Last year, Apple acquired streaming music service Lala.com. Lala was unique in that members could listen to new tracks in their entirety (iTunes only allows you to listen to a clip) and then purchase the rights to stream the song for pennies. Timing of the deal was suspicious as Apple swooped in just as Lala announced the pending approval of their iPhone app, which would allow members to access their music catalog via an iTouch or iPhone. While some question Apple’s motive to make the deal (because as a standalone service Lala would pose a competitive threat to iTunes), most expected to Apple bring Lala into the iTunes Store “fold” and give members a choice to either purchase music download or streaming rights.
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I’m a big fan of TV comedies. One of my favorite new shows is Modern Family on ABC. The show focuses on the lives of three families; each episode typically has 3 story lines that are woven together. On last night’s episode (called Game Changer), one of the three story lines focused on the iPad. One of the main characters on the show, Phil, was planning to stand in line this Saturday to buy an iPad, the latest gadget from Apple. Since it was Phil’s birthday, his wife offered to stand in line for him but she fell back asleep, thus not making it to the Apple store in time. Eventually, the family figures out how to get Phil the iPad so all ends well. But during the closing scene, Phil proclaims his love for the iPad as his wife walks behind him, which she mistakenly takes as a complement for her. 
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Apple has done it yet again. According to the Q1 2010 results (source), consumers snapped up 8.7 Million iPhone devices this past quarter. While a few mobile market analysts feel that Apple missed their sales target (BTW, some expected sales to reach the 9 Million to 11 Million units mark), the growth of the iPhone still represents a healthy 100% increase in sales in comparison to the same quarter last year.
In my discussions with Marketers, I’m regularly asked whether iPhone app development or iPhone mobile campaigns make sense considering the dominance of rival smartphone devices such as RIM’s BlackBerry. There’s valid concern if you consider only the number of mobile devices but that number isn’t as important when you consider usage. While RIM currently outsells Apple in smartphone devices (RIM sold 10.1 million devices in the quarter ending November 28, 2009 whereas Apple sold 7.4 million iPhones in about the same period), the iPhone accounted for 60% of page views AND 75% of mobile revenue at the top online retailers this past holiday season according to Omniture (source). So while BlackBerry devices are more prevalent, users avoid using this device to browse the web. This decision is likely based on the poor web browsing experience. And Marketers that are considering the accessibility of their website should optimize it for the iPhone.
So Marketers that want to interact with the largest group of mobile users should first focus on the iPhone platform — nothing else compares. But besides usage, Apple provides plenty of additional reasons for why the iPhone platform will also win in the long run:
- The current quarter’s iPhone unit sales numbers exclude the 55% year-over-year growth in sales of the iPod Touch. The iPod Touch is a Wifi-enabled mobile device that supports many of the iPhone applications. The iPod Touch user segment represent a group that is not bound by telephony service but are still connected (likely to be a younger demographic).
- Sales growth was driven by strong global demand. This implies that marketers can now expose their application/campaign or brand to an international audience (while facing the challenges that come with such a relationship).
- With the introduction of the iPhone 3GS, demand for the iPhone has spilled from the consumer market over to the enterprise market. Apple reported that 70% of the Fortune 200 are either deploying or piloting the iPhone. While marketers may have previously focused on the business to consumer or B-to-C market segment, they now have an opportunity to create applications that address the needs of the business to business or B-to-B market.
- Apple continues to invest heavily in customer service, whether it is through training of mobile carriers on device or one-on-one coaching of new customers at their 283 stores (currently present in 10 countries). This is a critical tactic for Apple to attract and service an older demographic of users that may not be as comfortable with touch-based technologies.
- The numbers did not account for the upcoming product introduction of a tablet-like device. This highly anticipated announcement is expected tomorrow but the value of this news is that Apple will give marketers yet another device that will support mobile applications. The segment of the users that select and use this device is still unknown but it is potentially a new group of untapped users.
- Lastly, Apple has completed two recent acquisitions: music streaming service Lala and mobile advertising platform Quattro. Both represent the company’s continued future-looking view on revenue generation and demands.
Apple seems to be benefiting from a positive feedback loop. While the iPhone does have its flaws (it is not a perfect mobile device!), Apple has built an elegant smartphone unit that is extremely user-friendly. Additionally, iPhone users regularly promote their smartphone to other non-users in their social circles so the masses are choosing iPhone when deciding to go mobile (source). For brands that are still on the sidelines or ones that are only focused on the alternatives (which is a mistake; source), there’s no better time than now to jump on the iPhone platform bandwagon.
