Apple pegs back rivals with iOS 5

OvumSince the last update to the iOS platform a year ago, the other smartphone platforms have make considerable advances, placing significant pressure on Apple to innovate on its own platform at the risk of being left behind in terms of functionality. Apple has certainly taken this on board and has delivered a considerable update to the platform with iOS 5.
 
While the majority of new features borrow heavily from the innovations of Apple’s competitors, the popularity of the iOS platform, which has now been shipped on 200 million devices, and the company’s ability to deliver an excellent user experience, means that these features will undoubtedly prove popular.
 
It’s interesting to note that on this occasion Apple has not announced new iPhone hardware alongside the software update, though the new features revealed in iOS 5 give a strong indication as to the capabilities of the next hardware refresh.
 
With the launch of iMessage, Apple has given RIM and the mobile operators something to keep them up at night. iMessage bears more than a passing resemblance to the successful BlackBerry Messenger service, but without the service fees that are split between RIM and the mobile operator.
 
Operators also stand to lose revenues from SMS, as iOS users switch away from the operator-managed service to the IP-based iMessage for their communications. Apple is clearly hoping to not only entice users away from BlackBerry with iMessage, but also hopes to recreate the “stickiness” of the service which instills such loyalty in BlackBerry users by limiting it to iOS devices. Apple should not underestimate the scale of the task here – the very fact that such a service is so “sticky” means that it will need to attract a critical mass of users before iMessage really takes off.
 
Finally embraces Web services
At odds with the other mobile platforms, Apple has traditionally not placed a huge emphasis on the cloud, choosing instead to treat its devices as standalone units and relying on physical cables to transfer data between them.
 
The new iCloud automatically replicates content between a user’s iOS devices, which will be a cause of concern for operators and companies such as Dropbox which offers cloud storage and backup services. One small consolidation for operators is that the iCloud will only sync when the device is connected to a Wi-Fi network, which at least will save the mobile networks from this new deluge of data.
 
Apple has wisely chosen to scrap the fee for its cloud services, having come to the conclusion that the value of increasing Apple customer’s reliance on its services, and the resulting repeat device sales, is more valuable that the revenues that were generated via MobileMe. This move reiterates the fact that Apple is primarily a devices company, and will use services to make its products more desirable rather than to monetize them in their own right.
 
Third-party integration hints at future of iOS
For the first time, Apple has integrated a third-party service, namely Twitter, into the core of the iOS platform.
 
Twitter seems a curious choice as the sole service to integrate, and arguably Facebook with its 700 million users (compared to Twitter’s 200 million) would have made a much more popular choice.
 
It isn’t the first time that Facebook and Apple have failed to partner though; Facebook Connect was reportedly removed from Apple’s Ping social network just prior to launch, hinting that there may be more rivalry between the two companies than meets the eye.
 
Nick Dillon is a devices and platforms analyst at Ovum. For more information go to www.ovum.com

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