What does the new Apple vs Palm have in store?
This month of course another Apple conference where dully the latest version of what once was know as the “Jesus-Phone” got presented. Nothing groundbreaking here; just a small update of the existing version which makes it specifications more in-line with the competition out there.
More noticeable was to see the resurrection of Palm with its new model the Palm Pre. Palm, once one of the leaders in handheld devices, is trying to make a come back on the market with a remarkable strategy. It has made the Palm Pre synchronisable with i-Tunes.
Palm media sync is a feature of webOS that synchronizes seamlessly with iTunes, giving you a simple and easy way to transfer DRM-free music, photos and videos to your Palm Pre.(2) Simply connect Pre to your PC or Mac via the USB cable, select “media sync” on the phone, and iTunes will launch on your computer desktop. You can then choose which DRM-free media files to transfer.
Palm has been able to accomplish this by taking over former Apple employees and rewriting its software in such a way that iTunes now thinks it is connected to an iPod. But wait a minute, Palm is actually allowing its users to use the software of it’s main competitor AND Internet store?
The strategy behind this is to finally eliminate one of Apple’s key competitive advantage over the years. It began with the introduction of the iPod in combination of the opening of the digital iTunes Store two years later. It enabled Apple not just to sell handsets and then loose the customer, but with a value added service they where able to retain them. And the results have been impressive:
By unlocking this exclusive connection between iTunes and the iTunes Store, Palm hopes to break this monopoly and create an advantage of its own. The Pre will not only be able to download from the iTunes Store, but also from any other store. Something the Apple products cannot. Apple was not amused and released the following statement:
Apple designs the hardware and software to provide seamless integration of the iPhone and iPod with iTunes, the iTunes Store, and tens of thousands of apps on the App Store. Apple is aware that some third-parties claim that their digital media players are able to sync with Apple software. However, Apple does not provide support for, or test for compatibility with, non-Apple digital media players and, because software changes over time, newer versions of Apple’s iTunes software may no longer provide syncing functionality with non-Apple digital media players.
One gets the feeling they might “accidentally” update their iTunes in such a way that third parties will be kicked out again. Palm states they can’t. It’s going to be an interesting cat and mouse game indeed.
But there’s more.
To further stress the importance of added value: there is a second field in which others are trying to mimic Apple’s success. It’s the field of downloadable applications. With over 50000 applications available and more than a billion downloads since its launch last July, it’s fastly becoming Apple’s next Holy Grail. And with Nokia, Google and BlackBerry and Palm all having launched their own sites with downloadable applications, Apple has decided to take it further with it’s new iPhone 3 GS.
On previous versions of the iPhone, applications linked users to Web sites where they could buy consumer goods or other items. With the new iPhone 3.0 operating system, users can shop entirely within apps designed specially for the phone, which promises to make for smoother transactions.
App developers love this new function. Until now, they earned money only when people bought applications through Apple’s App Store, or from selling ads within the apps themselves. But now, for example, a game developer could charge users a few extra dollars to access higher levels of a video game. Other apps could allow users to locate the nearest movie theater, and then buy tickets.
For Palm in the meantime it will be a long hard journey to catch up. Although a comparison now isn’t fair (iPhone has been on the markets for years), the difference is mouth opening.
The Pre’s app store, known as the App Catalog, had just about 30 apps one week after the device’s June 6 launch. The number has remain unchanged since then, says Medialets, a mobile analytics and ad targeting company.
What’s kept developers away has been the fact that the software developers’ kit hasn’t been easy to get, and the low user base of the Palm Pre compared to rivals such as the iPhone and BlackBerry, say industry watchers.
Conclusion: The Smart Phone market is ever further expending, with developments following each other in a fast pace. The smart-phones market is expected to expand this year alone by 27% to 177 million units (Gartner.com). But what maybe even more important is the role of value added services around the mobile markets. First there was the role of the iTunes Store and now downloadable applications is the next logic step in creating added value to existing customers for handset manufactures. But not only they can benefit from creating tying mobile customers to their services.
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