Carefully select a handful of areas where you can beat the iPhone, and then promote the hell out of these features. Over-the-air calendar, contact, and email syncing through Google services should beat MobileMe hands down, if only because MobileMe costs $100 a year and Google’s services are free.
There is no better advice than this:
If your goal is to sell more smartphones than Apple, you’re going to fail. If your hope is to gain a strong foothold in the market with a sub-par device, you are mistaken. So aim high, and set your goals such that you can smugly claim victory with just a fraction of Apple’s unit sales. If Apple is BMW, you can be Porsche.
In an addenda, John admonishes:
Display, processor, RAM, storage capacity, build quality. Match — or come really close to matching — the iPhone on these criteria and then add just one thing that beats it, at least for some segment of the market. This is where there’s room for several Android handset makers to flourish. Say, one with an amazing camera. One with twice the battery life. (Or even better, combine those two, and when you make room for the bigger battery with a thicker case, use the extra room to add a larger camera sensor.) But add at least one thing that might make some iPhone owners envious — something to hang your hat on.