In response to the article How Apple Will Use The iPhone To Take Over The Wireless Industry, I’m opening by saying “take over” is a ludicrous claim. Do you have any idea the sheer volume of mobile handsets sold worldwide?
Further, there are a lot fewer people influenced by style and experience in the phone industry than in others. The Razr (aka the most successful cell phone of all time) moved 50M units in 4 years. And that’s been THE trendy phone to-date, and you can get them for next-to-nothing already.
But I’ll keep going, the turnover rate in mobile phones in the US is under two years and dropping. In countries like Hong Kong it’s hovering just over 3 months. So Apple has to not only have the “best” phone (already questionable), but they must sustain that position continuously.
Also (I’m on a roll here), don’t forget that the mobile OS industry is much less locked-down than the PC industry, where the only competition takes 5 years to put out a terrible upgrade to their OS. There are 4 other solid mobile operating systems for manufacturers to choose from, all of which allow for tremendous device flexibility.
Finally, unlike the PC industry which operates on margins so bad that a single tech support call makes a PC unprofitable, there’s plenty of money in mobile. LG, Samsung, Moto, and Nokia (to name a few) will not bend-over quite as peacefully as Compaq, Dell, Gateway, and Sony (you know Sony, right, makers of my hunk-o-laptop?) have to the competition.
Will Apple be a player in the mobile space? Definitely. Will they utterly dominate it the way they do the music space? I have to say it’s possible, but I highly doubt it.
I have to remember to write a blog post talking about domain expertise and the difference between the Web world and the device world.
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Jeremy,
“lot fewer people influenced by style and experience in the phone industry than in others”
To say that the iPhone’s innovations are only about “style” and “experience” is to miss what the iPhone UI has achieved — it makes the web actually USABLE on a portable device screen, about as close as you’re going to get to the experience of a PC screen. That’s not style — that’s pure utility. And none of the other wireless players you give so much credit to could wake themselves up long enough to figure this out. The iPhone also makes voicemail usable, by making it a visual UI, rather than an endless game of listening and button pressing.
The network issues aside, just as the iPod was the device that got people who didn’t use digital music to use it, the iPhone will get people who haven’t used the web while on the go to realize that it is now usable in a fundamental way.
I’m sure the iPhone will have plenty of competition from other handset makers, but as the others try to catch up, Apple will keep raising the bar. And if the RAZR is the high bar for innovation, I’m not sure Apple has that much to worry about just yet.
As to “taking over,” I think you’re being a bit too literal — my point was about Apple being the first to fundamentally change how the wireless carriers operate and how they serve consumers, which Apple has already achieved in some small but significant ways with AT&T. It’s going to be a hard fought battle, but no other handset makers could have dreamed of fighting it the way Apple is.
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Scott,
I hear your points, but let’s make sure we address this properly. First of all, when the iPod came out, the MP3 market was still radically immature (Sony didn’t even have an MP3 player at the time, as an example). Second, no other company to-date has introduced as seamless an integration with music (and now video) downloading and synching. These are (some of) the key factors behind the iPod’s success.
On the other hand, the iPhone comes out into a very mature cell phone market, with constant innovation. That other products aren’t as good as the iPhone is debatable (the Q, Dash, Blackjack, and N95 are all fairly impressive devices), but even if we say that the iPhone is the best right now, stating that Apple can remain ahead of ALL these companies is a much harder statement.
Regarding mobile Web – we’ll see how much that matters in the long run. I think the poor performance of the EDGE network will certainly give Windows Mobile and Blackberry users of the Verizon/Sprint networks a lot more to show off, but that’s just my hunch there.
Also, I don’t really agree that Apple is forcing the carriers’ hands in any way. The more impressive move would’ve been to introduce two units, one on GSM the other CDMA, both unlocked. THEN you’d see some interesting reactions from the industry, especially if they can move the 10mil units they are shooting for.
Finally, regarding being “too literal” – well, it’s not exactly fair to claim that, since I’m just responding to the words you wrote. If you didn’t want to set that impression, you could’ve written How Apple Will Use the iPhone to Influence the Wireless Industry…
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I am even more worried than Scott. The main point here is that there is absolutely no company except Microsoft to seriously challange Apple in mobile space.
Nokia does not have vision, it continues to dabble in little things. Nokia will not know what hit them. And it may be too late for Nokia.
Each new day that dawns Apple user interface will get more and more entrenched. And when other smaller Asian companies try to copy Apple’s user interface they will be challanged by Apple using patent and copyright laws.
Eventually Apple may (or may not) license their user interface. I think Apple will, they will not repeat the mistake of Mac. And that is how they will take over the telecom world, not through hardware but SOFTWARE.
Microsoft is not serious and is more interested in trashing iPhone and Apple than seriously thinking of competing with Apple. Only Microsoft can invent around Apple.
Monday, July 2, 2007 – 3.0.017
Stupid Is — As Stupid Does – Part XVII
Remember, in my world there are no stupid people, only human beings — which means that we are each capable of saying and doing some very marvelous things in addition to some very stupid ones. The object is to increase the former at the expense of the latter.
Since this is my web site, i guess that I have the power to make a little switch now and then — the world is NOT all about our stupidities.
Take Scott Karp’s Publishing 2.0, where he speculates, “How Apple Will Use The iPhone To Take Over The Wireless Industry.”
Jeremy Toeman responded with, “Why Apple will NOT Take Over the wireless industry.”
And Donna Bogatin piled on with, “iPhone Flash: Apple to ‘TakeOver’ Microsoft AND Google.”
Both Jeremy and Donna missed the real point, IMHO, where Scott wrote:
“From there, Apple will turn its attention to the last great battle — PCs. Once you own both an iPod and an iPhone, you’re going to look at your Windows PC and ask yourself — what am I thinking?”
Now connect that with a couple of letters that I sent to Steve Jobs back in February of ’06
02/21/2006 – Will Apple Adopt Windows…
02/25/2006 – How to Capture the DeskTop…
And we might get a small glimpse of Mr. Jobs intentions. The PC DeskTop is up for grabs — sooner or later, somebody will stake a claim — why not Steve Jobs??
The stupidity in this case is the the absence of any effort in that direction so far. The fear of Microsoft is wearing off — slowly, but surely.
And, naturally, I am here to help — in any way I can. Hey, Scott, do you want to expand on your thoughts in this area??
To be continued… naturally!!
Doug Skoglund
SandS Software, Inc.
skoglund@pdmsb.com
BTW: If you wish to discuss this matter you might check my off-line forums at http://nationalcomputerassociation.com
Doug’s points are what matter here: the PC desktop is indeed up for grabs. They key to note about the iPod is that it didn’t really take mp3 player market share; what it did was create a new segment of premium players, which so far has really only taken root in the US.
What the iPhone does best is to extend the macintosh environment as well as the iTunes/iPod ecosystem into my pocket. One should note that Apple now has over 10% market share in laptops and over 10% market share in retail. Those are strong drivers of PDAs and entertainment devices, respectively, and the iPhone does a great job at both. For me, having switched from many years of ThinkPad use to a MacBook Pro, the iPhone is the only real game in town now for classical business productivity stuff.
But yeah, as far as taking over the telcom market, the one with 1 *billion* devices worldwide, that’s not really the point here. The point is to ask: where are the net margins in the mobile business in the future? Apple has good margins on laptops, ipods, and now iphones. Plus players like Yahoo and Google have everything to win by helping. That is, over all, a pretty good position to be in.
BTW: My own review of the iPhone focuses on the lack of social networking support, see http://petersmagnusson.com
I do not know whether Doug is sarcastic or not. What I do know is that Microsoft HAS TO “multi-touch” Windows Vista in time to challange “touch” OS X. Apple is already making noises about having at least “touch” interface on MacBooks through the touchpad (not screen). I will post the URL if I can find it. It is on one of the gadget sites.
I’m not sure the iPhone does come into a “mature” market as you describe it…imho it comes more into a market full of unsatisfactory devices (for high end users anyway) and lousy end to end integration….not too different to music.
The other point re device turnover plays both ways – it allows a great device to get in fast as well….and if it is demonstrably better, with added value – eg the end to end chain – it will stay.
And for speed of innovation, on past record I’d back Apple….
Also, your price comment ignores the propensity of operators to subsidise devices, especially ones that help capture share over competitors….
I’m not sure the iPhone does come into a “mature” market as you describe it…imho it comes more into a market full of unsatisfactory devices (for high end users anyway) and lousy end to end integration….not too different to music.
The other point re device turnover plays both ways – it allows a great device to get in fast as well….and if it is demonstrably better, with added value – eg the end to end chain – it will stay.
And for speed of innovation, on past record I’d back Apple….
Also, your price comment ignores the propensity of operators to subsidise devices, especially ones that help capture share over competitors….see our views on this impact on the UK for example over here
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I think the best title for this article would have been,
apple will not take over the wireless industry, but it CERTAINLY will transform it!
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About two years from now (coincidentally when AT&T’s exclusive runs out) I believe WiMax will become widely available.
Users love Apple and Apple’s products
Users hate cell phone companies, their products, their services, their charges, their contracts, their minutes, their everything.
So what might be possible when Apple, VOIP, and WiMax come together?
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