02 December, 2011

Leapfrogging phone war

Melbourne Herald Sun, Friday December 2, 2011

If there’s one thing the advertising industry loves it’s a war. Oh, not the “bang bang you’re dead” kind - the “my product is better than yours” kind.

Once the companies don their war paint and charge into the streets, they will stop at nothing - and advertising is one of their cheaper options.

As I predicted 18 months ago, the mobile phone companies weren’t going to lie down and let Apple steamroll the market. They have billions of dollars of investment to protect and they have been working with fury on all fronts: the product development, bells and whistles, retail deals and of course the flood of mobile phone ads we see.

The combined marketing onslaught must be working. Despite the impression that everyone who sits near to you on a train or a cafĂ© has an iPhone, these days it’s hard to tell the difference between the real Apple and the many similar fruit around.

In fact, Samsung last month proudly declared that their S2 phone had hit top spot in Australian smartphone sales. This follows a year that saw Apple knock Nokia off its perch, now they are under attack themselves.

HTC is another fast-growing phone. The Taiwanese company has startled American analysts by snatching the lead from both Apple and Samsung. Two years ago the company only sold its phones under the stickers of other companies. Now it is selling one quarter of all smartphones in the US.

This leapfrogging looks like the way of the future in the volatile market. Most of the contenders are taking advantage of Google’s Android operating software, highly praised by the critics and allowing the phones to perform new tricks.

Android is an “open code” software. In other words, it is made available to anyone who wants to use it for no fee. Apple’s code, by contrast, is strictly proprietary - and not allowed into anyone else’s hands.

Except, that is, for the bit that allows external developers to attach their applications to the iPhone. The apps market has been the secret to the phone’s success. The last figure I heard was that there are now half a million of the little programs available for iPhones.

However, the developer has to pay Apple a royalty of 30 per cent for any he sells. Whereas Android’s will be royalty-free. So you can bet that all those apps will quickly be edited to fit the Android space.

The Australian phone wars are making world news too. Determined to throw a spoke in Samsung’s wheel, Apple has tried to ban Samsung’s new tablet, the Galaxy Tab 10.1, arguing that it will take away iPad 2 sales - so far they have sold 500,000 iPads in Australia.

Then, just two days ago the Federal Court overturned an injunction and the Galaxy could be selling by next week. So expect another flood of advertising to pour out of the fortresses of the rival corporations. Their advertising agencies must be rubbing their hands in glee.

A new ad in the US is delighting in poking fun at the devoted Apple fanboys. It features a round-the-block line waiting to buy the newest iPhone release. The camera eavesdrops on the Apple corps.

"I am so amped, I could stand here for three weeks," says one.
"Only seven people stand between us and meaning," says another.
"If it looks the same, how will people know I upgraded?" wonders a third.

Doubts start creeping in - the Samsung has a bigger screen, the Apple has battery problems and isn’t 4G. But one determined fanboy sums it up:

"I could never get a Samsung. I'm creative."
His friend chips in: "Dude, you're a barista."

Expect to see a lot more fireworks from Roman candles to bangers to mortars as this war gets progressively more bang-bang.

ray@ebeatty.com