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I got an email from Andy Rubin this morning reminding me that the coming release of the Essential Phone that he will shortly be releasing to market.  This may be the biggest challenge to the iPhone’s dominance ever.  Rubin who came out of Danger, Microsoft, and Google and is credited with creating Android which eventually took the lead from iOS in mobile.  Rubin is the only guy that ever really seemed to scare Steve Jobs in recent years.  Apple is in a tenuous position because they are largely using lock in and an increasingly false sense of status to hold customers and, except for the period when Samsung’s phones were catching fire, have had trouble getting new customers.  In fact, their most recent success appears to mostly come from price increases and cost reductions.   I doubt having a key differentiator as being the most overpriced phone will be a winning strategy. However, their coming iPhone 8 10^th anniversary phone is supposed to be a world beater (but things aren’t looking good) and it better be with an estimated retail price well over $1,000.  But the Essential phone is also a technology showcase, it may have better core technology than the iPhone 8 but lag on things like screen and new technologies like iris recognition.  However, it is priced a little over half what the iPhone 8 suggesting you could buy it and a decent small drone for the price of the iPhone 8.  And given its small initial shipping volume, it will be both more elite (rare) than the iPhone 8 and far cheaper.  That could be a huge problem for Apple. Let’s talk about the battle ahead. It Comes Down To Status What the iPhone does better than anyone else is convey status.  It is kind of the Rolex of Smartphones in that the iPhone, more than any other branded phone, conveys this sense of success.  And no one in this space does it as well.  It would be like having only one premium car vendor like Lincoln or Cadillac.  But a few years back GM went cheap on Cadillac’s and folks, for a time, started to abandon that brand.  As a result, many later stayed with the Asian alternatives like Lexus and never looked back.  Part of what makes for an elite product is that it is relatively rare and the iPhone is far from rare these days.  Your kid or the guy pumping your gas likely has an iPhone just as good as yours and that is a huge problem for a phone selling at a huge premium.  It really isn’t elite, it is just expensive.  And folks really don’t like “expensive” if there is no related status being conveyed.