A decade ago, the smartphone market looked nothing like it does today. Nothing at all. Major players included Nokia, BlackBerry and Palm, and none of those companies even make smartphones anymore. OK, BlackBerry still makes a phone or two, but they’re hardly of consequence.
Moving beyond the companies that dominated the market, smartphones themselves were much different than they are in 2015. They came in all shapes and sizes, and each new year brought new phones with new features and new designs. They launched when they were ready, not on any set schedule, and new models were released all throughout the year.
Then, Apple released the iPhone.
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I’m not going to dive into all of the different ways Apple’s iPhone changed the industry. We’ve done that dozens of times in the past, and I’m sure we’ll do it again in the future. Instead, I want to focus on one particular piece of Apple’s strategy that every other global smartphone company has adopted.
The problem, of course, is that it doesn’t seem to be working very well for any company other than Apple.
Each and every year, Apple releases a new iPhone that is very similar to the previous year’s model, but a bit better. New iPhone models are faster than their predecessors, they’re thinner than their predecessors, and they sometimes feature better displays and other upgraded components. But generally, they look a whole lot like the iPhone models they replace. In “S” years like 2015, Apple even goes as far as to reuse the same case design and only upgrade the phone’s internal components and features.
Despite the striking similarities between each iPhone model and the one that preceded it, Apple’s phone sales continue to climb. Every year, Apple sets new launch-weekend sales records and new full-year sales records.
Everyone has his or her own theories on why Apple is able to find so much success with this strategy. In reality, it’s the result of a combination of several of the most popular theories — hype, marketing, a shockingly faithful fan base, superior design, superior quality, a superior user experience, and so on.
But Apple’s unprecedented success has led its rivals to adopt the same strategy with their flagship smartphones, and to be frank, it’s just not working. The only other company this strategy has really worked for is Samsung, and it took tens of billions of dollars in marketing and advertising for Samsung to find success.
Think about that. Tens. Of billions. Of dollars. And even then, success was short lived; Samsung’s growth hit a wall eight quarters ago and its profits and flagship phone sales are now in decline. In its most recent quarter, the brand new Galaxy S6 was no match for the aging iPhone 6, and Samsung’s mobile profits plummeted 38% as a result.
In 2015, a phone is a phone is a phone. They all look the same and they all have the same core features. I’ve written about this before — just look at the images in this post. But this is exactly why I’m so intrigued by the new Moto X Motorola unveiled on Tuesday.
First, let’s skip the suspense: the new Moto X will not be a sales leader this year. Motorola simply doesn’t have the size, budget or customer base to release a flagship phone that can compete with the big boys.
With that out of the way, I’m actually pretty excited about the two new Moto X handsets Motorola unveiled earlier this week. You can see my quick hands-on with one of them, the Moto X Pure Edition, right here.
In many ways, Motorola is still modeling its strategy after the iPhone. In some ways though, the company is travelling its own path, and I commend Motorola for thinking outside the box, even if it’s ever so slightly outside the box.
For starters, Motorola’s flagship phones have a unique selling point: buyers can customize them in dozens of different ways. Plastics, woods and leathers are all options, and different color metal accents add additional flare.
The Moto X looks unique. It looks special. It offers something other phones do not.
Motorola goes a step further to address real pain points that every smartphone user has. Battery life is at the very top of every list of important factors for smartphone buyers. While Apple chooses to focus on making its iPhones thinner, Motorola just stuffed a gigantic 3,000 mAh battery into the Moto X, and it’s still thin enough to be comfortable.
Look at LG and HTC. This year’s G4 and One M9 are fantastic phones, and either one is a fine choice for consumers. But they’re “S” phones. They look just like their predecessors but offer more power and a few new features.
Guess what: HTC is still nosediving and LG only made enough profit last quarter to buy 235 iPhones.
Meanwhile, Apple is expected to release the iPhone 6s and iPhone 6s Plus in less than two months, and sales will skyrocket. Apple might even manage to top last year’s holiday quarter, which was the most profitable quarter that has ever been reported by any company. If not this year, certainly next year when it launches a redesigned iPhone 7 and iPhone 7 Plus, potentially with a third new iPhone as well.
The iPhones 6s and 6s Plus will look almost exactly like last year’s models. They’ll be slightly more powerful and will include some new features and upgraded hardware, but nothing major (here are the six most exciting new features expected to hit the iPhone 6s). As an Apple rival, it’ll be easy to look at the monster sales numbers Apple will proceed to put up, and think that continuing to copy the same strategy will eventually pay off.
It won’t.
Apple pulls in more than 90% of the smartphone industry’s profit among global vendors each quarter. That staggering figure isn’t likely to change anytime soon, and it might never change unless Apple’s rivals start to think outside the box and come up with phones that are truly new and truly provocative.
The “next big thing” isn’t a bigger, faster version of last year’s phone. It’s something novel and exciting that smartphone users have never seen before.
If you build it, they will come.
