Thursday, June 19, 2008

Why iPhone Wannabes Don't Cut It

Apple's influence on high-tech markets has long exceeded the company's relatively small market share, and nowhere is that more obvious than in the wireless phone market. Barely a year after it introduced the original iPhone, Apple (AAPL) has redefined the wireless handset.

And with the impending shipment of a new version that should put the iPhone in the mainstream of consumer and business markets worldwide, Apple is extending its sway over much larger players such as Nokia (NOK) and Samsung.

The most immediate impact of the iPhone has been on hardware design, encouraging a rash of imitators with big touchscreens. That includes the new Samsung Instinct, which Sprint Nextel (S) has been billing as an iPhone killer. Even Research In Motion (RIMM), whose executives have ridiculed the iPhone's lack of a physical keyboard, is rumored to be developing a touch-based BlackBerry. (The company declined to comment on future product plans.)

Such efforts largely miss the point. Certainly, the beautiful hardware design adds tremendously to the emotional appeal of Apple products. But it's the software that makes the iPhone, the Mac, and the iPod stand out from the pack of wannabes.

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