-store experience. These retail locations are great not only for marketing, but also for support. If a customer knows he or she can drive ten minutes down the road and get a replacement phone or a repair, then he or she will likely adopt your brand over another.
Marketing is important if only for two things: letting the world know that your phone exists and what it can do.
It might sound silly, but staff is key for the success of the software, hardware, deployment, marketing and support of any smartphone. We saw Scott Forstall lose his job after butchering Apple Maps. Andy Rubin was the brains behind Android at Google until this year. Steve Jobs is largely attributed to the success of the iPhone. These are a few examples, but you can see what happens when a bad employee is in charge and when a great one is. Leo Apotheker and HP’s team essentially killed webOS, but former Palm CEO Jon Rubinstein was a visionary in his own right who not only helped build Palm but once worked as the head of the iPod team at Apple. Clearly HP did something wrong when it brought Palm and its staff on board.
These days the success of a smartphone might come down to the CEO, who needs to make sure that supply can meet demand. HTC struggled at the launch of the HTC One and had to delay it slightly, mainly because it was waiting on parts from suppliers. This happens all the time, and is often one reason why a smartphone might seem excessively expensive at launch – if a company can control demand than it can also meet carrier expectations and ship on time. If it can secure enough supply, then it has the foundation for a successful smartphone launch. Who’s in charge of this? None other than the company’s chief operations officer, in most cases.
Lesson learned: everyone from the bottom to the top should be held responsible in the making of a great smartphone, or the failures of a bad one.
This isn’t always in the hands of the OEM, but sometimes it is, and it goes hand-in-hand with software. If a user can’t do anything with your smartphone, then often he or she will go elsewhere. Right now we’re seeing a perfect example with this as BlackBerry 10 and Windows Phone 8 try to compete with Android and iOS. Both platforms are respectful, for sure, but you can do more on Android and iOS because there are hundreds of thousands of other applications.
Windows Phone 8 has a few, but Instagram and Vine are instead replaced by wannabe apps. Same goes for BlackBerry 10, though you can also hack a few Android apps onto those devices if you so choose.
Unfortunately, most consumers don’t want to deal with that hassle. They want to play the same games, surf on the same social networks and use the same apps that other friends and family are using. Right now, that means that BlackBerry 10 and Windows Phone 8 need to offer the same apps as Android and iOS in order to attract those consumers. Unfortunately, we’re not seeing that happen, at least not fast enough.
Thankfully, both have other redeeming qualities that make them compelling platforms for some users. Not all users, however, which is no doubt a major reason why both platforms are having a hard time picking up steam.
Quick Time to Market
HP learned the dangers of delaying a smartphone too long shortly after buying Palm. The company’s former CEO Leo Apotheker even said that the company realized a quick turnaround from announcement to launch was needed in the future.
Though, shortly after announcing the HP Pre 3 and several other devices, it became clear that HP had lost all focus on actually getting the device to the market. In fact, the phone was announced in February but didn’t land in the U until six months later, in August. It was officially cancelled in all other markets shortly thereafter, which ultimately led to the demise of the Pre brand and webOS.
The problem with those delays is that you build excitement around a device and then, ultimately, consumers get tired of it. Technology moves too fast for us to be sitting around for six months for a product launch, and competitors are working around the clock to make sure that your device looks as stale as possible. Announce a device, get it to market, keep consumers excited. Rinse and repeat.
Good Carrier Relations
This is particularly important in the United States. Samsung can sell millions of smartphones in a few months because consumers that are tied to a carrier for one reason or another still have access to its flagship Galaxy S4 devices. Apple is able to do the same. Nokia, however, has a single device on various carriers with different model names – names that aren’t as memorable as the Galaxy S4 is – which ultimately confuses the consumer and leaves OEMs with a smaller customer base to sell devices to.
I think, now, OEMs need to do as much as they can to get their phones on as many carriers as possible. If Consumer A on Carrier A sees Consumer B on Carrier B with a hot new flagship device, for example, and Consumer A can’t get that device from Carrier A, it’s more likely that he or she will pick another device instead of swapping carriers.
With family plans, signal strength varying on location and more, it’s probably a lot more likely that a consumer will choose a different phone than migrate carrier to carrier to follow the migration of new flagship smartphones.
Ultimately, I think these are some of the major points OEMs have to consider when building and deploying a new smartphone, whether it’s a flagship device or one destined to emerging markets. Hopefully, as readers, you’ve learned a bit about what kind of thought goes into the process and why a smartphone maker might not always be able to get devices across multiple carriers, or why your favorite smartphone maker sticks to plastic build materials.