Where Is Apple? Nowhere and Everywhere
By KEVIN J. O'BRIEN
Published: February 14, 2010
BARCELONA — The biggest gathering in the global mobile phone industry opens Monday in Barcelona, and much of the talk will be of Apple and its groundbreaking iPhone.
Its effects will also be seen in the products of competitors. Samsung, Nokia, LG and Research In Motion will all be promoting touch-screen devices and their own software application stores, two innovations popularized by the iPhone.
In another corner of the sprawling Fira de Barcelona convention grounds in the city’s center, more than 50 small software developers, many of whom make applications for the iPhone, will praise the device’s capabilities in a specially dedicated hall called App Planet.
Just about the only company that will not be talking up Apple will be Apple.
Apple has never attended most industry events, including the Mobile World Congress. Secretive, tight-lipped and focused, Apple rarely ventures beyond its own well-staged promotions. The company has sent executives to Barcelona but has never taken center stage.
“They typically do not exhibit at non-Apple events, but we would very much like to have them join us,” said Claire Cranton, a spokeswoman for the GSM Association, the organizer of the annual Barcelona convention. “Apple products will be highly visible at the show.”
Apple will be ubiquitous during the show, which runs through Thursday. In part, its pervasiveness despite its absence is the fruit of the company’s marketing strategy, which emphasizes hip, viral advertising and word-of-mouth buzz.
After about a year of rumors and leaks, Apple introduced its iPad tablet computer last month at a theater in California jammed with journalists and Apple faithful.
While the iPad is not a mobile phone, its influence will be felt in Barcelona as well. Makers of small laptops known as netbooks, like Acer, Asus and Hewlett-Packard, will be called on to explain their plans for making their own tablets.
A host of competing iPad-like devices are expected to surface at the show.
But the Apple-centric vibe in Barcelona this year will mostly reflect the American company’s growing influence on the global mobile industry, which until the introduction of the first iPhone in 2007 had struggled to convince consumers of the benefits of wireless data.
Since then, Apple has leapfrogged its Asian rivals to become the world’s third-largest maker of smartphones, the fastest-growing part of the mobile phone market. As of December, Apple had a 16.4 percent share of the market, behind Nokia and Research In Motion, which makes the BlackBerry, according to Strategy Analytics.
But Apple is growing faster than either one.
“With the iPhone, Apple has changed the paradigm of the mobile phone industry, just as Apple changed the MP3 industry with the iPod,” said Carolina Milanesi, an analyst at Gartner, a research firm. “They have shifted the focus from the technology to the services.”
Besides hardware sales, the iPhone has given birth to a booming side business for Apple in mobile software applications. Last year, Gartner estimated consumers had spent $4.2 billion on mobile phone applications, almost all of which was spent on applications for the iPhone.
Apple divides the revenue from applications with the software’s developers, who keep 70 percent of sales. That still left Apple with about $1 billion in application sales in 2009, a figure the company, based in Cupertino, California, would not confirm and does not disclose in its financial reports.
But the new spinoff business shows no signs of slowing.
Apple has collected 133,000 applications in its application store, by far the most of any company. With mobile application sales seen rising 62 percent this year to $6.8 billion, according to Gartner, Apple’s own sales prospects are considered solid.
Besides application developers, large mobile network operators, which are Apple’s key sales agents for the iPhone, will be the company’s biggest de facto representatives in Barcelona.
The newest iPhone, the 3GS, will be part of the official display of T-Mobile, the wireless unit of Deutsche Telekom, which sells the device in 12 countries and is the exclusive seller in Germany.
Michael Hagspihl, a T-Mobile vice president in Bonn in charge of relations with cellphone makers, said the iPhone had brought T-Mobile 1.2 million new customers in Germany.
“It’s been a real success for us,” Mr. Hagspihl said. “The iPhone has brought lots of new customers to our network, and our data consumption has gone through the roof.”
Should Apple ever decide to sell the iPhone through multiple operators in the United States, T-Mobile U.S.A. would definitely be interested, Mr. Hagspihl said.
So far, AT&T Mobility has the exclusive U.S. rights for the iPhone.
But in France and Britain, Apple ended exclusive relationships and is selling the iPhone through several operators besides its original partners, France Télécom’s Orange and Telefónica’s O2.
Even after losing the exclusive selling rights in France, Orange has seen no drop in iPhone sales, said Cynthia Gordon, an Orange vice president who oversees the relationship with Apple.
“Apple has had a major impact on the overall market and a very positive impact on Orange’s business,” Ms. Gordon said.
Orange is one of Apple’s biggest operator partners, Ms. Gordon said.
The French operator sells the iPhone in 29 countries in Europe, Africa, Asia and the Middle East. Through October, Orange had sold 1.7 million iPhones, which Ms. Gordon said was more than any other operator in Europe and Africa.
IPhone sales are helping Orange offset declines in voice revenue, Ms. Gordon said.
“It has been a platform for us to build on our own sales,” she said. Besides attracting new and retaining old customers, the iPhone allowed Orange to develop the Orange TV Player, a programming application for viewing 60 TV channels on the iPhone in France.
Apple and Orange developed the application together, Ms. Gordon said.
Such possibilities for cooperation are why Algirdas Stonys, the founder of TeleSoftas, an application development company in Kaunus, Lithuania, decided to customize his real estate application for the iPhone.
TeleSoftas’s Itemizer maps houses and apartments for sale and rent via GPS, letting real estate agents identify available properties from any street corner in Europe.
The application has been selling well in Switzerland, said Mr. Stonys, 27, who will be one of the developers demonstrating the iPhone and his application in Barcelona.
TeleSoftas’s application also works on Symbian, the open-source operating system owned by Nokia. But in some European countries, that is secondary, Mr. Stonys said.
“Sixty percent of all smartphones in Switzerland being sold today are iPhones,” he said.
“You’ve got to produce for the platform out there that is selling the best.”
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