iPhone’s Devil Wearing Prada
by Aner Ravon

Friday Apple got a taste of the love it should expect from the cellphone market. LG made the new Prada device official and as many noted, it looks a lot like the iPhone.  

Check out the following on YouTube. I also found these pics on TechCee, a good gadget comparison blog:

Read a full comparative analysis here and here.  

I never subscribed to the “Apple religion” and do not envision myself buying an iPhone or a Powerbook anytime soon. If was upbeat after Steve Job’s presentation at Mac World, it is refreshing to see that handset manufacturers are not falling behind.

Apple expects a 50% profit margin and substantial penetration into a market that turns around a billion device a year. I don’t see it happening. The main reasons are

(a) Better positioned competitors like LG, Nokia, Sony Ericsson, Samsung and even Motorola

(b) Deep and new dependency on carrier networks for distribution, a dependency that impacts end user reach, geographical coverage, pricing, service bundles and customization.

(c) Inability to create a real technical advantage (see a good analysis on RedOrbit). Apple does not have real experience in making cellphones and they are going to learn how important that experience is.

Indeed, now that the standing ovation is over, we start seeing great devices and a lot of iPhone backlash. Prada is a fantastic brand and unlike the Nokia Vertu it is expected to be somewhat affordable. The initial end user price point is at $780, higher than the $500 and $600 iPhones but the figure lies and I expect the LG Prada ending up costing much less. LG enjoys economies of scale and can offer a lower overall price point. It also enjoys an 6% or so market share already.

Some argue that the fundamental problem of the iPhone is that it has a split personality. It’s not a Smart phone because Smart Phones are about services and openness. It’s not an MP3 player because it has a better alternative - the good old iPod. It’s not the ultimate accessory because it’s too big. So what exactly is it?

Personally, I prefer to associate myself with Prada than with Apple, but that’s just me. Now let’s see what Sony Ericsson and Nokia come up with.

Or better yet, Gucci and Georgio Armani!

Aner Ravon
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