Asia marketing and innovation strategy – www.innovationcorner.com

An interactive Asia B2B marketing and growth strategy blog from www.solidiance.com to discuss ideas, thoughts and spread the "Growth & Innovation Gospel" across Asia

i-Phone comes to Asia : too little too late

Apple just launched its mobile phone in Asia. I won’t extensively comment on the technicality of the phone, neither will I comment in its look. I am sure that – like most Apple products – we will all agree that the iPhone looks good and will surely be very user-friendly.

However is a phone the next big innovation that will bring Apple to the next level of true consumer goods manufacturer and that will cement the company as Wall Street’s darling?

Since Apple recently dropped the word “Computer” from its name, we can assume the company sees Consumer Electronics as the next route to sustained organic growth. The global iPod sales are still healthy with 2006 sales up 35% from 2005 but plateau is looming down the road. Apple needed a “new iPod”, we got the…iPhone.

The battle that will (never) happen

Why the i-Phone is not really such an innovative product:

– Most key features available on the iPhone are already available on the market: MP3 player, Camera, Video, Conference calls, Emails, Web browser. The camera boasts a 2MB picture capacity. This was already available two years ago. Most high-end phones now offer 4MB++. To be truly innovative the phone should have been Voip-ready with Skype or G-talk.

– The operating system is not open-source which means hoards of free programmers and fans will not be able to build free plug-ins and find new ways to use the iPhone a la Mozilla. Let the users deliver innovation and correct bugs!

– The design is very déjà vu. Though thicker, most O2 phones have a similar look, and so does the LG KE850. The Multi-Touch interface will delight fans of the usually easy-to-use Apple interface and will annoy clumsy users with big fingers (like me) and/or clean-screen freaks. To protect the usually fragile Apple screens, a sliding cover/keyboard should have been provided. I am not a ‘metrosexual’ and would prefer to sacrifice good look over usability.

– The iPhone memory capacity is still limited to 4GB, 8GB, 16GB compared to what it could offer. It feels like Apple is using leftover flash memories from its iPod stock. To be truly innovative and disruptive the iPhone should have been equipped with 20GB+, somewhere in between the “small” and “large” iPods.

– The new i-Phone2 is now 3G. Great….Here is something new!

– Not for the office. Can’t type email messages like on a Blackberry (well at least not at the same speed!) and to make matters worse the i-Phone lacks data encryption. The i-Phone will not make its way to most boardrooms soon.

– No third party software and applications – the iPhone comes as is. This means Skype and Gtalk can not be self-installed. The likely scenario is an iTunes-like platform where owners will have to pay a small fee to download and install third-party software.

– Even the name is not new and not innovative. iPhone? Why not iTelephone, iCall, iThis and iThat? iPod is a great and innovative name but iPhone sounds really too obvious. On top of that it has been “borrowed” from Cisco which had also launched a few months before Apple a set of phones named… iPhone!

Frankly there is little innovation in the iPhone, if any it is incremental at best and surely not very disruptive. It is truly beautiful, but it is not disruptive per say. It will not send tremors in the mobile phone world. Apple’s commercial magic remains centered on borrowing existing technologies, magnifying them, packaging them into stylish design and creating best of the class marketing buzz. That’s all. It has worked in the past very successfully. It may work again.

So will the iPhone be successful in Asia?

Steve Jobs promised to sell 10 million units in 2008. This is probably a conservative number as 6 million units have been sold so far. The iPhone will sell well. No other consumer electronics manufacturer has reached the same level of ‘Brand Coolness’ as Apple. Many have tried and…are still trying. The iPhone will be a status icon, just like the iPod.

However Asia is not Europe and the US. Consumers are a lot more tech-driven and early adopters than western counterparts. Apple brings to Asia something “cool” but nothing neither really new nor already available in Asia for a while. Apple can forget about submerging Japan and Korea with its phone. The markets remain quasi-locked to outsiders. India and China may be the biggest mobile markets in the world but few will want to pay USD 200-300 for a phone. That leaves Apple to focus on smaller markets like Hong Kong, Taiwan, Singapore, and Australia to boost global sales.

Will the same iPod predator-free environment apply to Apple’s iPhone? This is not likely, especially not in Asia where Samsung has reached its very own new cool status. Apple has switched from a relative Blue Ocean Strategy to deep-dive into a shark infested Ocean. Walking into well-armed Nokia and Samsung’s territory may not be Apple’s best move. The only Holly Grail for the Iphone? Itunes.  Then again, the service wont be available for long in Asia…

Damien Duhamel

Managing Director

www.solidiance.com

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About Solidiance

Summary: Corporate strategist with extensive Asia-based management & operational experience. Manages the long-term strategic planning of the organization. Responsible for multi-country team management, PBIT and revenue growth, geographical expansion, business development, key staff recruitment, business unit strategy and processes. Speaks English, French, Vietnamese and "Survival" Japanese. In Asia Pacific for the past 21 years. Specialties: Disruptive innovation strategy & implementation, Expansion strategy, Benchmarking, Asia market entry strategy, Market research Asia, Market sizing, opportunity analysis & market feasibility, Sales & demand forecasting, Competitive intelligence and strategy, Customers acquisition & loyalty, New product development, Distribution & value-chain optimization, Industrial B2B branding, Partner evaluation & selection, M&A due diligence - valuation, Marketing & Corporate strategy, Emerging markets

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