Rivals see iPhone as the one to beat in hardware, software, marketing

More than a year after arriving on the mobile/wireless scene, Apple's iPhone remains the "it" phone -- the one to beat and the one companies in the mobile device industry compare themselves to.

At this week's CTIA show, where hundreds of companies that build devices and applications or offer network services are convening, corporate leaders keep pointing out iPhone weaknesses -- from networks issues to lesser video capabilities. But they also have to keep answering why their devices can't be as special as the iPhone or its touch interface, slew of apps and functions.

They're even jealous about how it is being marketed so successfully.

Bill Plummer, vice president of go-to-market strategies for Nokia in North America, took questions from reporters and analysts about new Nokia Ovi wireless services, stressing how dozens of Nokia devices have video sharing capabilities beyond the reach of the iPhone. When a member of the press praised Nokia devices' video capabilities, Plummer promptly repeated, verbatim, the comments for all to hear.

Even for Nokia, the world's largest manufacturer of cell phones with devices now in use by 1 billion people, the iPhone is the current, and continuing, basis for comparison.

At a panel discussion sponsored by Handango, which provides software for just about every other wireless device on the market except the iPhone, several industry leaders grappled with why Apple's device has done so well. It is a mixture of Apple CEO Steve Jobs' marketing "mojo," the success of the AppStore, integrated functionality and more, the group agreed.

Mikeal Nerde, head of the accessory and developer program for Sony Ericsson, recalled the time 10 years ago when Ericsson -- then a separate company -- called its devices "terminals," a term too boring to last for long. Although the iPhone now competes in the "smartphone" market, Nerde argued that it has symbolically jumped a notch above that group. "All cell phones are smart today anyway," he said. "Yes, the iPhone is a smartphone, but it isn't that fact that makes [the] iPhone successful," added Greg Clayman, executive vice president for digital distribution and development at MTV Networks in New York. "A lot of phones do things better than iPhone." But because of its popularity, "iPhone grows the market."

From Clayman's view, the iPhone has helped generate a huge spinoff effect, with many imitators launching new devices and applications that fragment the market. For a content provider like MTV, "the iPhone is just another OS to develop to, like Android is," Clayman added.

At US retailer Best Buy, which recently began selling the iPhone alongside hundreds of other wireless devices, market fragmentation is beginning to pose sales challenges, said Mark Mosiniak, consumer technology manager at Best Buy Mobile.