Apple's Next iPhone Must Wow to Win
The arrival of Google's Nexus One smartphone is like the Beatles following Elvis Presley. Elvis revolutionized music and retained his immortal status, but The Beatles were great in their own right. The technological advantage that Apple had when it introduced the iPhone is diminishing (think Fat Elvis). And so the next iPhone will need to be another game-changer for Apple to remain on top.
With the original iPhone, Apple addressed the shortcomings that most devices in the category had with fresh, innovative ideas. Initially, there were many second rate imitators, but now, products including the Palm Pre and Nexus One match if not surpass the iPhone in numerous ways.
I love my iPhone, and couldn't imagine life without my apps. However, there are great alternatives for people who have not yet upgraded to a smartphone or want to save on their monthly service fees.
Case in point: A few months back, a friend and I were sitting in an East Village bar waiting for a bossa nova show to begin. We both whipped out our phones (his was a Pre) and had the proverbial "size contest." I couldn't knock the Pre, and he is very happy with it.
Moreover, AT&T's decision to carry five Android phones is prescient -- Android has no place to go but up. While it's still not fully mature, Android is a great operating system for device manufacturers that do not have their own OS, and that is somewhat reminiscent of the early days of Microsoft Windows.
What is Apple to do? It will do very well due to the strength of its brand, and dedicated users like myself, but those strengths will eventually decline into inertia. Even a phone that leaves the Pre and Nexus One in its dust will not be good enough -- Apple must bring back the "wow" factor in order to maintain its leadership of the market (or cede and focus on another groundbreaking product).
I'm confident that Cupertino has enough tricks up its sleeve that it could leave the rest of the industry chasing the iPhone again. There is room to play as the smartphone category grows, but anything less than a revolutionary product simply isn't good enough for Apple.