Tomorrow is supposed to be the big announcement from T-Mobile about the launch of their first Android powered phone. Already, the major comparisons are to Apple’s venerable iPhone. Of course, in understanding the impact of the offering, the conversation really should go beyond Apple’s singular offering and consider the larger impact it could have on other rival operating systems as well, considering it is poised to be featured across a number of manufacturers. It can lengthen the reach of the OS and broader consumer adoption. However, it still has to pass the first challenge, overcoming the hype of it’s initial challenge to iPhone.
Initial speculation of distribution numbers are pretty lofty and making those numbers will require a well orchestrated launch. The question is, are the pieces in place to effectively compare it to the AT&T-Apple venture. When broken down into simple terms, probably not – at least not in the near term for any of the players involved.
AT&T versus T-Mobile
AT&T has a greater penetration in company owned retail than T-Mobile. Leveraging AT&T’s powerful distribution channel allowed them, along with Apple, to effectively control the experience, focus the hype and move units. Despite the frustrations of long lines and early in-store unavailability, the pre-launch setup was focused on a very formulated distribution experience by sales reps and in-store merchandising. T-Mobile, however, relies on a large number of re-sellers and the presentation by these resellers is not as controllable, nor is the merchandising. Non-exclusive resellers especially can be swayed in what they offer a customer based on other carriers and manufacturer’s demands. This can detract from focus.
Despite Apple’s inability to get the iPhone to work properly on AT&T’s 3G network, AT&T’s network performance on the whole is considerably better that T-Mobiles and AT&T’s customer satisfaction in regards to network performance is also better. The range of the network is also better as AT&T has greater coverage on Edge and much greater coverage on 3G than T-mobile, as well as greater worldwide penetration (over 200 countries for AT&T as compared to just about 180 for T-Mobile). Those factors can play into how potential buyers react.
AT&T is the largest carrier in the US with a significantly larger base of customers to work with. The advantage to AT&T there lied in upgradability in the base. Factor in that AT&T’s base is largely post-paid and the stability post-paid contracts provides them makes the base easier to leverage than a lower credit driven post-paid and large pre-paid set. Post-paid are also more apt to purchase more expensive handsets as well as use smartphones as compared to the pre-paid market.
T-Mobile is a cost leader and aggressively positions themselves on the pricing of their plans. This could be an advantage to T-Mobile depending on how they position the data usage for the device. The AT&T data pan is considered on the expensive side, in part due to revenue sharing with Apple, and although it has not necessarily dissuaded significant sales, it is a point of note when looking at other data pricing on comparable smartphones.
Advertising leveraging would normally be a wash as all the carriers try to mirror one another’s share of voice. However, because AT&T also brand’s themselves across several communications verticals it allows them to effectively provide a greater brand experience and garner a different kind of consumer reaction to product launches. This was leveraged fairly effectively for the launch of devices like the Samsung Blackjack, which did not enjoy the product placement hype of T-Mobile’s popular Sidekick. It was also how AT&T helped RIM move from the perception of the BlackBerry as a business device to launch the Curve. T-Mobile does not have the experience launching these kinds of products.
HTC versus Apple
Apple is an icon. Pure and simple and the iPhone was built on the perceptions of the Mac and iPod before it. This created a nice vaulting point for iPhone in the market due to consumer perceptions about the product. Apple controlled the handset completely, integrating the design experiences and leveraging its die-hard user-base. The end result was a complete different take on design and one that worked with within the expectation of the brand.
Until recently, HTC primarily built carrier-branded phones before deciding to self-brand and very few of those handsets were runaway successes. Many of their bulky designs featured knock-off ideas from other brands designed to be cheap carrier-branded alternatives to names like Nokia, Moto, Samsung, RIM & Palm. HTC’s brand identity is nothing compared to just those five and light-years behind Apple in consumer perception.
Beyond those elements, the relative difference between how HTC and Apple approach their marketing plays a huge role. Apple as the device manufacturer pumped a huge budget into the device from set up through delivery and continued the push through the entire lifecycle. Steve Jobs used his superstar status to help position the phone beyond the advertising and took the share of voice for the launch through the stratosphere, unlike any other product launch in recent memory. By contrast, there has been little made of HTC’s Dream. One would be hard pressed to find a commercial or find an advertisement for the launch, due in about a month. That’s a significant difference in consumer familiarity to overcome in comparing the two.
Apple also owns its own retail outlets to supplement that of the AT&T COR distribution. Unlike Nokia which has a small number of retailers of its own or SonyEriksson that uses Sony COR to provide additional support for their product launches, HTC does not even have that. It is not just the ability to have more doors for customers, it also meant that Apple provided a very controlled distribution of the product and played an active role in the launch, something HTC will not be doing.
Apple versus Google
Two monolithic giants in the technology world but with two very different backgrounds and skill sets and this is where the real conversation begins.
Apple has a couple of distinct advantages here. The first of which deals directly with building operating systems, something the company has led trends in since the 1980s and holds a plethora of user insights from which to derive from. Related to this fact, Apple also is a program developer and designs programs very specifically to compliment their operating system. Google on the other hand only recently began a foray into programming, mimicking existing program bundles and launching them in the cloud, hoping to de-tether computing from the operating system. These products were met with mixed results and provide a limited set of consumer understandings despite Google’s overwhelming knowledge of particular consumer patterns, such as that in search and advertising.
Secondly, Apple’s core constituency is used to paying for the product and paying a premium at that. Google’s consumer offerings are mostly free, subsidized by advertising or used to gain consumer understanding to help refine their search and advertising offerings. Due to this, consumers view the two companies in vastly different ways, as Apple connects with customers while Google connects with users. Subtle as it may seem, this is a significant difference and although it is masked by the device element held by HTC and the connection element held by T-Mobile, all of a sudden consumers are paying for a product from Google.
To this point however, Android is really a joint-venture, so although the overwhelming focus is on Google, Android itself is not completely a Google offering and they are trying to distance themselves from the fact that users are ultimately paying for a Google offering by trying to remind the public it is open-source and not an Google ecosystem despite leveraging Google’s assets heavily. This might be a tough sell in the first incarnation however, as rumors are abound the browser carries a distinct familiarity to that of the recently launched Chrome, it comes preloaded with Google Maps and gmail and other Google products, like YouTube. To overcome the Google tie-in they will need to ensure the open-source is fully utilized and the second generation of apps available compliment the experience while moving the focus away from Google.
This could work to Google’s favor as the app process is less restrictive than the ecosystem built by Apple. Then again, consumers seem to like the idea of one-stop consumption, they embraced it with Microsoft’s products before (Windows-Office-IE) and continue to show that pattern with Apple’s now (OSX-iTunes-Opera) and if you doubt the trend, look outside of this kind of technology for examples of brand extension loyalties and consumer adoption patterns.
Android versus the world
There’s more to this argument than just these elements, as the launch has to compete with several other similar products already on the market. The distribution of systems across devices and the way those ecosystems are developed was part of the reason Google spearheaded Android.
The market itself is still developing for smartphones. Growth in the market means getting share, however, unlike in established markets where it is primarily about stealing share from competitors, there is still room in the highly unstable mobile OS landscape to carve out a niche.
The difficulty will be positing against not necessarily just Apple, the most talked about competitor, but also the rest of the systems out there. Android needs to get deeper adoption than one handset by a second tier manufacturer to really leave it’s mark. RIM is a venerable force with its system, owning the lion’s share of enterprise and making strong inroads into the general consumer’s mind. RIM, like Apple however are ecosystems all their own… Microsoft’s Windows Mobile and Symbian are really the competition for Android as they are the OS of use across a broad number of manufacturers and devises which is the goal of Android in the first place. Symbian is the defacto because of nokia. WinMob has fairly strong penetration and includes some well received handsets across the market and WinMob continues to address both enterprise and consumer multimedia development, despite the clunky nature it takes on. Despite Palm’s continued faltering in developing their system they recently relinquished even some of their handsets to WinMob, and Palm still carries the mantle of being the original touch screeners.
Of course, consumers really see the devices from the device point of view more than the OS at present and comparisons to LG’s deep dive into the touch screen and smartphone world, Samsung’s broad offering, SonyEriksson’s multimedia and Nokia’s overall marketshare across a number of different platforms will only further confuse the argument as to is it the phone itself or the underlying OS that define the technology. Just ask Motorola, who have yet to score a hit in the smartphone world after rocking the talk world on the RAZR or consider how the Sidekick never developed beyond it’s text heavy capability, yet those phones still carry influence.
Can Android pull it off? Absolutely. As an ecosystem supported by Google other handset manufacturers are sure to join HTC and build more exciting and powerful phones which will create intra-Android competition that will spur on greater carrier adoption. While Verizon waits for a CDMA compatable iPhone probably still years away due to exclusivity contracts and technology reasons there’s the chance they become the ultimate champion for Android as a foil to Apple’s stronghold. As long as Palm and RIM hold their wares so close and WinMob continues to struggle with UX there’s a huge opportunity for Android.
In the End
The first incarnation of T-Mobile-HTC-Android just needs to not completely tank in order to be able to spin success and create a bridge toward future releases. Short of the OS completely crashing, the devise having no glamor and the network being unable to cope with the user needs, it won’t take much to breath life into Android. Or, at least that will keep the press off it long enough to get past the ultimate Apple iPhone comparison and find it’s own fans. That is to say, by the time the launch happens the economy isn’t in such disarray that it dissuades people from even investing in a multi-hundred dollar phone and a hundred dollar a month package of services to begin with. Then again, that might make a good excuse for low initial adoption too.