Case Study: Mobile Phones 2000 words

Case Study Analysis: Mobile Communications

 

Manuel Castells has emphasized how the shift of mobile phone from specialist technology to mass-market device has made the mobile communications market vitally important:

 

From a professional communication device catering for an upscale market, mobile devices have become mass-consumer products, woven into the communicative practices of hundreds of millions of people everywhere in the world. (2006, p.245)

 

This ubiquity, he goes on to argue, has not only been shaped by, but also goes on to actively shape social trends, behaviours and forms of social interaction (2006, p.246). It is not just the case, however, that mobile technology in general is altering social structures, but it is the development of specific technologies, platforms and applications that lead to specific changes in society:

 

The specific characteristics of the technology – in this case, microelectronics based, digital, wireless communication – enable, enhance, and innovate in the realm and content of communication by extending the domain of what is feasible (2006, p.246)

 

An analysis and comparison of the services and technologies offered by the iPhone and Android platforms is therefore of great importance. Developments within these fields, as Castells’ argument suggests, affect the way we communicate, interact, engage with our surroundings. Mobile communication technology commentators such as Gurley have argued that it is the development of applications (or ‘apps’) in particular, which have caused the real change in how consumers relate to digital mobile devices, “applications make the smartphone trend a revolutionary trend – one we haven’t seen in consumer technology for many years.” (Gurley, 2010). This report will go on to outline, compare and critically analyse the main features of Apple’s iPhone mobile platform and app store and Google’s Android platform and application market. It will look at the type of devices used by each platform, including operating systems, features, technologies and limitations. It will consider the market and user-bases for these platforms, as well as comparing the business models employed. Finally it will look at the marketing and trends within each company’s application store.

 

The main mobile communication device used by Apple is the iPhone. The iPhone employs a multi-touch LCD screen display, which uses software to recognize finger movements, allowing users to ‘swipe’ between screens or within applications on the device. An ‘accelerometer’ recognizes movements to enable switching between landscape and portrait modes. GPS sensors and a digital compass are built in, and 3G technology is used for internet access via cellular data networks. Its operating system is developed from the Mac OS X, using the Darwin foundation and a Unix-like system (Apple, 2010a). There are also limitations to technical capabilities. One major drawback that has been pointed out for the iPhone for example is its lack of ability to multitask, meaning that users can only access one app at a time. New developments in software however are expected to overcome this with the OS4.0 operating system. (Hardawar, 2010). More recently Apple have launched the iPad. This employs similar technical specifications to the iPhone but uses a 9.7 inch display (Apple, 2010b), making it far larger than other mobile communications devices, which have evolved from mobile telephones. Android uses an operating system that is a modified version of Linux. Commentators have pointed out that it operates in a similar way to the iPhone OS (Gurley, 2010). By contrast, however, Android can be used by a far greater range of devices, including mobile handsets manufactured by HTC, LG, Sony-Ericsson and Geeksphone (Android, 2010a). With some devices offering wi-fi, some with slide-out keyboards, some with touchscreen, some with video facilities and some without, this leads to far less standardization than the iPhone device. This could be seen negatively in terms of a lack of focus for application designers and consumers. On the other hand, the increased flexibility could be seen positively. Athow argues for example that “the potential larger user base” of Android-based devices was a key factor in predicting sales growth of 900 percent in 2009 as against Apple’s predicted growth rate of 79 percent (Athow, 2009).

 

This range of devices, then, also allows Android to diversify in its target markets. The Wildfire Android, for example, has recently been launched specifically targeted at youth markets (Robinson, 2010). As Robinson goes on to argue, “the firm is touting the new device’s credentials as a ‘social media phone’ thanks to its Friend Stream app, which aggregates Facebook, Twitter and Flickr into a single tool” (Robinson, 2010). This use of social networking to target the youth market could also backfire however, as recent reports suggest that the highest rate of growth in social network sites is an older demographic:

 

The fastest growing segment of Facebook users in recent months is women over 55…Hitwise reports that Facebook’s American Audience as a whole is becoming older and wealthier (Smith, 2009)

 

Research has suggested that the iPhone market is more standardized, “Many of the iPhone users are young. Half are under thirty. Fifteen percent are students. When asked to rate their level of technology expertise, most described themselves as technically sophisticated” (Perez, 2008). The same research also suggests that the user-base is loyal, with over 75% of users being previous Apple customers. Contemporary industry reports however, suggest that Android has now overtaken iPhone in terms of market share. According to data from the NPD Wireless Market Research report, Android, with 28% of the market share is now second only to Blackberry (with 36%) and far ahead of iPhone (on 21%) (Conneally, 2010). Gurley argues that, in terms of future market prediction, iPhone users will remain loyal and Apple, with higher specifications, will dominate the high-end of market share, but Android, with cheaper prices, will successfully come to dominate the mass-market (Gurley, 2010). Some have pointed out limitations in the market for smartphones suggesting that both companies will have to expand into “almost every and all embedded device market” (Gurley, 2010). Flexible operating systems and continued developments of new apps will allow for this.

 

Another point of contrast is in the companies’ different business models. Apple originally had a unique relation to its carriers, where customers had to pay full retail price for the handset and carrier’s had to share a cut of their revenue with Apple. This has now changed with carriers subsidizing the cost of the phone and making money instead from monthly charges (Elmer De Witt, 2008). This is very different from the Android model. As Gurley has argued, while Apple seem to have an “aggressive relation to the carriers. Google seem unrealistically accommodating” (Gurley, 2010). Rather than the carriers having to pay up front for the devices, Google actually pay them to take Android devices, making money instead from a Google search box incorporated into the devices. In terms of app development biseinss models, both companies use third party developers. For Apple, all developed apps are shipped through their own App Store. Parnot (2008) has described three different business models currently operating within the app store – either giving apps away for free, aiming for big fast sales, or aiming for sustained sales. An analysis of the App store shows many developers giving away ‘lite’ versions of the apps for free, hoping to hook in consumers who will then pay for ‘full’ versions (Apple, 2010c). Android’s development of open source technology can be seen as a direct challenge to Apple’s ‘walled garden’ system, where they have control over application content. Some argue that the Android open source approach will lead to greater success (Farrell, 2010), while others have argued that Apple’s approach will make more profit within the context of the telecommunications market (Palmer, 2008).

 

In terms of available applications, the Apple ‘app store’ gives the impression of offering a wider range of software. The importance of ‘diversity’ is emphasized through visual imagery showing app icons overlapping and spilling out of the iPhone (Apple, 2010c), and also through the targeting of apps according to lifestyle categories rather than particular technical categories of software. ‘Lifestyle targeting’ has been drawn attention to as a key factor in product marketing, suggesting that rather than using traditional categories of age, class or gender which are too broad, contemporary market segmentation is becoming increasingly personalized to account for the proliferation of diverse attitudes, values and preference sin society (Leiss et al., 2005, p.264). The app store can be seen to do this through its focus on “apps for cooks”, “apps for the great outdoors”, and “apps for music” showcasing the range of lifestyles its apps can cater to (Apple, 2010c).  Looking in more detail at the available apps, there are many that use the device’s built in locational functions, Around Me for example, which allows the user to locate nearby restaurants or other facilities (Apple, 2010c). There is a trend for using, not only locational services, but also apps that multitask with other of the iPhone device functions such as Eat Fresh which makes use of the iPhone’s timer and GPS functions. The focus on culinary experience, keeping up to date with news, and art and nature based apps suggest that Apple is targeting a range of lifestyles associated with older markets, attempting to diversify its predominantly ‘tech-savvy’ and youthful market share. The Android store, on the other hand, seems almost entirely focused on games, with all twelve of the ‘top free’ and all twelve of the ‘top paid’ apps on the main store page being games. This suggests a specific targeting of youth markets, and this is supported by the other ‘featured’ apps which include apps such as Slacker Radio There is also more US-specific content on the site with apps such as Congress (Android, 2010b). The trend for locational based apps shows how developers, rather than simply adapting other digital media applications are using the mobile nature of the devices in imaginative and, potentially new ways. Combining this with the focus on lifestyle targeting shows how apps are changing the everyday relations of individuals to each other and to their digital. social and physical landscapes.

 

 

References and Bibiliography:

 

Android (2010a) ‘All Android Phones’, http://www.androphones.com [accessed 17th May 2010]

 

Android (2010b) ‘Application Market’, http://www.android.com/market/#app=com.epocrates [accessed 17th May, 2010].

 

Apple (2010a) ‘iphone Technology’, http://www.apple.com/iphone/iphone-3gs/high-technology.html [accessed 17th May, 2010].

 

Apple (2010c), ‘App Store’, http://www.apple.com/iphone/apps-for-iphone/ [accessed 16th May, 2010].

 

Apple (2010b) ‘iPad’, http://www.apple.com/ipad/ [accessed 17th May, 2010].

 

Andersson, C. (2006) Mobile Media and Applications, from Concept to Cash : Successful Service Creation and Launch. Chichester: Wiley.

 

Athow, D. (2009) ‘Google Android to grow by 900 Percent in 2009 says research firm’, IT Portal, http://www.itproportal.com/portal/news/article/2009/5/12/google-android-grow-900-percent-2009-says-research-firm/ [accessed 15th May, 2010].

 

Castells, M. (2006) Mobile Communication and Society : A Global Perspective. Cambridge, Mass. ; London: MIT.

 

Conneally, T. (2010) ‘Android usurps iPhone in market share’, Beta News, May 10th 2010, http://www.betanews.com/article/Android-usurps-iPhone-in-market-share/1273506043 [accessed 15th May, 2010].

 

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Farrell, N. (2010) ‘Apple is Open Source’s Sworn Enemy’, TechEye, http://www.techeye.net/mobile/apple-is-open-sources-sworn-enemy [accessed, 18th May, 2010].

 

Gurley, B. (2010) ‘Android or iPhone? Wrong Question’, abovethecrowd,com, http://abovethecrowd.com/2010/01/05/android-or-iphone-wrong-question/ [accessed 18th May, 2010].

 

Hardawar, D. (2010) ‘Apple announces iPhone multitasking in 4.0’, MobileBeat, April 8th 2010, http://mobile.venturebeat.com/2010/04/08/apple-announces-iphone-multitasking-in-os-4-0/ [accessed 18th May, 2010].

 

Jelassi, T. & Enders, A. (2005) Strategies for E-Business : Creating Value through Electronic and Mobile Commerce : Concepts and Cases. Harlow: Financial Times Prentice Hall.

 

Jones, D. (2005) Ipod, Therefore I Am. London: Weidenfeld & Nicolson.

 

Leiss, W., Kline, S, Boterill, J., and Jhally, S. (2005) Social Communication in the Mediated Marketplace. London: Routledge

 

Palmer, S. (2008) ‘Of Iphones and Androids’, http://www.shellypalmermedia.com/2008/06/16/of-iphones-and-androids-a-tale-of-two-business-models/, [accessed 17th May, 2010].

 

Parnot, C. (2008) ‘Business Models for iPhone Applications’, MacResearch, http://www.macresearch.org/business-models-iphone-applications [accessed 17th May, 2010].

 

Perez, S. (2008) ‘iPhone users are young, rich and technically savvy’, ReadWriteWeb, http://www.readwriteweb.com/archives/todays_iphone_users_are_young_rich_and_technically_savvy.php [accessed 14th May, 2010].

 

Robinson, D. (2010) ‘HTC aims Wildfire Android phone at youth market’, V3, http://www.v3.co.uk/v3/news/2263147/htc-aims-wildfire-android-phone, [accessed 17th May, 2010].

 

Smith, J. (2009) ‘Facebook growing amongst older, wealthier Americans’, Inside Facebook, http://www.insidefacebook.com/2009/02/11/facebook-growing-amongst-older-wealthier-americans/, [accessed 14th May, 2010].

 

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Zheng, P. & Ni, L. (2006) Smart Phone and Next Generation Mobile Computing. San Francisco, Calif.; Oxford :: Morgan Kaufmann ; Elsevier Science [distributor].