iPhone Faces Uncertain Market

48 hours have passed since Steve Jobs's MacWorld keynote and the reality distortion field is beginning to wear off. Lists of the drawbacks of the announced iPhone are sprouting all over the Net (and there is the occasional defense by true believers). Now narramissic writes, "The iPhone may be poised to take over the high-end cell phone market, but is it a market worth taking? Not if an InStat survey from July is any indication: Of 1,800 consumers surveyed, just 21 had spent more than $400 for a cell phone. Prices for the iPhone, admittedly more of a handheld computer than a cell phone, start at $499 for the 4G-byte version with a required two-year contract with Cingular. So, is Apple pricing it right? Analysts quoted in this article seem to think Apple's going to have a hard time getting the 1% of market share that Jobs called for."

Comments

Success will come a little later

[pieterh]

Apple tend to launch a product and then fork it into a product family that covers a nice price range. This format could expand to include a hard drive and become a real portable hand-held, the new Newton. It could also shrink to become a simpler phone. Expect the actual release model in June to have much more memory, and better battery life.

The biggest problem with all smartphones today is that UI design is generally terrible. If Apple can get this right, and make a family of phones that react quickly and are fun to use, they will sell a lot of them.

Further, it seems to me, phone or not, that this is what the iPod will look like in 2 years time. The wheel is no longer needed, and this format makes video a pleasant reality.

So it's quite possible that the "phone" part of this product is less significant than the large-screen, no-button, Apple-inside format.

The iPhone is just a smokescreen

[Dzimas]

Here's a bold prediction: The iPhone that Apple Inc. introduced yesterday won't be a runaway success. It will never sell tens of millions of units, nor is it intended to. In reality, it's a flagship product intended to define the high-end of Apple's new ultraportable media computer lineup. Let's face it, the classic iPod has reached the end of its natural life. Even the most recent fifth generation iPods are showing their age. The screen is small, the OS extremely limited. To make things worse, Apple's competition has been nipping at their heels with rapidly improving devices such as SanDisk's tiny Sansa flash players and the Creative Zen Vision:M.

The iPod line needed a reboot, and the iPhone was splashiest way to do it. In fact, this device is the logical evolution of the Newton MessagePad. Think about it. Apple realized that boring contact lists, calendars and handwriting recognition won't encourage the Unwashed Masses to adopt portable computers. People are far more media-centric than that.

The rejuvenated iPod lineup will tempt you with music, movies and games, while offering an addictive combination of go-anywhere Wi-Fi browsing and email. And you can bet that Apple is planning to open up third-party development as quickly as possible.

As for the iPhone device, the bleak reality is that it is slightly larger than a 5G iPod. Too big to slip into the pocket of my jeans, which means it's too large to use as my everyday phone. My hard drive-equipped iPod usually lives in a messenger bag on my shoulder or in a jacket pocket, simply because it's too bulky to function as an "everywhere" communications accessory. I wouldn't be willing to carry something as large or expensive as the iPhone with me everywhere I go. I'd look like a dork with my calculator on a belt clip. Besides, mobile phones are expensive enough to begin with and many people (especially students) will balk at the idea of committing to a 2 year $1000+ mobile voice/data/voicemail contract after shelling out $599 for the iPhone itself.

No, the real magic will happen when Apple releases a $299 version of this device - the next generation iPod - that retains everything but the GSM + EDGE phone technology. At that point, the iPod will be perfectly positioned to become everyone's favorite teeny-tiny ultraportable computer.

They need to sell 10M iPhones in 2008

[Spyky]

In order to meet their 1% goal they need to sell 10M phones in 2008 (the first full year they are available). That is directly paraphrased from Steve Jobs during the keynote. It may be hard to sell a $500 to $600 phone in those quantities. But Steve Jobs himself said they are going to continue developing iPhones (3G...). Does anyone really think that this is the only phone Apple will be selling for all of 2008?

I think Apple will sell a lot more than 10 million iPhones in 2008 when they add the iPhone nano to their lineup a year from now. I predict the iPhone nano will be physically smalelr and drop some of the pricey "smart phone" features of it's big brother. But it will still have the great interface and importantly, style, of it's big brother. Probably will come in colors too. $200-$300. That will fly off the shelves.

You heard it here first.

Spyky

Set the wayback machine to 2001...

[douglips]

Imagine if you will a time not so long ago - October, 2001. The iPod is introduced.

Let's see:
Apple iPod Demand Iffy
Pundits compliment, criticize iPod

Favorite excerpts from that second one:

Writing for The New York Times, Matt Richtel quoted one analyst who said that iPod's exclusivity to the Mac (at least for now) severely limits its audience....

CNet News.com writer Ian Fried quoted analysts who knocked the iPod's high price and timing given the poor consumer market right now...

Writing for ABCNews.com, Paul Eng suggested that the $399 iPod may face an uphill battle. Eng quoted an analyst who said that the iPod is priced at the upper end of the MP3 market, and another who suggested that the digital music market needs better definition so that consumers can understand what makes the iPod different from other MP3 products.