• About

LIVEdigitally

Still trying to understand iPhone market

Posted on May 30, 2007 by Jeremy Toeman

According to Bloomberg…

AT&T Inc. Chief Operating Officer Randall Stephenson said expectations are “too low” for Apple Inc.’s iPhone, which his phone company will start selling next month.

I’ll admit that from all reports the iPhone is going to be one impressive piece of hardware (albeit with some design flaws).  But when it comes to understanding it’s market appeal, I look at it the same way I look at a robot that transforms into a building: I don’t get it.

Here’s who won’t buy it (remember, it’s a $499/599 phone, with a locked AT&T plan):

  • “Business People” – they need their crackberries and their Treos for their mobile email.  The iPhone doesn’t have fast (enough) Internet access, doesn’t sync with Outlook, and really isn’t designed as a business device.  So with the exception of the wealthy segment who will buy it as a status item, I’m ruling out this market.
  • “High school kids” – can’t afford it (again, without rich parents).  Further, the lack of a 10-key keypad makes it difficult to send SMS messages while in class (teens do more texting than adults really imagine), since you need to look at the screen to do any kind of entry.
  • “College kids” – really can’t afford it, same problem as with high school kids.
  • “900,000 of the people on this list” – sure, people want to be on the “tell me when it’s here list” but how many of them will actually pull the trigger?  Not so many is my hunch.  I’ve been informally sampling friends, colleagues, family, people I’m interviewing for jobs, etc.  Sure, everybody’s interested, but there’s another common trends: even those who say they want one don’t seem to want the first generation phone.  It’s gonna be buggy, and even bigtime Apple fans recall the somewhat unimpressive gen-1 iPod.

So who’s left?

  • “Trendy/hipster folks with lots of money to burn” – yup, they’re ALL going to buy it.  But there aren’t 10,000,000 of them. 

Do I believe Apple has a chance to be a big player in this space? Yes.  Over time.  But in my opinion, 2008 is going to be a learning year for the company as they move quickly into production on gen-2.  My predictions for that unit:

  • Removable battery
  • 10-key or force-feedback touchscreen
  • Faster Internet access

I will admit, back in 1997 I was one fellow who didn’t envision PDAs ever needing color screens, so uhh… oops!  Let’s see if I get this one right – we’ll check back in 18 or so months to see if I have egg on my face. 

Share this:

  • Email
  • Facebook
  • LinkedIn
  • Twitter
  • Reddit

Related

Posted in Gadgets, Mobile Technology | 10 Comments
« See you at Lunch two point oh today
Burglarized Office! »

10 thoughts on “Still trying to understand iPhone market”

  1. tivoboy says:
    May 30, 2007 at 11:03 am

    Agreed. I DO think, however, that the initial sales of the product are going to be quite large, in the 1-4MM range, but NOT the 10MM that apple THINKS they can sell. (as a shareholder I sure HOPE it is 10MM, but I’m placing my bets on other more confirmed revenue streams)

    It will be adopted by Hollywood elites (okay, they will probably get them for FREE!) and the Hollywood Elites wannabees (the ones who work at Waffle House, but aspire to work somewhere on Rodeo Dr, and be “found) ca 500K

    It will be adopted by about 5% of the 30MM Mac Freaks (okay I am one of the 30MM, but not one of the 5% and am NOT buying the iphone) ca 1.5MM

    It will be purchased and adopted for about 2.0% of the children under 18 who have a cell phone and about 7% of Gen Y. So add 500K there, and 2MM.

    What do we have, about 4.5-5MM. About HALF of what apple expects. That is what I am expecting.

    I’ll buy the 2.0 version though, if it has 3G data services, removable or DUAL batteries and confirms the ability to connect a Bluetooth keyboard for email.

    It SHOULD have IMAP integration though as does MAIL.app, so working with exchange should not be an issue.

    So, in about 3.25 months, I should have a 100$ coming to me. I’ll BET that 100$ right now, that apple won’t sell 10MM in a year!

    Reply
  2. Ed Kohler says:
    May 30, 2007 at 11:13 am

    I think the SMS issue is a big one, Jeremy. Kids can 10-key text with one hand without looking at the screen. How will that work on an iPhone?

    Reply
  3. Dave Zatz says:
    May 30, 2007 at 2:13 pm

    “back in 1997 I was one fellow who didn’t envision PDAs ever needing color screens, so uhh… oops!”

    No worries, man – I was one of those guys who thought CD-ROM drives were ridiculous, that we’d never have enough data to fill discs. Doh! (Though I was one of the first people to own a DVD player.)

    I want to touch the iPhone, but without a physical keypad of some sort, I don’t want to own it. Current and imaginary phones that interest me: Blackberry Curve, Helio Ocean, Nokia N95, my Blackjack with WM6, Melissa’s Dash with 3G.

    Reply
  4. dee-rob says:
    May 30, 2007 at 8:53 pm

    I don’t know about your estimation on the business folks. I work in a thoroughly Crackberry environment with people who sneak to the bathroom now that the president has suggested “no Blackberries at staff meetings” rule.

    A huge chunk of them have their own personal phones and are drooling over the iPhone for their own, non-business use. Basically, work has accustomed them to all of the features of their Crackberry, so they can put to use something more than the freebie phone for their private use. (Plus, a couple of them have figured out they can forward messages through Outlook to a pop account and check work emails on their own equipment selectively, and release the short leash of the Blackberry.)

    Reply
  5. Avi Greengart says:
    May 31, 2007 at 11:30 am

    Jeremy,

    You’re right that it isn’t targeting the business market (no corporate email support or hard buttons) and you’re right that teens text a lot. But on everything else, I disagree. The teens who can afford one will get it anyway, and in general, you’re simply defining the market too narrowly. Don’t get me wrong, I was skeptical during the keynote ($500, no 3G, no hard buttons, non-removable battery, non-expandable memory, closed platform) but after the keynote I got to spend some time hands-on with a prototype and came away impressed.

    I have seen other iPhone-like products that are coming to market soon (at least one will be announced really soon) but in the U.S. market the iPhone will stand apart for a whole bunch of reasons. I’m working on a (client-only) report and a (free) RCR Wireless Analyst Angle column that will spell out the iPhone Impact in more detail. Look for those in a couple of weeks.

    -avi

    Reply
  6. tivoboy says:
    June 7, 2007 at 8:57 am

    Allright, I’m not going to up my target here at all, but I AM going to lower my respect for the analysts at piper jaffrey. Forgetaboutit!

    http://looprumors.com/article.php?analyst-expects-45-million-2009-iphone-sales,2670517093

    I’m JUST about ready to sell the stock, taking a bit off the table as we speak.

    Reply
  7. M Pollard says:
    July 4, 2007 at 6:19 am

    Hope you like egg. This is not Apple’s first trip around the block. They used a similar marketing strategy with the iPod and we ll know how that turned out. My best guess is that the iPhone is here to stay.

    Peace,
    mdp

    Reply
  8. Jeremy Toeman says:
    July 4, 2007 at 8:21 am

    last I checked, 700,000 does not equal 10,000,000.

    I never said it wasn’t here to stay. Wave one was good, and I believe they’ll push another 400-600K users into iPhone adoption fairly quickly. The big question is: how many follow after that…

    Reply
  9. Pingback: Jeremy Toeman’s LIVEdigitally » Blog Archive » So what’s a G1 iPhone worth now?

  10. tivoboy says:
    June 10, 2008 at 4:39 am

    It’s fun to look back at this post. 🙂

    Reply

Leave a comment Cancel reply

Your email address will not be published. Required fields are marked *

About

Jeremy Toeman is a seasoned Product leader with over 20 years experience in the convergence of digital media, mobile entertainment, social entertainment, smart TV and consumer technology. Prior ventures and projects include CNET, Viggle/Dijit/Nextguide, Sling Media, VUDU, Clicker, DivX, Rovi, Mediabolic, Boxee, and many other consumer technology companies. This blog represents his personal opinion and outlook on things.

Recent Posts

  • Back on the wagon/horse?
  • 11 Tips for Startups Pitching Big Companies
  • CES 2016: A New Role
  • Everything I Learned (So Far) Working For a Huge Company
  • And I’m Back…

Archives

Pages

  • About

Archives

  • January 2019
  • April 2016
  • January 2016
  • December 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • January 2014
  • December 2013
  • September 2013
  • August 2013
  • July 2013
  • May 2013
  • February 2013
  • January 2013
  • December 2012
  • October 2012
  • September 2012
  • August 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • June 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010
  • March 2010
  • February 2010
  • January 2010
  • December 2009
  • October 2009
  • September 2009
  • August 2009
  • July 2009
  • June 2009
  • May 2009
  • April 2009
  • March 2009
  • February 2009
  • January 2009
  • December 2008
  • November 2008
  • October 2008
  • September 2008
  • August 2008
  • July 2008
  • June 2008
  • May 2008
  • April 2008
  • March 2008
  • February 2008
  • January 2008
  • December 2007
  • November 2007
  • October 2007
  • September 2007
  • August 2007
  • July 2007
  • June 2007
  • May 2007
  • April 2007
  • March 2007
  • February 2007
  • January 2007
  • December 2006
  • November 2006
  • October 2006
  • September 2006
  • August 2006
  • July 2006
  • June 2006
  • May 2006
  • April 2006
  • March 2006
  • February 2006
  • January 2006
  • December 2005
  • November 2005
  • October 2005
  • September 2005
  • August 2005
  • July 2005
  • June 2005
  • May 2005
  • April 2005
  • March 2005
  • February 2005
  • January 2005
  • December 2004
  • November 2004
  • October 2004
  • September 2004

Categories

  • Convergence (81)
  • Gadgets (144)
  • Gaming (19)
  • General (999)
  • Guides (35)
  • LD Approved (72)
  • Marketing (23)
  • Mobile Technology (111)
  • Networking (22)
  • No/Low-tech (64)
  • Product Announcements (85)
  • Product Reviews (109)
  • That's Janky (93)
  • Travel (29)
  • Video/Music/Media (115)
  • Web/Internet (103)

WordPress

  • Log in
  • WordPress

CyberChimps WordPress Themes

© LIVEdigitally
loading Cancel
Post was not sent - check your email addresses!
Email check failed, please try again
Sorry, your blog cannot share posts by email.