What makes a smartphone successful?

It’s been more than a month since I last blogged here. I took some well-deserved time off during December. Since last time, I’ve bought an Apple iPhone (more hipster stuff) and Google launched its Nexus One phone. Coincidentally, both happened on the same day but there was no intentional relationship between these events (unless Google planned it on their side). The iPhone purchase had been a long time coming; my desire to get one was directly proportional to my increasing disillusionment with the BlackBerry platform (which I had been loyal to for more than 7 years prior to my recent Apple-ification). The fact that things came to a head on January 6 was entirely unplanned.

My delight at how downright enchanting Apple’s products are is still covering everything in a honeymoon sheen, so I question my critical faculties a little, but – to be honest – the ease with which I’ve been able to adopt each of these products (a MacBook Pro, an iPod Classic and now the iPhone) and seamlessly integrate them into my digital life has been nothing short of remarkable.

I thought I’d take a few moments and reflect on what constitutes a successful smartphone. I’ve tried 3 of the 6 major flavours myself, and I think I garnered some useful insights along the way. I’m equally sure that there are product planners at Apple, RIM, Nokia, Microsoft and elsewhere whose understanding of these matters is far deeper than mine. I just don’t think they’re blogging about it.

Currently, the 6 main flavours of smartphone on the market are the Apple iPhone, the various Google Android devices (including Google’s own Nexus One), the Palm Pre, RIM’s BlackBerry line, the Microsoft Windows Mobile devices and whatever Nokia fields in this space (I’ve seen them, but mostly from a distance; notice how difficult it is on their website to determine what, exactly, they’re offering in this category). I’m personally familiar with any number of recent (and older) BlackBerries, the iPhone and the Windows Mobile platform (I’ve owned a Samsung BlackJack and regularly examine my colleagues’ WinMo phones at the office just to make sure I haven’t missed anything; I never do).

Of these 6 flavours, only two are genuinely successful ventures: the iPhone is successful in every way; the BlackBerry is successful in most ways. And while there is a lot of buzz in the blogosphere about the Android platform and the Nexus One, limited market penetration and lack of consumer interest (at least to date) make it hard to judge. Most reviews, though – if you look beyond the developer fanboys dazzled by the promise of open source hacking their phones – are basically “meh.” It’s good, they say, solid even, an interesting contender, works well, pretty screen, good software, great Gmail integration, etc. Even though I’ve not had the opportunity to closely examine an Android phone myself, one thing stands out for me in everything that I’ve read: nobody says it is the Second Coming. And everybody said that about the iPhone.

I think the first and most important thing that makes a smartphone successful is that the hardware and software be made by the same company. In a post-Microsoft, post-Linux world, that seems like a terribly old-fashioned thing to say but it’s true: Apple and RIM have been able to release high quality products consistently for a number of years now. Even though Apple’s still a relatively new entrant into the smartphone market, its 8 or so models so far have all adequately conveyed a  focused vision of an easy-to-use, comprehensive, simple, flexible and beautiful device. The meteoric rise in sales figures confirms what you already know: the iPhone is now the de facto standard, the one to beat. The high degree of integration between the hardware and the operating system ensures that users don’t have frustrating or confusing experiences (or at least it minimizes them). Put simply – and we’ve known this since the early mobile phone days of Ericsson and Nokia – making your own hardware and software, in-house, is good business.

It’s easy to understand how the market deviated from this model. Microsoft was the driving force here: what worked for them in desktop operating systems, they thought, would also work in the mobile phone market. Never a particularly successful mobile player regardless of the number of versions of WinMo it released, it nonetheless established another mode of doing business: that of a platform maker licensing its software to a number of different OEMs. And so market capacity was created: HTC, Samsung, HP, Dell, LG and Acer didn’t previously have smartphone capabilities, and Windows Mobile enabled them to launch and sell these relatively sophisticated devices. The nature of the OS manufacturer/OEM relationship was never comfortable: OEMs found it difficult to adapt features to their specific needs because their own software capabilities remained limited (this is not a simple investment to make). In the end, the main problem of the Windows Mobile market is competitive differentiation – or lack thereof. In essence, all Windows Mobile devices are the same. I know that HTC and some other OEMs have recently begun to customize the OS to a greater extent, but that seems to be more about circumnavigating Microsoft’s unbelievably long development cycle for Windows Mobile 7 rather than competitive differentiation. If you’re a consumer, it’s hard to figure out which WinMo phone you should buy, or why. So most consumers just buy a BlackBerry or iPhone.

And Google essentially follows the same 3-party model – at least until now. Even though the Nexus One is basically an HTC Android phone, Google’s recent launch strongly signals that it’s beginning to understand what’s made BlackBerry and Apple successful in this market, and why Android has been a hobbyist platform to date. Reducing the number of parties from 3 (OS manufacturer, handset manufacturer, consumer) to 2 (phone manufacturer, consumer) dramatically increases your smartphone success, so Google will presumably increasingly go down this path. It does require a great deal of experience with creating desirable consumer products (which Google doesn’t have), but it’s possible that it might learn how to do that. (I’m still not entirely sure I understand why Google feels it needs to control the access device platform – smartphones, netbooks – given that Apple, for one, happily includes Google services in its devices…) What’s most interesting to me in all of this “Google becomes a hardware manufacturer” discussion is that it all smacks more than a bit of Microsoft. Microsoft, it is said, can do anything with its vast cash reserves. Give it time, they say. Microsoft never innovates but is always second or third to market, then bulldozes over the incumbents by offering tried-and-true things, repackaged and commoditized.

The fundamentally unpredictable nature of the post web 2.0 economy, though, has shown that this business model no longer really works; neither for Microsoft nor anybody else. I think Google is facing an uphill battle. It probably won’t be a blood bath like Microsoft’s Zune, but that’s the analogy: an OS manufacturer who changes business model and decides to make its own device has never actually been successful. Hardly surprising.

The next most important thing is that modern smartphones need apps and secure app distribution channels. While the idea of loading any old software (open or closed source) onto your smartphone may seem desirable, trust me, it’s not what consumers want to be doing. Apple’s egalitarian grab bag of maturity tests, nudie pic shufflers and sketchy games is, ironically, exactly what you want. The market, like the marketplace, will mature. The useful apps will prevail and the shady manufacturers of the 100,000 crappy 99c applications will disappear. But the fact that everyone and their uncle is writing iPhone apps is mostly important because it demonstrates that Apple has created an unstoppably desirable device: everybody wants an iPhone because everybody wants the apps. And everybody wants to write apps because everybody wants an iPhone. The iPhone created its own economy entirely. Apps are key; but an app platform will only take off because the platform they’re for is the single most desirable platform. And so far, nobody else has caught up with Apple’s early-mover advantage.

On a final note, BlackBerry dealt itself a fabulous hand approximately 10 years ago when it invented the smartphone market with hardworking, dedicated devices which, like miniature angry German kitchen appliances, weren’t exactly pretty but did a few things very, very well. There were a few mishaps along the way (a proprietary network in the early days, clunky hardware), but those were teething problems. Three years ago, the BlackBerry was an excellent device, and it was also the only phone that connected properly to Microsoft Exchange Server mailboxes through RIM’s proprietary BlackBerry Enterprise Server (BES), an expensive server application enterprises had to buy in order to get ‘push’ email to their devices. For many, it was worth it, and there is a deep installed based of BES customers all over North America today.

But with the advent of new email push capabilities built directly into Microsoft Exchange Server 2007, the market has changed. Today, you can’t buy a BlackBerry and actually meaningfully connect it to your Exchange account without a BES. RIM has deliberately crippled the functionality of its devices in order to protect its BES software business. They offer a cloud ‘service’ (BIS – ‘BlackBerry Internet Services’) that retrieves email from POP or IMAP mail servers and pushes it to BlackBerries. BIS can even do this for Exchange Servers, but it does it poorly and unreliably (there have been a number of crippling BIS service outages just in the last few months), and users cannot sync their calendars or contacts this way.

RIM, it seems, bet on “the cloud” before the cloud ever existed; it built its own private cloud of proprietary services, to go with its proprietary hardware and operating system. That might have been a good strategy 10 or even 5 years ago, but today, it just doesn’t work anymore. Nobody wants RIM to retrieve their email and forward it to them; that’s why we have internet connections and carriers. Users want to choose how to connect their phones to services and don’t want to be restricted by weird, old school protectionist business practices. I sense that RIM either needs to change a number of its product design strategies radically and quickly, or it’ll be game over for the Waterloo, ON, company. Competing against Apple and Google will simply exhaust its bank accounts or sideline it entirely into a position similar to Microsoft’s.

So, to be successful in the smartphone market:

• Make your own phone; control both hardware and operating system – create a delightful gadget that is differentiated from its competitors in obvious ways consumers can understand
• Focus on the important stuff: bright screens, good battery life, good sound, excellent reliable phone features…
• Enable as much cross-platform software on your device as possible (let me use my Google cloud apps on my iPhone, or my Microsoft Exchange Server account on my BlackBerry…)
• Create a platform developers will want to write apps for, and a marketplace to help them distribute those apps

And all the other stuff, like open source hackability goodness, developer fanboy cred, whether it has a removable battery, availability of accessories, etc….? All that stuff is really secondary.

Michael Pollan said in the New York Times that it’s really easy to answer the question about what and how humans should eat to be optimally healthy: “Eat food, not too much, mostly plants.” Let’s see if there’s a similar answer for making smartphones: “Make your own hardware and software. Make it great and differentiate it from the others. Allow consumers to connect it to all their services. Encourage developers in creating apps but exert control to ensure security and stability.” That’s it, really :)