This week, Google announced the acquisition of key HTC assets. This will give them some of the hardware technology expertise, the design skills and the experience in smartphone retail distribution they badly need. Due to Android’s massive fragmentation, Google needs to control the distribution of its services, to reduce its traffic acquisition costs and to build more integrated experiences. Two weeks ahead of the likely announcement of new Pixel smartphones and other emerging hardware devices, HTC’s acquisition illustrates Google’s commitment to the consumer device space. Official release of new products on October 4th is likely to demonstrate that Google is finally (Motorola anyone?) more serious in controlling the device ecosystem.
Last week, Apple announced its latest flagship device. We don’t expect the iPhone X to disrupt the smartphone market the way the initial iPhone revolutionized mobile and marketing. However, it will secure Apple’s leadership in the high-end smartphone segment thanks to its integrated hardware/software approach and powerful developer and brand partner ecosystem.
B2C marketers building mobile experiences must make challenging strategic decisions to allocate resources to address both Google’s Android and Apple’s iOS based on these titans’ current consumer adoption, technical features, and development opportunity. At the same time, marketers must anticipate how mobile will evolve to activate new branded experiences in a future driven by disruptive technologies such as Artificial Intelligence, extended reality or IoT.
If we put these two announcements in perspective, what do they mean for marketers? I believe they have two main implications:
- It is time to think differently about smartphones: mobile is like electricity. A first wave of change that enables new disruptive technologies to emerge. Indeed, mobile is playing a central role in activating adjacent technologies like IoT, Augmented Reality, and intelligent agents. Despite the growth of wearables and smart home speakers, no device will reach the scale of smartphones in the foreseeable future. Forrester forecasts an installed base of more than 3 billion active smartphone subscribers by the end of 2018, representing 55% of the global population. Consequently, smartphones will scale and activate many adjacent and disruptive technologies. Like the mobile natives raised with them in-hand, smartphones are hitting their teens, a time of new identity and morphing. Smartphones will mature from a user control interface to the intimate identity layer connecting people to the world around them.
- It is time to imagine new experiences and to focus less on ads. Apple is further differentiating on privacy and security (with Face ID) to build trust with consumers to keep them loyal to its brand. To boost its own app ecosystem, Apple’s new intelligent tracking prevention system is disabling cross-site tracking via cookies in Safari, de facto killing mobile browsing ad opportunities. Needless to say this is raising huge concerns as demonstrated by the recent open letter from the Digital Advertising Community. With iOS 11, Apple is also introducing new location-sharing permissions. Instead of sharing your location “never” or “always’, a third option is now to let app publishers collect your data only “while using the app”. Marketers should agree Apple is right to protect user’s privacy and to limit random data harnessing. Apple’s approach forces marketers to be transparent on the data they are using and why. Apple will push marketers to deliver new experiences -and less ads- in a more premium environment provided they follow the new rules of its app ecosystem.
Stop thinking of smartphones as just a device but more as the brain powering and orchestrating new experiences in an increasingly connected world.
To find out more on what marketers should know about the iPhone X and iOS 11, clients can access our latest report “Apple Raises The Bar For Marketers” here.
(Photo Credit: Marcio Jose Sanchez / Associated Press)