Smartphones: there is no contest

Along with the Motorola Droid and the Palm Pre, we now have the Google Nexus One as a competitor to the iPhone.  Billshrink.com has posted a lovely chart of comparative costs of each.  I would like to add a thought or two to the analysis.

The clear advantage Apple has over the competitors is iTunes and the App Store, in which the company completely controls the distribution of content.  What everybody seems to forget is that iTunes and the App Store isn’t just for the iPhone.  I submit, ladies and gentlemen of the jury, that the iPod Touch is almost as much a smartphone competitor as the iPhone, it’s just that nobody acknowledges it.

To turn the iPod Touch into a phone, all that is need is a Skype account, a microphone and a WiFi signal (which isn’t everywhere, but is ubiquitous enough).  I have used my iPod Touch to make telephone calls several times around my house with little to no difficulty.  If Apple really wanted to blow the competition out of the water, it would introduce an app that could tether any competing smartphone for Internet access.

Granted, the total cost of ownership for an iPhone is slightly more than the competition (depending on the competition), but not prohibitively so and the user experience is much richer.  The real money for all those iPods and iPhones sold is in iTunes.  All these smartphone makers would do better to remember that, as none of them have yet introduced a viable competitor to that online store.