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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."
That most people won't spend over $400 on a phone because there aren't any phones worth spending that much on? The high end market may be small... but there's no reasoning given for not spending so much... maybe it's just because nothing (until now, IMO) has been worth the extra $$?
If you are looking for an iPod and a phone, or if the phone is a bonus, the price may be worth it to you.
I'm not familiar with the specs of the iPhone, but it isn't as simple as "this is a really expensive phone."
Except for ending slavery, the Nazis, communism, & securing American independence, war has never solved anything.
Just remember what everybody was saying about the iPod when it first came out. You may not like them, but I'd say Apple has been pretty on the mark over the last 5 years or so...
Taking guns away from the 99% gives the 1% 100% of the power.
This report fails to take into account the added capabilities of this phone. People will be much more willing to spend 300+ dollars on a phone from a company that has a impressive history in the mp3 player department. This is not just a phone. Remember that. Prof
If you look at Cingular's current plans for blackberrys, their voice and data packages start at about $80 per month. You can bet they will charge at least that for the iPhone service, if not more. even if it is just $80 a month, you are going to wind up paying $2520 over two years (including $600 for the phone), and that's before fees and taxes.
So that $600 price tag is really closer to $3000.
If Apple is really smart, they've already locked Cingular to a reasonable cell plan. They might be able to capture the high-end market with the iPhone, but without cheaper plans, they will never get the majority of people.
I'm having deja vu reading this article and comparing it to very similar articles on Slashdot (for iPod) few years back.
...and the iPhone is exactly what I want. But I'm not buying it. It's cool, but it's not $500 cool.
I'll probably buy a cheap-o model and wait. Someone let me know when there's an unlocked model for $250.
What if I do the same thing, and I do get different results?
Personally, I think the iPhone sounds cool but I will never buy one (or at least in the near future) ... There are two reasons why I dislike "do everything" or "convergence" hardware, usually the hardware is average or bad at every task and very expensive, forgetting (or losing) a phone/MP3 Player/PDA is bad but forgetting (or losing) your phone and MP3 Player and PDA is awful.
Something as small as having a touch screen to dial your phone, and display everything, means that you're either going to have to carry around a stylus (which you will probably lose) which will scratch your screen, or your screen will have fingerprints; either way it means images/videos/text will be hard to read.
Quite honestly, we don't know enough about the device yet to make any informed commentary. We're going to have to deal with six months of analysts talking out of their ass about it, and Apple fanboys/haters blathering on about how wonderful/awful it is without more than a basic overview of its functionality and no hands on UI experience. The 'specs' from Apple are a joke, and don't reveal the most basic of needed information. The details of the restrictions that will be placed on the device by Cingular are completely unknown. Until those things are known, it could go in any direction.
Anybody who talks about what is going to happen with the iPhone in certain terms at this point is an idiot.
> Of 1,800 consumers surveyed, just 21 had spent more than $400 for a cell phone.
This could simply mean that there were no phones good enough to justify the higher price tag. I mean, is there a phone with a few GB of memory, big touch screen and really good software? What kind of phone can you buy for $500 right now?
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.
My blog
Think about it. Most people who buy phones just want a phone that works. That's not the market Apple's going for. They're going for the guys that keep upgrading their expensive iPods with more expensive and newer iPods. Now, they'll get the latest "iPod" but it'll have a phone built-in too. If you look at the sales of the most expensive iPods, you'll see that there's more than enough people there to get Jobs' 1% market share that he wants out of the gates. Don't underestimate the loyalty that the Apple brand garners. It's much like Nintendo's. They'll buy whatever is the latest and greatest.
AirSpeak - http://itunes.com/apps/AirSpeak
And how much was the ipod when it first came out? Wasn't it viewed as a "high end" MP3 player compared to players like Rio etc.? How about the historical price progression of flat panel TV's?
Cutting edge products like this always start out on the low end of the demand curve at high price points. Over time, prices come down and demand picks up.
The key right now is not how many can Apple sell, but can it win the competitive battle in the Swiss-phone market so that when the time comes where price and demand are more properly aligned, it has the mindshare of the market as being the product in the market to buy.
It's just like the progression with the ipod really.
-b.
Let me give a summary of what's missing
* No downloading of songs
* No 3g
* Not possible to install external software
* Cingular only for 2 years
* No battery Replacement
* No GPS
* No finger-feel to it, can't use it under a table or without looking at it
* No MS exchange (do they want the corporate user?)
1. Apple releases iPhone 1.0 (ApplePhone after Cisco gets through with them?) in 4GB and 8GB sizes
2. Apple Fanboys will buy this version because "17 50 7074||y ru|35 4nd w1|| pwn 7h3 m4rk37 dud3!"
3. Apple will release version 2.0 with way more storage (1.8" hard disk or SSD) for half the price. This will happen in about 18 months, But not actually ship for another 4 - 6 months after it is announced. (so as not to piss off Cingular)
4. Joe Sixpack will buy that version in droves. Fanboys who have version 1.0 rush to upgrade because "17 50 7074||y ru|35 4nd w1|| pwn 7h3 m4rk37 dud3!"
5. Profit!
This is my opinion. To make sure you don't steal it, it's covered by the DMCA.
Businesses do.
Except for gadget geeks, probably 80% of the Blackberrys, Treos, etc are purchased by companies for employees or by business owners.
Apple is hoping to extend that market by taking a typical consumer/parent who is about to buy a $300 iPod anyway and convincing them spend another $200 for a phone that has unique internet capability. The reasoning behind this is that a person who is ready to by a $300 device is far more likely to spring for a $500 device.
The typical phone buyer considers the phone to be almost disposable. If you come into a store to buy a $50 RAZR after rebate, you're not going to get them to spring for $499. So Apple is taking advantage of the iPod buzz to upsell iPod consumers (the average iPod buyer has already owned 3) into iPhones.
This is sales 101. That's why half the people who show up to buy a Toyota Corolla drive away with a Prius. ("Hmm... $5000 more and I have a hybrid AND get bluetooth and that neato screen")
On the flip side, they'll get businesses to buy some too. Enterprises will stick with Blackberries because they use Exchange and like the security aspects of the device, but there are plenty of mid-level managers with purchase authority to spend $500-600.
Conformity is the jailer of freedom and enemy of growth. -JFK
Honestly, I really hope that Apple released the device without a ship date to pay attention to additional requests. No Camera flash/zoom? Maybe they'll go back and add it. No GPS? Maybe they'll release an option for GPS. Who knows, but I hope they're paying attention.
[%] Cingular Ringtones
If anyone knows how to achieve a 1% market share, it's Apple.
Apple has always cost more because they take the risk of using modern technology and open a new market. Most critics said the iPod would never sell because it was too pricey but there was a need for the product. Now with digital media players costing $200 to $300 dollars, iPod and other audio devices another $200 to $300 and smart phones again are in the $200 to $300 market it makes sense that a product that combines the three will be priced at $600. But this doesn't mean anything. How many people bought the first iPods? The iPod took off on the third Generation three years after the iPod was introduced. The phone changes the technology and will start us on a new course. The question isn't if you will or can afford the product now? It is more of a question will this product change the way we communicate? And only the fools will by the first generation especially when Flash based memory is increasing in size and the costs and functions of these devices will only increase with time.
Well, that's more than 1%...
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.
Exactly. The key complaint about the iPod was that it was too expensive. That no one would buy one when they could have a Creative r579X250 or whatever instead. i'm amazed that these complaints KEEP showing up. Apple is in the business of selling people hardware/software combos at a premium. it is WHAT THEY DO. The powerbook and ibook lines were both much more expensive than the direct competition, but they sold poorly when the software/hardware mix was diluted or uncompelling (early/mid nineties) and exceptionally well when the mix was more distinct
The iPhone will be the same way. This isn't apple fanboyism, this is grudging respect. look at the iPod. look at the cheif complaints about mobile phones in general. Not the slashdot complaints, but the complaints among the predominance of users.
1. Poor UI
2. Poor or shoddy design.
3. inability to use features on the phone, or limitations on the interoperability of those features.
Apple fixes these problems for a living. They fix them and then establish the solution at a high pricepoint, and people pay for it. No. it's not going to be unlocked, it's not going to run linux, it's probably only going to support limited software development, if any at all. But people will buy it, at least 10 million people, if not more.
According to Gizmodo and Apple VP's:
...)
The OS isn't going to be "OS X for real." It's more like a pseudo-OS X and, like the iPod, it will not have a public API and open development.
Unlike the Pocket PC which has open API's for development by third party people (like you and me
My wife bought me a Palm LifeDrive for our tenth wedding av, and it is *very* close to a perfect handheld device.
There are a few quirks (what device doesn't have those?) but it is most of the way down the road.
The screen size and general form factor is about perfect; any bigger and it'd be too clunky, any smaller and it'd be too small to read - this is my biggest complaint with smartphones like the Treo family.
I've mated it to a Garmin GPS 10 BlueTooth GPS Reciever, and it makes a great driving GPS.
Here's what I think makes for a killer handheld device:
1) Same form factor as the LifeDrive; the LD screen is awesome.
2) Lots of storage, like ~80Gb, plus the SD slot;
3) BlueTooth connectivity, especially for headsets/headphones, but the device should act as a BlueTooth hub and be able to talk to anything;
4) Wireless G;
5) A multi-band GSM phone;
6) GPS;
7) A good MP3/Media player (should be able to play all reasonable media formats)
8) Enough processor power so it can play movies without skipping, redraw GPS maps seamlessly, and remain responsive to use input at all time.
The LifeDrive is ever so close, lacking primarily the phone, the storage space, and the processor power. The iPhone *almost* gets it right too.
Eventually, somebody will build one of these, and convergence will be complete.
DG
Want to learn about race cars? Read my Book
If you've been considering upgrading to the new Treo 750, you're going to spend $500 with a two year contract. And it only comes with 64 MB of ram and a best case expansion of 2 gig which puts the price at $550 and is obviously inferior on paper.
I'm just saying Apple isn't breaking ground on cell phone price points in this category.
Platform advocacy is like choosing a favorite severely developmentally disabled child.
I think Apple isn't all that interested in 'taking over' the high-end cellphone market as much as they're interested in defining a new category of communications device that's not thought of as a cellphone.
This thing is just a first stab, and it's being aimed at the high-end cellphone market, if only because that's a market that exists, and to communicate, you've got to have people to communicate with. But perhaps Apple's betting that, though it may make phone calls, the gadget of the future won't be though of as a phone.
Posted from my Android phone. Oh, I can change this? There, that's better...
If the email client is based on Mail.app it will work w/ Exchange.
You mean the FUD campaign initiated by frightened competitors is flaring up. This story makes it seem like everyone is suddenly deciding not to buy the iPhone after "coming to their senses." Hardly the case. This thing will sell like crazy, and the fact Slashdot is posting a story saying it won't just means it will. Remember the iPod? The iPod mini? Slashdot said they'd fail.
"Sufferin' succotash."
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
I've been a Treo fan because I get phone and PDA in one package. I paid $499 for the 600 when I upgraded from a 170. My company did not pay for it; I did. Frankly, I couldn't care less about iPod capability, but I can see how it would add considerable value to the package for those whose lives revolve around music. What does it for me is cool phone with new features plus what I would call "near-robust" internet connectivity that goes way beyond Blackberry's push email technology. They've got three cool things in there, and I figure if they can get you to want two out of three, you can justify it financially and they've got a sale. They do not need to get you on all three. In terms of competing with Treo and Blackberry, they are way ahead on that point alone. They will own high end, end of story.
:-)
I hope they can get away from Cingular exclusivity as soon as possible, though I have had good luck with Cingular with a good plan, good price, and effectively unlimited minutes with rollover. It will be easy to remove the chip from my Treo and plug it into a iPhone. Given the infrastructure build on Cingular's part I understand why they did it, but I hope other carriers will make the changes necessary and find a way into this. To me it does not make marketing sense to go exclusive forever.
Given what they have done with Google Maps I think the iPhone is ripe for GPS. That would put it over the top for me. I don't use it very much, but when I do it is extremely handy. Plus it will knock the GPS-only systems out, or at least force them to reduce their sky-high prices. Navigation in a vehicle is $2K plus and the stand-alones push $1K easy.
In terms of "Apple arrogance," get over it. Around here that is the pot calling the kettle black.
How about a moderation of -1 pedantic.
As The Register points out, we should all be cheering for the iPhone because it'll kickstart competition. Finally, someone is showing RIM, Palm, Sony-Ericsson and Nokia that nobody buys smartphones because their smartphones *SUCK*.
If this brings some innovation into a pretty stale market, that's great for everyone.
And before the iPod the most a person had paid for a portable music player for many years was around $50, and usually way less. Which probably explains why the iPod was such a monumental failure. The point is that using devices that have little in common with the iPhone for the purposes of setting the price is pretty useless.
It's brainless to think that Apple will not come out with a simpler, cheaper model in six months. Everybody knows they've been working on two different phones. The surprise with this annoucement was that they brought out the smartphone first.
This makes sense (IMHO). You launch your product in a small, dedicated, technical market first and then bring out your average joe consumer market product when you've got the wrinkles ironed out.
As for that dedicated market, people like me have been waiting for a phone like this for a long LONG time. I've spent well over $1300 on smart phones in the last 9 months and have been disappointed with them all. I couldn't give a damn what it costs - I just want it to work really well.
I am not interested in articles about life extension advancements.
You know of a phone with a full-sized web browser? Pinch interface for resizing? Random access voicemail? The same ultra-thin form factor? A dock connector?
God, just thinking about the dock connector means I can plug this thing into my car for music, and continue to take phone calls during lunch, AND check my email and surf the web. All in the Subway parking lot.
"Sufferin' succotash."
I seem to recall that Jobs said it was "1% by 2008"
By 2008 several things will have happened. First, I'd anticipate that the price will have dropped by then. Second, anyone want to take a bet that the "multiyear exclusive deal" with Cingular is 2 years? Third, it will have undergone at least one revision (possibly with an "iPhone Mini" or somesuch in the middle). Finally, a lot of people will be buying new cell phones and possibly changing providers.
1% sounds extremely high to me as well, but it has to be kept in mind that they aren't talking immediately and this thing does a lot more than most smartphones.
Integrate Keynote and LaTeX
Clever signature text goes here.
If the iPhone fails commercially, Apple cancels the project, and goes back to just making computers; I'll still consider it a success if the random access voicemail becomes standard for all cell phones. Cripes, the current system just sucks so hard it's not even funny.
One time I threw a brick at a duck.
I think it's completely misleading and off-the-mark to compare the iPhone to a cell phone, at all. The only reason we're tempted to do so is because it has "Phone" in the name. But that's almost as absurd as looking at a $2000 "Apple" computer and calling it expensive because you can get an "apple" at the grocery store for 50 cents.
They had to name the product something. But the fact is, you could remove all the phone-related features from this product and it would still be worth $499. It's a PDA and a music and video player and a web browser and a digital camera. It's practically a desktop computer for all the things casual users need. And it's 10 times easier to use than most products in any category you want to put it in. I mean, you point with your damn finger. This is a fucking amazing device. It was amazing yesterday, and it will still be tomorrow.
CmdrTaco on the release of the original iPod: "Lame."
Result: Arguably, Apple's most successful product ever.
CmdrTaco on the new iPhone: "They're going to print money with this thing."
Predicted result: Sell AAPL. Now.
"Sure my Treo 650 isn't nearly as sexy. But sexy wears off in a few days and productivity and ease of use are what I care about long term."
Funny, I said something remarkably similar to my wife just a little while ago.. I write this from the couch.
I'll believe in corporations having personhood when Texas executes one... - advocate_one
This wasn't in the blog itself (http://paul.kedrosky.com/archives/2007/01/10/the_ five_bigges.html), but in one of the replies to them:
"I have zero interest in this cell phone. But I would love some version of this phone on my business desktop. Current business phones are atrocious. How to do conference calling, holding, transferring is just impossible to remember. Voicemail is a disaster. If they built something to work with PBX and the ability input contacts from Exchange then a $600 business desktop phone is probably cheap. I could see them making a lot more money in that space."
All of the disadvantages of using the iPhone as a cell phone disappear if it is targeted instead as a desk phone. Like the poster in that blog comment, while I have zero interest in the iPhone as a mobile phone (too fragile, too many cases where I need to "blind dial"), I would KILL to have that interface on my desk phone.
retrorocket.o not found, launch anyway?
First I'll admit, I pretty much am a zealot. But many people's dismissal of the product before they see or use it in person is very typical of the telephone game we call the Internet. I saw over here somebody saying this so I'll take it as fact. The truth is we still don't know very much about the product. So let's stop assuming things and think they're set in stone.
My number 1 gripe with people's assumptions is that the iPhone will be a 100% closed-product. This is bunk. Firstly, nobody official has said anything close to that. Just that development kits are not available at this time. Why is that? Let's think about it.
MacWorld is very much Apple's own personal CES. Takes place at the same time for more or less the same purpose: to introduce new products. This show is not so much about the developer because Apple already puts on a giant show just for them, WWDC.
As is widely known, Apple went to great lengths to keep the product a secret. So duh, no development kits were given to even the most tightly NDA'd partners. This thing was even kept secret to most of Apple's OWN employees. So it stands to reason they didn't want to mass-produce developments kits to have available at announcement. Beyond that, third-party software will undoubted bring up alot of flaws in the iPhone-specific parts of the OS and API. I'm sure they don't want somebody else's software mucking with the device at launch that could make it unstable or worse. That isn't to say they don't want third-party software running on it -ever-. Just not at first.
And I'm perfectly okay with that. This is a first-generation device. An Apple first generation device! These tend to be flakey. It does take time to work out the kinks and I'm okay with that too. I'm fairly sure that a dev kit will be available at or shortly after WWDC (hey, that's in June too... hmmmm). They just want time for people to use the device as they intended it.
Concerns about battery life are irrelevant at this point. We don't know how long it will really last. Could be better or worse than everybody is touting. But you know what I couldn't care less either way because I don't spend more than 5 hours per day mucking with or talking on my cell phone. I'm lucky if I can get an hour on even the most smartest of smartphones (and believe me, I've gone through alot of them). I'm willing to be most people won't either.
As for price, puh-lease. Go buy a Cingular 8525 (the super-duper 3G pda-phone that runs Windows Mobile). Aside from WM5 being the most sluggish piece of software on the planet, you'll find that it costs $585 (granted without 2yr contract). That's the same ball park. Same with the Blackjack which is $350 (again, without 2yr contract) but both phones come with negligable internal storage so add on another $100 for 2GB Micro-SD and you're still not close on storage. Some people like removable storage because you can swap cards. I have -never- owned more than 1 memory card for a format, so again, I couldn't care less. Especially considering 8GB is fairly substantial.
So I think most people's fears are overblown. The concern that could be given weight is the QWERTY touch keyboard. But that is a philosophical thing that has to be one way or another. Either you have dedicated tiny buttons or you go virtual and have a large screen. My side on this one is the large screen & virtual keyboard. That's just my preference. I have no need for tiny, fingernail splitting buttons so small that I accidentally press the wrong ones so I much prefer a keyboard on a large pretty screen that I accidentally press buttons on. Even if I wasn't such an Apple whore, I'd side with Steve on this one. Dedicated, ugly micro-keyboards suck (I'm looking at you, Blackjack). The 8525 was, for the most part, comfortable and quick to type on though.
Anyway, I'm sure the next few months will be filled with iPhone bashing as people speculate till their heart's content. I know I'll get one (I've gone through 4 different phones in the past month looking for one that doesn't suck) but the iPhone could very well disappoint me in use, but I won't know that until it comes out in June.
I just wasted your mod points! HA!
I agree, but... I am not a marketroid. What the 'troids understand and I do not, is that normal people need to "get" what it is before they will pay for it. The iPod was clearly a music player, a well-established class of device, so an abstracted brand name works. The iPhone, on the other hand, may very well be an entirely new class of device, in which case "iFoo" is a terrible branding decision.
"What hell is an iFoo?"
"Well, it's a kind of super-phone."
"But it looks like a video player."
"That's because it *is* a video player."
"...huh?"
So I think the strategy is this: call the sucker an iPhone, so that everyone on the entire planet "gets it" instantly. Apple is all about simplicity, so this makes sense. The weird gadget with no buttons is a PHONE! It's like a Treo, but 100 times cooler. And, hey.... wait a minute... it's also... it's a friggin' COMPUTER! It's a pocket Mac that makes phone calls! Whoa, dude!
Then, after everyone has had time to wrap their heads around it, declare that you could not resolve trademark disputes with Cisco, and stop calling it the iPhone. *NOW* you can rebrand it as something entirely new, because you've created the category awareness - you've got everyone knowing that it is not simply a phone, but a phone replacement. You pay off Cisco for their unwitting contribution to this guerilla marketing campaign, and you've just instantly (well, almost) established an entirely new class of consumer electronics that everyone wants before it's even available for sale, which is very, very, very difficult to do.
Apple, manufacturer of the most popular mp3 player ever made, with over 60% market share, develops a device which delivers the sales-proven features of an 8GB ipod Nano, adds widescreen video and image support, sales-proven features such as email, chat, a calendar, a fully-functional web browser, and numerous UI bells and whistles like a touch screen with smooth scrolling and zoom. Then, to ensure familiar performance for their current customers and reliable compatibility with their other hardware and software offerings, they build it around the OSX platform--one of the top two home-consumer operating systems on the market. To top it off, they integrate a quad-band GSM cell phone that will run on most international networks. Then, to ensure their desired 1% market share, they partner with one of the largest cellular service providers in the US, pricing the device at a point comparable with other bleeding-edge smartphones. An early survey shows that 1.16% of consumers (21 out of 1800) have paid over $400 for a phone. No mention of how many of these consumers also own ipods. Days after its introduction, Cingular reports being flooded with calls about the phone. This is an uncertain market?
It's worth mentioning that 21/1800=.0117 which is over 1%. Sheesh.
First article appearing on /, about the iPod: http://apple.slashdot.org/article.pl?sid=01/10/23/ 1816257
Let's see:
Apple iPod Demand Iffy
Pundits compliment, criticize iPod
Favorite excerpts from that second one:
My amazing wife - Artist, Author, Philosopher - Laurie M
I remember everyone saying how the original iPod was too expensive, feature poor, no way it was going to compete in a market that already had the Rio, etc...
The iPod redefined the market for MP3 players.
As a long time Mac user, I've been listening to people predict the demise of Apple, the failure of it's products for decades.
The iPhone may be a disaster, or it may be as disruptive a technology as the iPod. Only time will tell.
Sara
Designer, Gamer, Macgrrl in an XP World
My guess is that if this were sold as the new iPod without the phone feature but still the connectivity and $100 less, it would be "the next HOT thing". Look at this as a nice connected iPod with a phone thrown in...
(Caveat: I'm the Sr. Systems/Data Engineer for one of the top cell phone OEMs...)
Narramissic is probably a marketing wonk; the question he surveyed is skewed. While a small percentage of people buy top tier handset that retail at $400 or more, if you surveyed the question "have you spent $400 or more for BOTH your music player and your cell phone", THAT percentage would be much higher.
Devices that integrate two separate functions and allow the user to have to carry/hassle/charge one device rather than two typically initially sell at the premium the added convenience conveys to the user.
We have been manufacturing handsets that function as music players for some time now, but the US domestic carriers have attemped to channel music sales through their OTA interfacing at a premium and force the user to jump through hoops to "side-load" music for playback. When you add the iPhones ability to easily interface with existing iTunes player setups and be the ONLY alternative to playback DRM'ed iTunes music content, AND the superior design, Steve may just do better than 1`% of the market before he's through, and I'm no fan and would never purchase an Apple computer...
Honestly, I think that the naysayers just don't get it. So few people understand what it is that makes Apple so successful (including a couple past CEOs). Again, this is not a phone, it is a different kind of device that allows us to interact with our data and with eachother in new and revolutionary ways. People already pay this much for an ipod. With millions of ipods sold why would someone NOT guy the iphone at only a marginally higher price considering the incredible wealth of extra features. People are going to buy this just to get the touchscreen interface for their ipod. Even if they don't watch movies or tv on the iphone or even use it to make calls or connect to the internet people will still buy it. Once again, inserting the iphone into the present concept of Cell Phone is clearly exposes the complete lack of understand most people have for the potential market and uses the device has. The iphone redefines the Cell Phone, and yes, whether it's the iphone or not, in 10 years THIS is what your phone will look like and do (unless the telecoms can kill the concept by not comprehending the promise in the business model). Personally I think that if apple opens up the phone to third party applications (widgets) the device will be successful no matter what.
As far as I see it Apple made two mistakes here.
1. Calling it anything with "Phone" in the name (stupid stupid stupid... it isn't a phone, why call it that?)
2. Locking themselves into the "Wireless Provider" business model which for lack of a better way of saying this isn't about innovating it's about exploiting near monopoly status to make bucket loads of money at the expense of their customers and service quality. The iphone clearly relies on the availability of broadband wireless data access and wireless companies today clearly relish the opportunity to so overcharge these services that only companies and not individual customers can really think about paying for them.
Those two mistakes are going to hurt potential customer's ability to see the iphone for what it really is and prevent iphone owners from using it in the way it should really be used. People who want an awesome new ipod will go and buy a new ipod rather than the iphone because they won't perceive it as being an ipod. Those who want to use all the amazing communication features the phone offers will discover that those features are so prohibitively expensive that they can't afford to think about using them for fear of Cingular also charging for doing that. Quite honestly, I'm not concerned about the price (I'd buy one today at that price) but the astronomical costs for wireless service are going to kill people's willingness to adopt the new phone. I was hoping that Apple could use that magic ability they have had to whip the Content Providers into doing their bidding into turning the Wireless Providers towards a contructive and viable new business model for 21st century communications. But... we'll have to wait and see.
You can go ahead and join the apple naysayer club but they've introduced an astounding number of innovative new products over the years. Some have failed, others haven't, but almost all those concepts are tremendously popular today in some shape or another. In most cases Apple simply jumped the gun by a year or two. Hopefully the iphone isn't another similar case. People have been saying Apple is going to fail this year for almost two decades. It's getting ridiculous, Apple is one of the few companies that get that innovating can actually be profitable. Now if only they can clone Steve Jobs and keep him on for the next few centuries they'll be fine.
I'm hoping that Cisco and Apple settle out of court; Steve Jobs and Cisco CEO John Chambers will duel in a pay-per-view broadcast hip-hop dance competition. Proceeds will go to the One Laptop Per Child association.
"Anyone else who considered buying a iPhone having second thoughts upon hearing there will be no 3rd party apps?"
Yes... I wish I could know for sure now, and I'll go ahead and get another phone if it's truly a closed platform. There's no way I'm spending that much money on a computing device that can't run the software I want. If they allow 3rd party development as an open platform, then I'll sign over my first-born son for one of these things.
"I like systems, their application excepted", George Sand (French)
I am making a statement that does NOT in any way represent the opinion or policy of my employer, nor disclose any confidential policy information.
That being said, I sell Cingular for a living, and deal mainly with "high end" customers. In the past 48 hours, virtually every customer I've had has asked about the iPhone, whether they ultimately bought a Blackberry, a Windows phone (which sell in spite of my best efforts), or a "basic" phone. At $499 with contract, it will be the most expensive handset ever sold by Cingular in any significant volume, and expect the monthly service to be the same as a 3G PDA- probably about $50 a month on top of the voice plan. And you know what? It will sell like iPods and it will pay my bills. The two objections most people raise about premium phones are price and ease of use. The iPhone promises to solve one of those, and I would not be surprised if the exclusive agreement between Apple and Cingular solves the other. While the device price is very high, it would not surprise me if the data plan on it were discounted similar to a Blackberry. (Cingular "discounts" blackberry plans to $10 below comparable PDA plans, despite the service being much more useful and reliable.) How many people purchased the iPod Photo when it came out at the same price as the iPhone? How many parents have bought Sidekicks and Blackberries for the same teenage children they buy iPods for?
The strangest thing about the phones, in my experience, is that so far, the speculation has not seemed to slow down the rest of the smartphone market; in fact, if anything, it has had almost the opposite effect, and I can't make any sense of that. The new Windows GSM Treo has actually been selling (somewhat) despite being priced just $100 below the iPhone. The Blackberry Pearl is as popular as ever, with customers casually discussing the iPhone (and their plans to upgrade to it in a year or two) at the point of sale. Of course, the lack of 3G should hurt the iPhone, but the strange thing is, if you talk to the average prospective customer (the one in the store... not the one on slashdot) 3G just isn't compelling enough to matter. For every 3G device I sell, I deliver 10 to 15 Blackberries and GPRS phones. The technology just isn't deployed enough for people to care. Maybe once video calling hits people will start to care, but until then, watching TV and surfing the web on a 3.5" or smaller screen just doesn't justify a megabit downlink for most people.
Of the slashdotters here, though, who actually has a data phone already? Who is planning to buy an iPhone despite it's $500+ cost of entry and three figure monthly cost? (Raises hands both times) Worst part for me will be having to come up with the cash for two, because I think my sigificant other will bludgeon me with mine if I don't get her one.
Just my $.02...