• Brand loyalty. Some people are admittedly Apple fanboys — they own everything Apple and they refuse to look at anything else because it is crap. They certainly won’t dare think about an iPhone (even for a second)!
• Lack of awareness. Most consumers do not know that Android and iPhone devices are on par both from a hardware and software perspective. In fact, certain Android devices sport better hardware (processor, expandable storage, thinner form factor) than the iPhone 4S.
• Fear of change. We’re human and so we generally resist change. In fact, we are only agreeable to change once we can ensure that change doesn’t upset the status quo. All of this requires a time investment and so it is easier to just stay the course.
• Popularity. iPhone’s popularity is greater among affluent households. By possessing an iPhone, we make a statement that we’re not commoners — it is the epitome of conspicuous consumption.

• Use third party development platforms, such as MonoTouch and Appcelerator, to create iPhone applications. In a blog post on the decision, Jeff Haynie signaled that Appcelerator was in the clear and thanked developers for their continued support.
• Use mobile advertising platforms other than iAds/Quattro. Google was also gushing about the new terms of service and how the mobile community will benefit by having multiple platforms in the mix.
• Use third party mobile analytics platforms, such as flurry, motally (now owned by Nokia) and Distimo.

On the third point however, the new terms reinforced the need for developers to respect user privacy.

The news terms specify that mobile applications must ask users for permission before collecting personal and device data. However, device data cannot be sent to third party providers. In essence, Apple is trying to prevent these mobile analytics software providers from leaking news of a upcoming device like they did in the past (see Flurry and the iPad).

Why the sudden change of heart?

Clearly, Apple needed to change things up. While some speculated that the projected growth of Google’s Android mobile platform forced Apple’s hand, this idea goes against the view of Steve Jobs who has always favored catering to a small, loyal crowd vs. worrying about the masses (see Doc Searls on Steve Jobs). While Apple could have forced Developers to jump through hoops to use third party solutions vs. Xcode, Apple did not want to entertain another cat and mouse game as they have with the developers that are constantly jail-breaking their iPhones. Instead, Apple shifted the focus back to the art of usability, content and design that the third party development platforms have to support. In fact, Apple provided a set of high-level guidelines that specified:

• “We have over 250,000 apps in the App Store. We don’t need any more Fart apps. If your app doesn’t do something useful or provide some form of lasting entertainment, it may not be accepted.”
• “If your app looks like it was cobbled together in a few days, or you’re trying to get your first practice App into the store to impress your friends, please brace yourself for rejection. We have lots of serious developers who don’t want their quality Apps to be surrounded by amateur hour.”

This may be a solid strategy to encourage developers to port quality apps from Android to the iPhone platform but it will work only if these development environments don’t impose additional limitations on the developer.

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.

• This was a financially motivated decision. Microsoft was offering Apple a bigger revenue slice of the advertising pie for incorporate Bing than Google.
• This was an effort to thwart Google’s recent jump into mobile. It seemed that Google was moving in on Apple’s territory with their introduction of the Nexus One device.

While some may buy into this rumor, there’s very little reason to believe it. Here’s why:

Apple is in the business of designing beautiful devices with exceptional user-experience for the consumer market. Google has dominant position in the web search market. Google reached this point by creating a simple, user-friendly search engine so having Google Search on the iPhone makes for a perfect match. While Google may not want to share more of their search revenue, they’ve bowed to the pressure of News Corp owner Rupert Murdoch when he proclaimed in November 2009 that Google was stealing his paid content (source) and that he would switch to Bing if he had no other option.

Regarding the competitive threat, there are two reasons that Apple may not be worried. First, John Paczkowski of AllThingsDigital wrote about a rumor that Microsoft is planning to release a Zune Phone in the next couple of months (source). In case you’re wondering, this rumor originally surfaced back in late 2008 (source) but this is the FIRST time that there’s thought that the phone will be pink. Currently, there’s no proof that Microsoft or any other phone/mobile OS marker is going to magically recapture Apple’s market share with their mobile offering. This rings true considering that Nexus One sales estimates reached a paltry 20,000 in the first week of offering according to mobile analytics service Flurry (source). If the Zune rumor is taken as fact, then Microsoft is a rival to Apple as much as is Google so there’s no real rush/need to switch.

In my opinion, it feels more like Apple is playing a good game of chicken with Google and Microsoft is just caught in between.

Mobile search is experiencing a quarter-over-quarter growth rate of 30% in Q3 2009. The current momentum in mobile adoption is resulting in a simple pile-on effect. Demand for mobile is surging on the data side: according to a recent report by CTIA (source), wireless data service revenue is up nearly 40% in the past 6 months of 2009 (ending in September). Consumers adoption of smart phones is finally expanding; they are seeing how these devices simplify their life and enable them to be more productivity while away from the internet connected laptop or desktop. With these devices, they can easily communicate with their friends via text and research locations and/or products while in transit.

Mobile advertising offers Marketers a novel touchpoint to engage consumers. While Google executives admit that search volume is still light in comparison to other mediums, marketers are extending their campaigns to these devices because they can expose the consumer to one additional message. This is important because today’s advertisers need to smack consumers with multiple touchpoints to effectively wrangle a behavior out of them, like a purchase. Since advertising is still fairly new on these devices, Google executives claim that mobile advertisements are more effective at driving clicks. While it is understandable that consumers may find these ads more engaging, I’m hoping to find data on the effectiveness of the ad beyond the click. [NOTE: If you have some, please share!].

Marketers need to match the message to the mode when they interact with a consumer on a mobile device. A few big brands are toying with mobile commerce. For example, Starbucks recently released a mobile application that allows consumers to buy a coffee via an iPhone. While Starbucks seems to have found a gem of an idea, Google executives confirm that there are currently a limited number of applications that can engage a consumer on a mobile device.  This is partly attributed to the consumer being in a different mindset or mode when they are on their smart phone. They are basically “snacking” on information. Additionally, Marketers need to recognize that their mobile message needs to be different than their email message because of the wide range of technology support on these devices.

Mobile is not going away. The final point that Google made is that they’re going to continue their investment in their mobile platform Android. Google has plenty of cash on hand so Marketers that are thinking that mobile marketing has no future should reconsider. While mobile advertising is still in its infancy state, it seems to be maturing at a rapid clip so marketers should not ignore the power of mobile.