January 07, 2010, 5:58 PM — Powerful new smart phones are hitting the market in increasingly high numbers. Apple, RIM, Windows Mobile, Palm and Nokia handsets are being joined by a flood of Asian Android handsets, Google's Nexus One, a new Dell smart phone and more. The conventional wisdom is that all this choice will be bad for iPhone market share. But in fact, the opposite is true. Here's why.
Reason dictates that greater choice outside the iPhone universe means consumers are more likely to find exactly the set of features they're looking for, and will be more likely to choose a non-iPhone over an iPhone, which essentially has two versions, both very similar.
This line of thinking fails in all basic aspects of its premise. First, it assumes that consumers make logical choices when buying things. Second, it assumes that consumers know what they're looking for. And third, it assumes that consumers buy phones based on features or performance.
Don't be offended by this. I'm not talking about you.
If you're reading this blog post, chances are you're not "average" in terms of your electronics buying criteria. I'm talking about your mother, your uncle or your 13-year-old niece. The overwhelming majority of handset buyers -- the people who determine market share -- are non-technical, unsophisticated and don't read sites like this.
Human beings are governed by human nature, and human nature is not often rational.
The relevant aspect of this irrational human nature is something called choice paralysis. When confronted by too much choice, the consumer doesn't know what to do, and over-values a non-choice choice.
In the cell phone handset market, this is nothing new. Korean companies like Samsung, LG and others have been trying to succeed in the US market for years by offering a huge number of slightly different handsets. Consumers tend to respond to all this choice by seeking out simpler competitors. This is one of the killer features of the iPhone: There's only one or two of them at any given time.
As a gazillion new Android smart phones hit the market, pundits and Android fans will think that's good news for Android and bad news for iPhone. But that's backwards. The more choices that exist in the Android space, the more appealing the iPhone world will look.
Android fans: Please don’t accuse me of cheer-leading for iPhone. I’m making a prediction here, that iPhone will continue to dominate. And I’m explaining one reason why. It’s not about technology. It’s about human nature. The cell phone space is moving beyond the average person's capacity or willingness to comprehend. And that helps Apple.