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Apple iPhone - To Be, or Not to Be?
An anonymous reader writes "With the Apple WWDC looming on Monday, the internet once again beats itself silly over what Steve Jobs has in store. At the most fanciful end of the scale, there's talk of the Apple iPhone, to which CNET says, 'keep on dreaming', and Gizmodo says, 'no visible evidence'. The only solid evidence of an iPhone, beyond the endless mocked-up images, is the discovery of hidden phone-related code in a recent iPod updater. Macrumors has some info on what the keynote may contain -- and there's no mention of an iPhone. So, as the rumor mill continues to grind over the weekend, let the predictions begin. Is there an Apple iPhone, or is there not?"
The time for Apple to release a cellphone was five years ago. Not because it would have been a roaring success - its success would probably have been identical then to a release today, moderate sales, sitting as an overpriced niche product next to the phone enabled Treos and the Nokia 9000 series. Maybe higher - the RAZR proved people still value aesthetics and will pay a premium for it. But what was then is not now. Today Apple has the iPod. The iPod is of critical importance to Apple's medium term future.
And the iPod is facing a competitor, the MP3 playing mobile phone. They're not that good right now, but capacities are going through the roof, so they will be soon. Indeed, get something like a Motorola V635 (which has a transflash port) and you can get a gigabyte card for it today and store a significant amount of music with you, listening to it on bluetooth headphones. iPods in this environment become a way of playing iTMS tracks, and pretty much nothing else. As long as the interfaces in these phones are "good enough", and they have enough capacity, there's no compelling reason for someone to buy a separate MP3 player.
Now, here's the problem. If Apple enters that market with a phone, they're fucked, because whether it's 2001 or 2006, their phone will be the niche - or at most "significant player amongst ten others" - product I mentioned. RAZRs are doing well, but they're not 3/4 of the market. So Apple's percentage of the MP3 player market will plummet. This has direct consequences for the long term viability of their multimedia business.
Apple's one chance at continuing to control the market the way it does today is to license the technology. If they act as a neutral party (rather than a competitor), they can continue to profit from the lion's share of the MP3 players out there, and can continue to grow and control their multimedia business.
If they sell a phone, they become a competitor. They will have problems licensing the technology, and they will become an also-ran.
Everything you're seeing that "points" towards Apple involvement in cellphones points equally at licensing schemes, and often points away from standalone phones. Nobody's (Apple or anyone else) going to make the iPod nano firmware the basis of a mobile phone operating system, but they may be willing to incorporate an iPod nano's core into a mobile phone.
Apple's one try out in this area was the ROKR. The ROKR was a stop-gap, and by all accounts Apple, not Motorola, deliberately crippled it (the 100 song limit, for example.) This should not be judged as "what Apple will do if they take licensing seriously", instead it should be seen as Apple trying to delay mass consumer acceptance of MP3 playing cellphones until the technology is good enough the things just can't be resisted any more.
No Apple cellphone will come from Apple. You'll see cellphones "with iPod(tm) technology" from a variety of manufacturers, but Apple is not in a position to make cellphones and almost certainly doesn't want to enter that particular snake pit of a market. If Apple releases a cellphone over the next few months, an Apple designed and branded unit not mostly owned by Nokia, Motorola, or some other manufacturer, I'd advise selling whatever AAPL stock you have, because it'll be their XBox: a product they'll be subsidizing for years trying to get into a market they have little experience of.
You are not alone. This is not normal. None of this is normal.
"Apple is focusing on media as its second core competency."
:-)
And that is exactly why a lot of folks are predicting the phone as the next area of Apple's influence.
Look at the Moto phones with iTunes -- they suck and were purposely kept down because Apple was afraid of folks competing with them. Even then, I heard the iTunes was running on some java stack and not integrated directly into the electronics (well...integrated more so).
I know with a simply free phone I picked up from Cingular last year, I've now replaced my Palm...not that I've had much use for it anyways. The phones do almost everything except for stylus entry that my old device did -- and the only place you see items like this are in phones (i.e., the Treo phones...which I really considered until I realized they were HUGE and I like my pocket space...I'll take entering everything from my computer except for the few times I need to enter a quick phone number or appointment with a cryptic title until I can edit and resync).
And now music is getting in these things. Do I want to carry both an iPod AND a phone? The whole thing with the Palm was that I WAS carrying both. My iPod is now relegated to my car or occasionally an airplane these days because I really hate having the batman belt. Even the shitty phones have music on them and even though a good deal are locked and require a purchase from the cellular companys site -- people seem to be willing to pay the $2 - $4 for a song that is a quarter the quality of the similar iTunes download (and as I've found out, generally expire after a few months -- I just wanted to test out the interface because I had been helping a friend convert his tunes to ringtones -- he has a sizable audience and wanted to get 'optimized' files out with 'customized' content before his label did so he had a negotiating block as RTs weren't even considered when he signed on 10 years ago -- they count them as 'club sales' like Columbia House where the artist makes practically nothing).
Back to the point, Apple introduces a phone that replaces my current one AND my iPod -- I'm picking it up. There are only so many gadgets I'm carrying and if I have to make a choice, its my phone...and the more I talk to others, they feel the same way. Luckily Apple seems to be the kind of company that knows how to focus on the essentials which for me would be, Phone, Music, Phone Book, Calendar and a Java Interface to load up Salling Clicker so that I can use my remote to connect to my Mac across the room -- and leave the Java unrestricted so that we can add what we need WHEN we need it and nothing more. Most phones have this stuff, but navigating the interface to use them sucks...
We will see convergence, so does Apple want to be ahead of the curve like the iPod(but not way too ahead like the Newton -- which pretty much introduced us to what we have today) or does it want to be behind the curve like it has on too many other items...
Ok -- in the time I've been called away from my desk a few times now, this is probably redundant and should be modded accordingly
I think Apple's experience with the (Motorola, was it?) last third party phone proved that it would be a risky proposition at best. Most people I heard griping about it were slamming how few songs it would hold. Add more flash memory, or a hard drive, and your power consumptioon would go up, so there goes your stand by time on the phone half of the device, especially if you spend a lot of time listening to music, or conversely, talking on the phone. Both functions take a lotta power. Put a big honkin' battery in there to make up for it, and you'd need an auxilliary power pack on yer belt!
I don't think it'll work. I do think tho, that the references to a phone in the iPod updates may refer to a bluetooth connectivity with the iPod. Didn't see what the references were, tho, so I could be off base.
I think this is just pure speculation. Fun speculation, to be sure, but speculation nevertheless.
Bring on the Reality Distortion Field! Its affect on me must be fading...
"Money is truthful. If a man speaks of his honor, make him pay cash." Notebooks of Lazarus Long, Robert A. Heinlein
I work as a Director of Technology and I find it interesting that my Apple reps have been courting me so much these last few months. So much that they have not only given me a free pass to WWDC, but have invited me to sit in the VIP section at Jobs' keynote and to attend a special reception for IT professionals Monday evening.
Now, it may be that Apple always does this sort of thing to convince people like me to buy Macs. And we surely know that the Mac Pro will debut (as well as 10.5). But the full court press that I am getting suggests that this year's WWDC is as much about people like me as it is developers. Does this indicate anything about the content of Jobs' keynote? Probably not. But the treatment that I am receiving when I have almost nothing to do with development suggests that they are trying to garner as much interest as possible, and as much buy-in as possible.
Cell phones are one of the worst designed consumer electronics out there. Of anything, I wish Apple would choose to do a phone next, providing they can make a little money on it.