- Brand loyalty. Apple's fans are die-hard partly because Apple doesn't (often) screw their users. You can expect timely (even major) updates to your iPhone for quite some time after release. When's the last time someone reported that they won't buy anything but LG/Samsung/Motorola?
- Apple also loves having you on the upgrade cycle. The difference is that these have been largely driven with hardware changes. Retina display, new styling, front-facing camera, GPS unit, 3G connectivity... etc.
There's no reason why Samsung, LG, Motorola et al cannot follow this model.
I have an iPhone 3GS already, and there's no incentive for me to upgrade to iPhone 4.
Which is pretty cool, considering that many people buy these iPhones with a 2 year contract. There's nothing more depressing than having to pay monthly rates for a deprecated product.
Which is why I think Apple's fine with a 2-3 years upgrade cycle, as long as you keep being an iPhone user.
I would argue that there is a reason why Samsung, LG, Motorola, et al cannot follow this model – Apple is a player in the high end of the mobile market. They come out with a new phone once a year, and it's hotly anticipated because in most (if not all) respects the new phone will be the most impressive phone on the market. Couple that with new OS features, and it creates quite a buzz.
If Samsung (for example) just made one phone a year, they'd lose market share because it would only be 'the latest thing' for a few weeks until someone else came out with an Android phone. Even if Samsung's product life cycle comes in one-year intervals, the rest of the Android community is much faster, and carriers will be glad to push the latest new phone with the latest whiz-bang features.
In order for Samsung to really compete, they would have to make a high-end, cutting-edge phone, comparable in build quality, features, and software to the iPhone. It would have to stand head and shoulders above the sea of mediocre Android handsets, and stay there for quite a while. It would need to be different enough from the rest that it was a clear winner, the Android phone to own this year. This would have to be said about the hardware and the software.
There are two problems here. Samsung isn't a software company, so their modifications to Android are superficial at best and mostly take the form of different UIs, as well as the bundled carrier apps that they have to agree to in order to get a carrier's full support. Samsung can't make a truly great smartphone because they're shipping the same thing everyone else is shipping – the latest Android build, with a different coat of paint.
There's also the hardware end. Apple knows that they're going to sell massive numbers of phones (according to the earnings call today, they're selling them as fast as they're making them, which I believe). They can pre-buy billions of dollars worth of components ahead of time to get preferential pricing and treatment. Their competitors can't match them because they simply cannot get the same hardware for the same price, and so their margins end up slimmer and they have to sell more units to recoup their costs.
Amusingly, Samsung is one of the companies Apple has preferential deals with (for Flash memory), and if I recall correctly, LG is another one (for LCD panels, not likely for mobile though).
So in order for Samsung to make the exact same hardware as Apple, they would have to sell it for more, in larger volumes, with lower margins, which would require betting big on one new product and impressing everyone. It would also require doing something new and innovative with Android, which is difficult because Google and Apple are both doing new and innovative things with their respective OSes so it would be difficult for Samsung to get ahead of either one.
Even assuming they did all that, they're still up against iOS's established mind share. Everyone's heard of the iPhone, and a lot of people want it. They want the apps, the TV shows, the movies, the music. Each step Apple has taken has built upon the successes of the last - first iTunes, then the iPod, then the iTunes Store, then movies and TV shows, then the iPhone, then the app store, and then the iPad. Samsung can't duplicate the entire stack, and they can't piece it together from existing offerings in a way that other providers (or end users) couldn't do. Even if they did manage that, they wouldn't be taking nearly as much of the profits from all of those services as Apple does with its own stack.
There's no way for Samsung (or the other providers) to differentiate themselves significantly. In consumers' minds, there's 'Blackberry', 'iPhone' and 'neither', and establishing a totally new category just for one phone based off of the same software as most of the smartphones in the 'neither' category isn't feasible; supporting it for two years afterward is impossible.
It's much more practical for Samsung to ship a new, slightly-better-than-the-rest phone every six months and just catch their share of the little fish, instead of trying to catch the big fish and risk getting hurt.
The reason I called you out as an iPhone owner, was that your summary of the situation seems to be quite polarised (TL:DR: Apple makes the best, the rest can't compete).
The reason why these other companies can't follow this model is more complex.
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In many ways Apple is re-running the battle it fought in the 80s and 90s with regard to the personal desktop computing.
Where Google (via Android) - together with its group of handset manufacturers - is taking the place of Microsoft and the associated group of PC-compatible hardware manufacturers.
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The situation comes down to compliments and commodities. The hardware is commoditised - this drives the price of hardware down - because so many companies can produce hardware for the Android OS, each is forced to become as competitive as it can. Android OS then takes a place as a necessary compliment.
In Apple's 80s/90s war, they did their best to stamp out any Mac-compatible machines. I remember in the early 90s there were quite a few manufacturers who tried to produce hardware that would be compatible with MacOS and they were stopped dead in their tracks.
In comparison, Microsoft's rights agreement with IBM spawned the birth of the 'PC Compatible'. Of course, the machine was arguably worse that the Apple Macintosh - but the fact that an ecosystem of hardware manufacturers was able to develop and create a life of its own, meant that Microsoft could produce software to compliment this commoditised hardware.
Microsoft won the war.
In my mind, due to Apple's philosophy - Android will most probably 'win' this war too. Unfortunately, shear force in numbers will generally trump beauty and intelligence.
I think the most amazing thing about Apple, is the absolute, total and utter control its able to exert on the way it's perceived. The word 'marketing' almost doesn't do it justice. Every owner becomes written in as a 'supporter' - there's a culture brought about through ownership that supports its main brand messages. It's superbly clever - and if Apple does win out, I'm sure this will be a large part of the reason behind its success.
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The problem I have with your analysis, is that you don't allow for the possibility that one of these manufacturers could step up to produce a phone that can compete with the iPhone's quality.
Android OS is creating a hardware ecosystem, in much the same way that the lack of licensing restriction allowed a PC hardware ecosystem to form.
From the past (and the development of the PC compatible platform), we can see that many different classes of hardware emerged - from bargain basement offerings to very expensive, luxury machines.
I can't see any reason why the same won't happen for Android OS. In fact many reviews have already reported that some of the newer Android phones are strong contenders for the iPhone's crown.
So, once again .. I'm led to believe that you might be an iPhone owner ;)
What I like about Apple is that I could get iOS 3.1.3 installed on a first generation iPod Touch. Doesn't run well, but it works, and I could get the games I play installed on it and running; most apps still run on iOS 3.x.
I also have an iPhone 3GS, with iOS 4.2 on it: there's no incentive for me to buy an iPhone 4, so I'll wait for iPhone 5 or even 6. Apple is still happy because I keep being an iPhone user.
This story about Android is pretty sad, as I was considering getting a Galaxy S. Now that Apple phones are sold by each of the 3 GSM/3G operators in my country (and for reasonable prices) ... what incentive do I have to buy an Android which I cannot upgrade myself?
- Brand loyalty. Apple's fans are die-hard partly because Apple doesn't (often) screw their users. You can expect timely (even major) updates to your iPhone for quite some time after release. When's the last time someone reported that they won't buy anything but LG/Samsung/Motorola?
- Apple also loves having you on the upgrade cycle. The difference is that these have been largely driven with hardware changes. Retina display, new styling, front-facing camera, GPS unit, 3G connectivity... etc.
There's no reason why Samsung, LG, Motorola et al cannot follow this model.