In my last article, I talked about the list of fundamental features that are required to make a smartphone competitive. None of the features I listed in that article are in any way ground-breaking. Nevertheless, they are critical for a vendor to compete in the fight for top dog smartphone honors.
 
What then are features that would separate a smartphone from the pack and catapult it into leadership? The best way to build a strategy is to start at the top – the top dog smartphone that is. So let’s rephrase the question to ask, “What does a smartphone have to encompass to complete most effectively with Apple’s iPhone?”
 
Let’s face it, the iPhone is top dog –Apple’s recent 3Q09 financial performance report makes it clear that the iPhone takes the cake when it comes to smartphones – 7.4 million iPhones were sold in Q3, a 7 percent increase from a year ago.
 
Apple is still on track with what seems to be an impossible growth trajectory, especially in a down economy. It’s not magic; in fact it’s simple. Apple is giving customers what they desire - high value, high margin products that have superior service, support and a well-managed smart ecosystem. Case in point: While all of the competitors have been slugging it out in the low margin, highly completive, dog-eat-dog netbook battle, Apple is staying above the fray for the time being. Lower price and feature parity will not sustain profits in today’s market. 

Let’s take a look at what Apple’s competition is doing/did to better understand this point.
 
Dell just recently announced that its Android-based smartphone will be launched on AT&T’s (News - Alert) network. No specs have been published yet on the Dell device for the United States, but if it looks anything like what the Mini 3i that they designed for the China smartphone market then it lacks any real differentiators. Probably the biggest difference (and this is my guess) is going to be 3G instead of 2G, plus the WiFi (News - Alert) support that is lacking on the Mini 3i. From a look and feel perspective, the Mini 3i looks a lot like a cloned iPhone (see picture at right). 
 
Give Dell (News - Alert) the benefit of the doubt and say that their soon to be released smartphone for the U.S. market is going to be perfect – that it performs to spec, has no bugs and no obvious flaws. That’s still not enough to compete effectively, much less win. Not only is it too late for a me-too device to create excitement, there are simply no differentiators that will give Apple a run for its money. Even if the Dell phone comes at a lower price point, that’s still not good enough – how low can you go? Its not just about a proper working device, with the expected hardware and software features, or price points – what it comes down to is whether or not the device encourages its users to come back for more.

 

Let me explain…
 
Prior to the iPhone, in the wireless device world customers had once option – you buy and get what you see – and that’s it. No expanding universe of innovative applications to turn the device into your own personal creation. Apple has forever changed the concept of “what you see is what you get” to a promise that smartphone customers can “get whatever you feel like, when you feel like it”! Android (News - Alert) promises to do this as well – Dell is banking on it – however there’s a flaw. Where’s the support (for the holistic device SW and HW perspective)? Where’s the ecosystem of easy to download music and movies? And ultimately where are the Applications? Not only did Apple exceed sales expectation of iPhones in Q3, it also reported (in September) record volume of App Store activity– more than 2 billion downloads. 
 
The point here is that a new smartphone is only as smart as it ecosystem. If it lacks an ecosystem then it’s not really all that smart. Image for minute that the iPhone was just a device without the ecosystem of an 85,000+ application App Store, and iTunes; –it looks just like any other smart phone right? Kind of like the Palm Pre. So far, I have seen exactly one person who has a Pre. The Palm Pre definitely is not a success story – and it’s not a bad phone, it just lacks ecosystem.
 
So, Dell, what every smartphone vendor needs to do is build a proper ecosystem. Do what it takes – partner, collaborate, invest, whatever—to launch your U.S. device with a channel to:

 

 

Take this advice, Dell, and you will produce a real contender in the smartphone wars.