Everyone agrees Apple is innovative. Even mobile industry insiders reluctantly admit Apple is now a leader in mobile. But one set of innovation isn't enough, especially in the competitive mobile market. Apple has to continue to improve, to continue to break new ground, and to expand its product line to catch new opportunities. That was the formula that enabled Apple to resist all-comers in the mp3 player market for many years after the iPod's 2001 launch. With the iPod, Apple kept improving both its hardware and software and shifted from offering a single model with a single form factor to selling four models: Shuffle, Mini/Nano, Classic and Touch and in so doing reaching a range of price points.

So, where should Apple focus with the next version of the iPhone software? I'm approaching this from two angles: what are the new opportunities that Apple should seize? What are the weaknesses of its current offering that need improving? Here's my take:

  • Help app developers to better monetise their apps. Prices in the iPhone app store are typically very low: Under 10 Euros/dollars or 6 UK pounds is a routine price even for premium apps. many apps are just 1 dollar. Initial iPad app prices have started higher but the market may force them down in a second race to the bottom. To help, Apple should create new platform capabilities around advertising — perhaps based on Apple's Quattro Wireless purchase — see my colleague Julie's analysis of Why are folks so interested in Apple's ad inventory? Better app analytics and reporting would help immensely too.
  • Deliver more cohesive social communication abilities. Everyone uses their phone to communicate. Increasingly this communication ties into social networks, photo sharing services and a raft of other Internet sites. iPhone still delivers a segregated communication experience with a raft of independent apps that barely talk to each other. Apple should emulate the integration it offers between its own apps on the desktop and also help 3rd party apps link in too. As one example, the iPhone address book should integrate with Linkedin, Facebook and allow other app developers to extend it to tie in further services. Read this report for more: How Mobile Handsets Will Deliver 24×7 Social Computing
  • Make it easier for consumers to use multiple Apple devices in tandem, especially iPad and iPhone. As Apple embarks on a multi device strategy, first with the iPad, Apple needs to make it easier to use phone, tablet, computer and any other devices together. Apple needs to extend its MobileMe cloud service to help consumers. Read this blog and this consumer cloud report for more.
  • Break the compulsory tie to the PC or Mac and iTunes. While PC adoption is high, over 80% and rising in European countries like the Netherlands, iPhone OS' reliance on a PC for setup and backup is archaic and limits adoption to consumers that both own a PC and are comfortable with using one. The PC/Mac sync software, iTunes, software is increasingly badly named and overly cumbersome as functions have been piled upon functions over many years. iPhone OS is much easier to use than a PC or Mac, why limit its appeal artificially? Palm has shown the way with WebOS and its Palm profile cloud service.
  • Enable multitasking without compromising Apple's games abilities. iPhone OS already has limited multitasking but only for Apple's apps like the iPod and Phone apps. Jailbreakers have demonstrated that the iPhone 3GS will multitask smoothly. Multitasking would help 3rd party music apps — Pandora, Spotify, Last.fm etc — as well as instant messaging apps, social network apps and many others to be as good as their counterparts on other phones. But Apple has to make sure that multitasking does not hinder the growth of high octane gaming. There's a reason that games consoles are single tasking. If Apple does offer it, I expect  multitasking will not be offered as an upgrade for 2G or 3G iPhone owners as those models have less memory.
  • Support multiple screen sizes elegantly and without fragmenting the platform. Sooner or later Apple will increase the screen resolution of iPhone. Already, app developers have two screen sizes to worry about with iPod/iPhone vs iPad. Apple has to find a way to enable multiple screen size support without creating problems for the app guys. Otherwise, Apple's iPhone platform will become harder to develop for, and that will lead to fewer or less capable apps as developers focus on plumbing rather than innovation.
  • Lay the foundations for further iPhone OS-powered devices. Today, iPhone OS powers the iPod Touch, the iPad and the iPhone. It clearly has much more potential.


I'd love to hear your thoughts. Please add them in the comments below and I'll include the best in a follow-up post (or I may update this post, depending on what's most appropriate).

One quick note of caution – It's far too easy when Apple makes announcements to become caught up in the moment and to mistake Apple's tactics for Apple strategy. Apple plays the long game and its announcements usually fit together into a grander plan. Read my report Competing with Apple, for analysis of Apple's approach to product strategy and to provide critical background and Apple-inspired product portfolio best practices.