Can anyone break the Apple and Samsung duopoly in the smartphone market?
The short answer to both questions I have posed, is yes but not right now.
If you would indulge me for a moment, I will put some context into my question here. There are many devices which are measurably better in some ways than the iPhone 4S and 5 or the Galaxy S3 and yet these have been the dominant phones for the last year or so. The question as to why has been explored at depth and is not the question I pose here. I am asking whether anyone, be it HTC, Nokia, LG or one of the major Chinese manufacturers such as Huawei or ZTE can challenge Apple and Samsung.
In order for a new platform to take hold in the market it needs to not only match its competition but be significantly better - tens of times better - than the competition in at least one key property which consumers value greatly whilst also being at least as good in all the other most valued properties. There have been many examples of this force in action. The iPod (with the help of iTunes) was far superior to its competitors in managing a users music collection. The original Blackberrys were miles ahead in terms of email management and text input, the iPhone in responsiveness and user experience.
Recently I was musing on why Windows Phone has not taken a large slice of the smartphone pie. It seems to me that whilst being a beautiful, easy to use, fast and responsive platform, it is is not significantly better in any of those ways. Nokia have made a valiant effort particularly with the Lumia 920, providing a camera that is much better than most smartphone cameras, but again, it is just not far ahead enough and it requires compromises in other areas.
That word compromise is a big problem. Smartphone consumers demand an almost impossible compromise of thin, light, compact devices with ever increasing screen real estate, better battery life, improved cameras and richer more complex ecosystems. It is simply impossible to meet expectations in all of these areas. The Nokia Lumia 920 is a great example of really trying to push the boundaries in one space - the camera - but at the expense of weight, and size. And consumers haven't bought it, metaphorically and seemingly literally.
It is becoming harder and harder to differentiate and innovate in the hardware space. Witness the recent Mobile Web Congress and how almost all high end Android devices from all manufacturers are 5" full HD screened devices with large batteries and very high resolution cameras in relatively light and slim bodies. If the rumors are true, Samsung will add themselves to the list of manufacturers going down this road. Apple might be the one company able to differentiate in a meaningful way, however, they are already one of the incumbents in the elusive stratosphere of smartphone market penetration.
If it is now almost impossible to be many times better than your competitors in hardware design, what is left for the smaller manufacturers to do to try and break the Apple, Samsung duopoly? Better marketing is definitely part of it, but it is not enough, Apple and Samsung have the budgets to out-market anyone. I see two primary possible approaches; services and software. Services might be a harder pill even than hardware given how ubiquitous Google services are today. Obviously on iOS, Apple services play a major role as well. The only company to really break into the services game on mobile recently is Amazon and they are not directly a device maker.
So what about software? Samsung have actually been making a lot of progress in this space for a few years now with the advancement of TouchWiz and the various software features launched with the Galaxy S3 such as Smart Stay, S-Beam etc etc. HTC have also tried differentiation through software and I am fascinated by what Sense 5 has to offer on the new HTC One. Software differentiation works - Nokia dominate the Windows Phone market at least in part due to their many times superior offerings to the other Windows Phone devices.
Can any device manufacturer bring software that offers many times the value to consumers than that which Apple or Samsung provides? Until they do, being good enough is nowhere near good enough. HTC, Nokia and all the others need to be much better than that whilst almost perversely Apple and Samsung can generally be just good enough to maintain their lead. We have reached a plateau in many ways for how good smartphone hardware can be and all the manufacturers now produce high end hardware which is broadly similar to each other. Smartphone software can be better but to break the duopoly it will need to be many many times better, a very difficult task.
I will boldly make a couple of predictions here. HTC have not made their new camera technology good enough to draw consumers on its own, but the HTC One as a whole does have enough innovation in its hardware and its software to succeed if HTC can help enough people to understand what Blinkfeed and Zoe are. The names could be a problem. My second prediction is that if Nokia solve the size and weight issue of their PureView technology, they will rise again to be a major player in the smartphone market. Their technology can be tens of times better than competitors, and that is how much better you have to be.