It’s all about the software

The recent unveiling of the iPhone 4S was greeted with a mixed reaction from the media and analyst communities. Many were expecting an iPhone 5, so there was bound to be some disappointment when the 4S was unveiled looking exactly the same as the previous model. However this doesn’t seem to have mattered one iota to the general public. With sales figures of over 4 million units for its first weekend, 4S sales are more than double those of the iPhone 4 which shifted 1.7 million units in its first weekend last year.

 

Apple have seemingly created an unstoppable demand for its products with loyal customers queuing for hours to secure the latest device on the opening day, and many customers apparently buying the device outright (SIM-free) rather than subsidised on a pay monthly contract. So iPhone 5 or 4S seems to make no difference, customers just keep on buying them.

 

Where the analysts may expect a revolutionary change in design, it’s hard to see the direction in which smartphones will go next. Apple truly changed the game with the original iPhone by replacing the traditional display screen and keypad combination with an all-in-one intuitive touch screen interface. And as we have seen, the look and feel of smartphones has been converging ever since, much to the chagrin of Apple, who are in litigation with several other manufacturers over the look and feel of their devices.

 

It seems there is now an accepted form for the touchscreen smartphone and bar preference for hard edges versus rounded corners, about the only obvious difference is the logo on the front or back. Even the device packaging of smartphones is converging.

 

Five years ago, The Economist published an interesting article ‘Phones are the new cars’ highlighting the parallels between the development of the car industry and the rapid evolution of the mobile phone.

The author made some astute observations about consumer buying patterns and the origins of the designs of each, and made some fairly safe predictions for the mobile phone of the future based on the ‘luxury features’ of today becoming the standard features of tomorrow.

 

However, the final prediction that handsets will become more diverse, rather than converging to become all-in-one media devices, was somewhat wide of the mark. This may have seemed like a sensible suggestion at the time, probably based more on the question of how anyone could produce such a magical all-in-one device rather than would anybody want one, however at the time nobody outside of Cupertino could’ve predicted what Apple were creating.

 

The Economist feature failed to recognise that differentiation would come from the software, not the hardware. The other game-changer with the original iPhone was of course the creation of the applications ecosystem and the App Store. Much of the intelligence and utility of the iPhone (and other smartphones) comes from the applications that can be downloaded to the device.

 

So a single device manufacturer has not built the ‘Swiss Army Knife’ style device to meet everyone’s needs, but has created an ecosystem to leverage its platform and extend its usefulness. A smart move indeed. Customers can modify the user interface and download the apps they need to suit their own preferences, but have no need to buy or use multiple devices.

 

The iPhone 4S does include some hardware improvements such as a better camera and faster processor, but it’s the software that sells it. Apple unveiled a host of new features in iOS 5, including iMessage, enhanced photo editing, the iCloud online storage service and Siri, the voice recognition application dubbed the ‘intelligent personal assistant’. And the popularity of these features and the rest is underlined by the 25 million iOS 5 upgrades reported over the first weekend alone.

 

It is pretty safe to assume there will be an iPhone 5 before too long, and when it does arrive it will most probably have a redesigned exterior. Apple are the masters of design and they are sure to release another beautiful device, but my money’s on the real revolution being in the software on the inside.