As the smartphone market increases and Apple gobbles up market share from its competitors what can smaller companies do to compete?
First, copy the good aspects of the product you are trying to compete against. Next, improve your product in the areas that your competitors are deficient, and finally, if you are smaller and more nimble you lower your price. You lower the price because you are too small for the big boys to adjust their pricing in contrast to you.
This is exactly what Palm is trying to do with the Palm Pre smartphone. Its a very good first try, and I think the phone has great potential, but right now its not up to snuff when compared to the iphone. However, Palm is doing something that I think Apple is very scared about.
The Palm Pre is (Sometimes) compatible with iTunes. Apple doesn’t open iTunes to outside devices, so syncing doesn’t work on anything except Apple Ipods/Touches/Iphones, etc. The Palm Pre masquerades as an older Ipod in order to sync with iTunes.
When the Palm Pre launched it worked great with iTunes, then about a week ago Apple released a “fix” for iTunes that broke compatibility with the Pre. Palm has since released version 1.10 of webOS that has a fix for the fix that broke compatibility. I suspect Apple and Palm will play this cat and mouse game for a while, but here is the part that almost no one is talking about -
Apple is scared to death to sue Palm and here’s why – If Apple sues Palm and loses they just don’t lose to Palm, they lose to everyone. Right now the issue is still on legal quicksand. There is all kinds of legal precedent that backs up Palm’s reverse engineering of the hooks into iTunes. Many larger companies are too afraid of the legal implications of tangling with Apple, but Palm is a cornered beast. They really don’t have a lot to lose, and Apple has everything to lose. Palm knows this. If Apple sues and loses be prepared for a tidal wave of “ipods” (Every smartphone, mp3 player, and modified 1985 walkman) connecting to iTunes in a matter of weeks.
There is nothing “technical” holding back devices from connecting to iTunes, its all legal threats keeping devices off right now. I suspect in the end that Apple will “decide” (be forced) to license devices to iTunes rather than risk losing the lawsuit and getting no license fees.
I’m a HUGE Apple fan, but I’m totally rooting for Palm on this one!!!
Matt Heaton / President Bluehost.com
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