iPhone Reaction: Slick but Unwanted?
Apple Computer Incorporated revealed the iPhone, an unoriginal name for a very original product, just minutes ago at Macworld ‘07. The reaction of the crowd was enthusiastic after all the entire auditorium was bathed in the invisible but nearly palpable Steve Jobs Reality Distortion Field.
The iPhone not only exudes the slickness that Apple is so well known for, but surpasses any previous iteration of any Apple device. What appears to be a solitary button mated to a screen is in really a very large button (the screen) and a home key. The most immediately useful thing about the button that is also a screen is the near infinite configurability for the future. This is a product that takes a long-term view and does not limit the ability of the product to grow with time. An interesting departure for a company who many feel actively discourage upgrades to ensure sales of a never ending stream of new Macs.
Unbelievably cool design aside the iPhone is at its heart a smart phone, replicating the functions of the current crop of smart phones (an ever-changing-never-satisfying lineup). In the past phones have balanced bulk and usability against a desire for svelte size and easy portability and the result was a constant battle of tradeoff. Reading emails was easier on the bulkier models, talking more convenient on smaller models. They were trade offs users had to accept if they wanted to play in the smart phone game.
The iPhone is still a thing of compromises, but these are beautiful compromises. Seeing the iPhone and comparing it to a current smart phone is like comparing the first amphibian that crawled from the primordial muck to Aphrodite. The interesting thing is that it took evolution hundreds of millions of years to go from barely land capable creature to the Greek ideal of beauty while Apple pulled it off in just 2 and a half years.
That said the iPhone has some non-trivial problems, not with the software, not with the GUI (Steve calls one way of manipulating images “pinching.” Not as bad as “squirt” but not great) but with the concept. Apple wants the iPhone to go huge, Steve argued that cell phones sold almost a billion units last year which dwarfs the market for iPods or even computers. Thing is that the iPhone won’t, at a $499 price point, be competing in the cell phone market. The iPhone will be competing in the smart phone market, a much smaller market indeed.
The numbers that quick Google search turns up are a market at about 1.3 million units. Apple is hoping for 10 million iPhones out the door in 2008 which means the company is counting on grabbing over 5% of the smart phone market (assuming projections are correct and the smartphone market continues to increase). Not impossible, in fact likely, but one is forced to wonder if the iPhone, unless changed, will forever to be tied to smart phone market.
And it is a problem if the iPhone is always a smart phone. To get an iPhone you’ll be forced to make a two-year commitment to Cingular (which is how long Cingular’s CEO seemed to talk without ever saying anything). That means iPod fiends that want a better movie watching experience are left out in the cold, if you desire to show your pictures in a larger format it is back to the TV for you and finally if you want the functions without the connectivity, no way brother.
A problem, but not a big as the biggest problem: the iPhone does a whole bunch of stuff no one wants to do. If one lament surfaces time and time gain about the cell phone it is that people want just a frickin cell phone. They don’t want to do anything but make calls. The iPhone is an elegant solution for calling but the battery sapping baggage that comes with it might chill the appeal for people who aren’t already on the smart phone bandwagon.
All that said, the only viable outcome for the phone is to at least rule the smart phone market with more than likely bleed over to the cell phone market. As the price drops and the phone is bundled with service contracts for an ever decreasing amount of cash, iPod sales will start being impacted but they will take the sales of the Zune popular .mp3 players along for the ride. In short, Apple seems to have pulled off iPod 2.0. All hail the new gadget masters!
del.icio.us
Digg
Facebook
Slashdot
StumbleUpon
Comments
Thanks, Ben. I was actually reading a gossip from Ars Technica/AppleInsider about the matter after I posted.
What I really want the iPhone to support are the officially licensed developers and Apple’s i-Apps to boot. That would be just awesome!
As for the CPU being an ARM vice x86, that would make perfect sense since the tightly packed caverns of the iPhone does not allow any x86 CPU with their nominal TDP or thermal envelopes to survive in an extended talk time, let alone battery consumption.
I am a bit curious why Apple not chosen one of the newer PPC designs from Freescale or IBM. Perhaps Apple turned their backs permanently away from PPC as paybacks for their lack of innovations in the Mac PPC era. Well, doesn’t hurt me no more…
Apple is developing their own standard with the iphone. They don’t need everyone to buy it, they just need to develop a reputation for it as a quality product, so that over the coming years as the price goes down and it becomes affordable to more and more people, they would choose the Apple experience over competing products with their crippled features.
If I were to guess, the next compelling upgrade for the desktops would be quad core processors, which aren’t quite ready yet I would assume. I’m not sure how they’ll be doing it, since if they were to update the iMac before the Mac Pro, they could cripple Mac Pro sales as the cheaper product would have an equal number of cores.
Meanwhile there might not be a compelling change in power capabilities when switching up to 4 or 8 cores (which is what the AMD camp has been saying, that this is the new Gigahertz race) so they might be holding off on the hardware upgrade until they can properly integrate it with the coming Leopard, so that any new hardware would be optimized for the new software.
The fact that they left out any announcement of iLife or iWork ‘07 seems kind of odd, but I suppose they’re holding out to make it run native in Leopard when that gets released. Makes sense I guess.
I think the Mac mini was a surprise to most of us - it represents that Apple is at least somewhat willing to compete in the mid and lower price point markets aka… the 99% of the market Breeble points out.
How do I sell the Mac mini to others interested in switching to Apple? I just say the OS is superior. The mini by itself is just not interesting.
How would Apple convince cellphone buyers that their mid-lowend iPhone is worth purchasing? They couldn’t because they’d have to scale down the platform too much and not offer the user experience to a level that makes it compelling choice. Many of the handsets today are loss-leaders… Apple has never ever lost money on hardware. Would they ever? I just don’t think it will ever be a company strategy but they have surprised before.
Well they way it works at least with most of the phone companys is this:
Phone company makes a phone to work on a specific network. They package whatver crap they can make in a week (that’s what it seams like)... They sell it to the carriers. These carriers then sell the phones bundled with contracts of some kind to thier customers. There designed to make money on the service, NOT the hardware. So THIS IS WHY Apple needed a network teamed up with them. They now have a network and a communications standard in which to use, AT&T. They sell these machines to Phone Company for said amount. Phone company sells them to us with said discount for activating or getting a renewal. They take into account our 2 year agreement and adjust monthly prices to make the discount on hardware (phone) bundle in with the service.
And that’s how it works.
Can Apple make a me-too product? Sure. But everyone else already does this. You want to BRAND your IMAGE to everyone as a leader in TECH you make the DAMN BEST PHONE in the world. You just became the Rolls Royce of consumer products and your $599 Mini looks like a jewel compared to a $3999 Dell.
The question isn’t “Can Apple make a low end phone?” - the question is “why would they?” Because you want them to?
Well, duh. Unlike you, I don’t devote my life to what’s best for Apple, a giant greedy corporation that could really give two craps that you worship them so uncritically.
I have a low-end phone that makes calls, takes pictures, and does a few other things. I would LOVE for Apple to make a competitor that does the same things and is easier to use. I’m not sure why you’re actually criticizing me for that (well, I do know why, but I’m being rhetorical.)
You seem to think they are incapable of making such a device at an affordable price. I don’t. That is why you are inadvertently (certainly not on purpose) slamming them while attempting to defend their every move as the right one.
I think the Mac mini was a surprise to most of us
Well given the total lack of confidence you guys have in Apple delivering a solid low-end product at an affordable (relatively) price, it’s no wonder.
I see what your saying Beeb. But Lexus came out with the flagship first, Infinity also. From a corporate standpoint you release your best and brightest, garner as much attention to your products. Then IF consumers demand a less expensive product with some features that’s when you develop and release a less expensive model (ES300, G20).
Is this the only phone we’ll see from Apple? That’s up to the consumer market to decide. If sales take off and nothing but good things are said except the price point Apple may release a less expensive, easy to use phone. Personally I was hoping for a 2gb model just so I can justify purchasing one (thinking it would hit a lower price point).
Go back through Cingular’s pricing schedule which is about as hard to read as cave drawings this item will be priced at $399-$349 with new activation for the 4gb model. The phone appeals to everyone because it has everything, but it’s only attainable by those who feel the price is worth the device. However it has one really good thing going for it and that is software updates to add or fix features.
Hopefully this will fix another problem and that’s all those old phones filling up our landfills with mercury. IE: More poeple hang onto it for longer than the average 1.5 years.
So it’s my wish as well for Apple to bring out a less expensive model. Maybe in a year when the hype is down and everyone and their brother has one the price will be cheaper. Till then I’ll stick with my 1.5hr talk time, gotta charge it every night NEC.
Now monkeys I think we can all really agree: here’s hoping for an iPhone nano!
Then IF consumers demand a less expensive product
Given the fact, and even Jobs pointed this out, that the Nano is by far the most popular iPod, one would think that Apple would have anticipated this market already. And they almost certainly have, which means they probably are developing or have developed a lower-end phone (despite Scott’s insistence that such a thing is impossible).
So the “smart business move” is doing what they always do, exploiting the Mac fans for maximum profit early on, and then unveiling the lower-end model for the masses at some later date.
They’d serve customers better, IMO, by releasing such a device simultaneously with the high-end model even if it cannibalizes some of the higher-end device sales. Ultimately, that’s better for everyone AND Apple.
“Well, duh. Unlike you, I don’t devote my life to what’s best for Apple, a giant greedy corporation that could really give two craps that you worship them so uncritically.”
I’d LOVE to see Apple make a tablet, but I certainly don’t expect them to release one just because *I* want one. Rumor has it that the iPhone is the only fruit of Apple’s tablet research we’ll see for several years. Yet Apple could easily create a tablet version of the MacBook Pro - and there would be a line of Apple devotees waiting to buy one. Why haven’t they?
I honesty think that Jobs want’s to make great products and if the technology or the UI isn’t ready, it stays on the drawing board. It’s a Win Win situation for everyone.
Do you think that Microsoft really cares about their customers? Tablet PC sales are poor at best and most are sold to medical and industrial markets who will pay top dollar for whatever incremental improvement Microsoft and their partners put out. Do you think Microsoft resurrected IE development out of the goodness of it’s heart? How about better standards support for the industry? No, it was in direct response to loosing market-share to FireFox. It’s the same with many of the features in Vista vs OS X.
As a Mac software developer, I’m very disappointed that Apple decided to close the iPhone to third party developers. It’s a huge opportunity. I’ve already contacted Apple and was very critical of it’s decision on this issue. Yet, I realize that *I’m* not a typical user and Apple isn’t going to change it’s mind just because *I* want it to.
“Well given the total lack of confidence you guys have in Apple delivering a solid low-end product at an affordable (relatively) price, it’s no wonder.”
What’s your definition of solid and relatively affordable?
In my opinion, The “Apple” of traditional cell phones is Sony Ericsson. I love my T610 and must have seen a dozen of them at WWDC 2005. It’s very easy to use, syncs effortlessly with my Mac and has a simple, clean design.
Had I wanted to buy a new non-smart phone, I would have upgraded to a K790a from Sony Ericsson. However, they’re not available from any carrier in the US, so I’d have to buy it unlocked for $499. Why? Because most people aren’t willing to pay more for better design unless it’s revolutionary. The only remotely interesting SE phone Cingular actually carries is a W810 for $149.99 with a plan from Cingular. After $149.99 rebates, the phone is free. In other words, they have to give it away before anyone will buy it.
After the failure of the Motorola ROKR, does this look like a market segment you’d like to get into?
“... which means they probably are developing or have developed a lower-end phone (despite Scott’s insistence that such a thing is impossible).”
I didn’t say it was impossible, I asked the question, “Why would they?”
Take away the big touch screen, animated UI and cool internet apps - it’s no longer revolutionary, regardless of how well it’s designed. Sure, you can drop the storage to 1GB, make the screen a bit smaller, etc., but that would still probably put in the $349.00 range, even with a plan from Cingular.
“... they’d serve customers better, IMO, by releasing such a device simultaneously with the high-end model even if it cannibalizes some of the higher-end device sales.”
Do you have any idea what it takes to bring even a single product like the iPhone to market - let alone two or three of them? The Mini was released over two years after the original iPod - the Nano 21 months later. By selling millions and millions of iPods, Apple’s literally helps drive down the cost and size of components in the market. This doesn’t happen overnight. And we’re not talking about an incremental improvement to the iPod, the iPhone is a whole new platform that’s running a mobile version of Mac OS X. What if it doesn’t sell? Releasing two flops would be a serious hit to Apple’s bottom line.
I’d be very surprised if we saw a iPhone with less storage and a slightly smaller form-factor before Q2 2008.
“Well, duh. Unlike you, I don’t devote my life to what’s best for Apple, a giant greedy corporation that could really give two craps that you worship them so uncritically.”
Little played out and unless I’m blind, deaf and dumb I haven’t seen it. Case in point my brother in-laws ipod nano broke this past novmeber (screen cracked). Its been out of warranty for a year. I told him to call Apple and see about getting it fixed, he constantly said “It’s gonna cost too much, I’ll just save up and buy another one”. Well Christmas EVE I had him call, he did and in 10mins he was as suprised as the rest of the family (not me however) that they were going to send a NEW one out ASAP (probably a refurbished model but non-the-less a working one). He did tell them it was out of warranty but they had is registration info and knew that allready.
Point is, he saved cash and from now on will never buy anything but an Apple product. In fact he was looking at a MacBook for school after the call.
Greedy? Not in this case. I’ve also heard of and seen 2 expamples myself with out of date products getting free support. Greedy companies don’t do this kind of customer service. Don’t beleive me? Call ANYONE ELSE about an out of warranty product.
Scott, that’s one of the best posts I’ve seen on here.
Yet Apple could easily create a tablet version of the MacBook Pro - and there would be a line of Apple devotees waiting to buy one. Why haven’t they?
I was going to try and write a rebuttal of Beeblebrox’s idea that Apple’s main strategy is exploiting the Mac fans for maximum profit early on, and then unveiling the lower-end model for the masses at some later date. But this is a much more concise argument than I would have made, and one which will require a proper rebuttal, not just a barrage of insults and accusations in response… [cue…]
I do disagree with one point you make:
Take away the big touch screen, animated UI and cool internet apps - [an apple phone]‘s no longer revolutionary, regardless of how well it’s designed.
I would personally say that any well-designed phone, without all the extra garbage, would be sincerely revolutionary just for being GOOD. This would be a low-end iPhone without bells and whistles, without DAP cabailities: one that would complement an iPod, not compete with it.
That would be a product that the real masses would benefit from. And that would be revolutionary.
Yet Apple could easily create a tablet version of the MacBook Pro - and there would be a line of Apple devotees waiting to buy one. Why haven’t they?
I don’t know. Probably because unlike the iPhone, after the devotees have bought theirs there’d be no other market for it. Consider how much MORE expensive than the Macbook Pro a tablet would necessarily have to be, and how limited the Mac’s market already is. As Mac fans have repeatedly celebrated, the tablet is a washout (for some reason) as a product as it is.
Do you think that Microsoft really cares about their customers?
Nope. Again, in MY world (ie the real one) there is not just MS and Apple, in which one must choose sides and in which criticizing Apple automatically makes one a MS defender.
I don’t like MS any more than Apple. They are both giant greedy monopolists whose bottom line trumps all other decisions.
I didn’t say it was impossible
Yes you did: Do you have any idea what it takes to bring even a single product like the iPhone to market - let alone two or three of them? The Mini was released over two years after the original iPod - the Nano 21 months later. By selling millions and millions of iPods, Apple’s literally helps drive down the cost and size of components in the market. This doesn’t happen overnight. And we’re not talking about an incremental improvement to the iPod, the iPhone is a whole new platform that’s running a mobile version of Mac OS X.
In other words, you don’t think it is possible for them to make a low-end phone that is easy to use and less expensive than the one they released, a product that, as Ben says, would benefit everyone and not just the rich elite. You don’t think it is possible for them to do what every other cell phone company in the world has managed to accomplish.
I disagree. I think they are quite capable of such a feat.
What’s your definition of solid and relatively affordable?
Probably the same as yours. My phone cost $20 with a two year commitment. It makes calls and takes pictures and has never crashed. But it could use some easier-to-use software and some UI improvements. Why this is some unfathomable impossibility to you, let alone from a company you worship, is beyond me.
Little played out and unless I’m blind, deaf and dumb I haven’t seen it.
Uh huh.