When asked why he stopped patronizing a famed St. Louis restaurant, Yogi Berra once quipped, “Nobody goes there anymore. It’s too crowded.” That, marketing experts say, could one day be the fate of the iPhone. Apple may sell so many that at some point no one will want them anymore.
This week, Apple reported that its quarterly profit nearly doubled, in large part thanks to continued brisk sales of iPhones. The company sold 35.1 million iPhones in the first quarter, up from 18.65 million a year ago. But love affairs with inanimate objects don’t last forever, marketers say. SUVs and the rise and fall of the BlackBerrry, to name but two. “There’s always a tipping point for something being hot,” says Robert Passikoff, co-founder of marketing consultancy Brand Keys, noting that Nokia and Research In Motion had “the world by the tail” a few years back before the iPhone hit the market.
Apple already faces growing competition. Although the iPhone is the biggest selling phone, Samsung continues to sell more handsets than Apple. Samsung shipped 44.5 million smartphones and overtook Apple to become the world’s number one smartphone vendor by volume, according to research firm Strategy Analytics, while Samsung and Apple together accounted for more than half of all smartphones shipped worldwide in the first quarter for the first time ever. Samsung has already taken potshots at Apple with advertisements poking fun at people who stand in line for iPhones. “Samsung’s advertisements were poorly executed, but the underlying theme is real,” says behavioral psychologist Matt Wallaert. “Not everyone wants to share their identity with the 35 million people who bought an iPhone last quarter.”
For some, Apple’s brand is already losing its luster. George F. Colony, Chairman and CEO of Forrester Research, says Apple is a “charismatic organization” but lost that edge when the co-founder Steve Jobs died. Without Jobs, he believes the company’s momentum will only last for another 24 to 48 months. Russell Saint Cyr, a Montreal-based IT consultant, recently swapped his iPhone for a Samsung Nexus S. He says it allows him to back up his music without connecting his phone to his PC, it’s cheaper and has a bigger screen. That, and he didn’t want to follow the herd. Among techies, Saint Cyr says, the iPhone is already uncool: “It’s marketed towards simple folk who like shiny objects and dislike complexity, like Mac users who can’t handle two buttons on a mouse.”
In its favor, Apple has one iconic Smartphone product, around which it’s building an ecosystem, while Android devices are a motley crew of smartphones of varying quality, says blogger Timothy Sykes. “Unlike designer jeans, the more people on a technology platform like iPhone — or Facebook for that matter — the more people must join or feel ostracized,” he says. A never-ending stream of new apps will make the iPhone hot again and again, says Leonard Lodish, professor of marketing at the Wharton School at the University of Pennsylvania. But Edward Zabitsky, founder of ACI Research and the only analyst with a sell rating on Apple — says the soon-to-be-released Galaxy S3 could be one of many game-changers for the iPhone. “The competitive differences are getting smaller all the time,” he says.