Never mind the cut and paste. Never mind the picture messaging, or all the other stuff that should have been in iPhone 1.0. Never mind the new payment methods that will shake up the mobile shopping marketplace. The most radical thing Apple said at the iPhone 3.0 software release was:
"The upgrade will be available for free, this summer, to all iPhone owners."
Why can't any other smart phone vendors do this? Apple's upgrade strategy helps their users and the company in a bunch of different ways. It lets users buy iPhones with some confidence, knowing that they're not going to get left behind next year. It lets developers aim at the latest platform, without having to worry about supporting the older versions of the iPhone OS. And it keeps users with Apple because they don't enter a new buying cycle, thinking of new choices and potentially churning off to the latest new thing.
Of course, Apple can do this in part because they don't make all their money off phones. Smartphone makers who don't have app stores need to keep selling new phones to generate new license fees. Apple, on the other hand, makes money off apps and off of keeping people in their ecosystem – iPhone owners are more likely to buy Macs and sign up for MobileMe, for instance. So there isn't as much pressure on Apple to sell new hardware every year as there is to keep their installed base large and buying new software.
Just saying "Apple's really a software company" sells them short in this case. Because it looks like other smart phone OS companies want to issue updates – they just can't, for some reason.
Take RIM. Like Apple, RIM controls both their hardware and their operating system. So you'd think that pushing out juicy new updates to keep BlackBerrys fresh would be relatively easy. But no; BlackBerry updates typically fall into a black hole of "carrier approval processes" for months at a time, trickling out carrier by carrier and model by model, unheralded and poorly understood.
RIM claims that these delays are inevitable when you work with carriers, but Apple works with carriers. Apple works with more than 100 carriers. They don't have this problem.
Microsoft is in an even worse state. Not only do they also say they're held up by carriers, they can't seem to hit their own development milestones, and they have trouble telling a clear story about when new versions of their software will be available.
I'm a little more forgiving of Microsoft than of RIM on this, because Microsoft has to deal with multiple versions of their OS and multiple hardware manufacturers. But you can't ignore the fact that one reason Windows Mobile has been losing steam is Microsoft's inability to update it quickly, cleanly and frequently.
Almost nobody in the U.S. owns a Nokia Symbian phone, but I've used them. The problem with upgrading Symbian devices is that they require reading tech news blogs (because Nokia doesn't tell your phone when upgrades are available), running a specialized application and plugging your phone into a PC to load the new software. It's no wonder most people don't bother.
As for Google Android, who knows? They've pushed out a couple of bug fixes which speak well of their ability to get new software to the masses. But Google hasn't been tested by a true Android 2.0 rollout yet.
MMS, turn-by-turn directions and cut and paste are all great. Other phones have had them for a while. But Apple's smooth, clean, clear upgrade process shows why the iPhone is so popular, and why it has so much momentum. It's not about the features; Apple has once again shown that they're a step ahead in terms of making software more usable.