iPhone a smash - because everyone else is stupid!

And we're in the hedge fund conspiracy

Letters Bill Ray's analysis of the economics of the handset market, and Apple's prospects of success, drew quite a crowd.

Three dozen people spontaneously agreed that today's phone user interfaces are awful. (We agree - sometimes they are). But the sight unseen "iPhone" would be better.

Good enough to succeed, though? Not a single of these correspondent challenged the economics. But where rationality was in short supply, the dreams were big and beautiful. The user interface would conquer all.

Lay off the juice, ya grumpy old curmudgeon (or are you still pre-puberty? )!

What's sickening are articles that predict the end of products that haven't even been announced and that no one know anything much about let alone if they are real.

Josh Orzech

How about articles that predict the stunning success of products that haven't been announced and that no one know anything much else about let alone if they are real.

Well, fans were happy to oblige.

Here is why I believe Apple's "iPhone" will be another amazing hit:

The iPod m's will be available on two different technologies - GSM and CDMA (I believe this is the other major tech...).

Apple will also be offering their own service at an amazing price (via T-Mobile) and will again turn the razor-blade game on it's head. For those willing to pay the penalty for moving to an Apple one-year program they will do so. For those currently in the wild, Apple's program will look like the perfect plan.

Apple will hit the market from both sides, with both wireless technologies.

Count on the smart phone version to be a VOiP phone as well, making cell minutes less and less a consern. iChat video on the smart phone will also be a unique experience.

Count on iPod mobile to surplant iPod sales to some extent, but count on iPod HD (full-screen 720p) making the device a completely different animal many will just want for pure entertainment purposes.

Mark Reschke


I think you are wrong about existing mobile phone interfaces. They all suck. They are all horrible. I am on my 8th phone in the last 3 years, desperately searching for a phone that doesn't make me want to throw it against a wall. I think I am out of phone makers to buy and try. I am currently using a Sony Erricson that is now almost four years old. No camera, usable address book and the least sucky interface out there.

I want an Apple phone, and will pay good money to have a phone that has had actual work done on the interface by competent designers, not engineers.

I suspect that Apple will create a phone that is elegant and simple with a fantastic interface and the lines will extend out the street from their stores while the clueless analysts still won't understand why it is successful.

Richard Stacpoole

Doug Petrosky has a vision, too -

The one HUGE compromise that every handset provider always makes is in limiting the functionality between your computer and your phone. Apple will not do this. Music will flow between the two devices and custom ring tones will be easily created (maybe even custom hold/ring music for callers). Contacts, calendars, email, and IM will all join together on this device. Call logs and timers will pull down, photos and video will move between and a number of other things I have never even thought of.

Tantalising.

I gotta say you are sooooooooooooooooooooooooooooo wrong. I have played with just about every music/pdas phone out there. I have a brother who works for Cingular - product development and gives me phones to test/play with. There is not a single handset manufacture from Nokia to Moto to Samsung to Sony Erricson that has a clue about human-factors and interface design. And I have to say MS smartphones and Win Mobile are a joke. The phone I have compromised on is the Samsung BlackJack. It sync great with my Macbook Pro using MissingSync. I can transfer photos that are automatically scaled down to the phones screen size, pulls MP3 from iTunes playlists, and will transfer my video and photos from the phone to my computer. The phone works with all the subscription music services and has a great 3G connection. I have 3 pop accounts set up for email. Sounds great??

What you and all of these handset makers don't get is that the user experience with these products is horrific. The BlackJack can't even connect to a stereo or a pair of headphone... there is no 1/8" jack, there is no adaptor, and you can't even stream the music. The battery last half a day, This may seem minor but it's an example of how backwards thinking these companies are. Nothing is consistent in the way menus and choosing options work. These guys don't get it even though they have been in the business for eons.

Everything is 5 or 6 clicks... apple will take all the clutter and BS and make a phone that is actually usable...

"less is more"

shaun


i am being a tad cheeky, but i think users are ready for "less is more" and no one gets more than apple does...

cheers,

Marcos New York City


its may be a question, if a iphone only with the add on of music may be a success, anytime the author seems to be paid by Zune for his unlogical consequences.

Michael Wendt

Paid by Zune. Love it.

Article is rubbish. The ups and downs of Apple and their phone are neither here nor there. Speculation for titillation. Just garbage, and YOU know it, which almost makes it an act of evil. Go and help a homeless person, anything useful - not this junk.

The Register will be gone within 2 years, probably less. It will fail, and fail badly. Why? Well its empty, isnt it, Billy?

Harry Wolf


Wow . . . you really don't like Apple do you!

You mentioned how people related their experience of opening their iPod box sickened you, why? In recent weeks I've seen countless videos on Youtube of people gleefully opening their new (insert new latest gadget here). It's what people do. Increasing people are finding joy in the details and that's a good thing.

You fail to mention that Apple need only capture about 2 or 3 percent of the market in order for the iPod Phone to be a massive success. The Worldwide Mac market stands at about that and I don't know anyone who would say that the Mac is failing, and failing badly.

James Burland

Mike Swaine - hey, Mike! - has a good point.

I kinda doubt there will be any Sony Walkman on the shelf next to Apple's phone. Think for a moment about whose shelf it will be.

Just imagine if mobile phone makers had Apple's kind of retail access. I can never find one when I'm out. You can walk for miles in our high streets and malls without seeing a single shop that sells mobile phones... [that's enough sarcasm - ed.]

Here's a chink of sanity -

I'm sitting in front of a quite probably terminally ill iMac G5 (hence the length of this mail, sorry...) and you'll likely notice a lack of capitalisation in this email 'cos the shift key is dying on my PowerBook so I'm hardly in the mood for a zealous and impassioned defence of Mr Job's products. Not only that but, looking back at your list of previous articles you quite obviously know one hell of a lot more about the mobile industry than I do. I do still find your article a little confusing though. I think there are a couple of points you are missing.

You say that one of the reasons the ipod made a big splash because when it came out it because it was so much better than the competition which is entirely correct but what you fail to note is that it's STILL much better than most of the competition. A number of friends of mine have opted to save a bit of cash by going for A N Other mp3 players and inevitably I, as their techy friend, have been called round to show them how to use them. Well, that sums it up really doesn't it? My Mum can use an iPod with no help at all and she has to be the least technical person on the planet!

The ipod also demonstrates that people will pay a premium for a desirable product. It's not a massive mark up on the competition but it is still significant and yet more apple sell more ipods than the sum of all their competitors.

So what we are potentially looking at is a phone which, while its functionality may be limited, will be very easy to use; has more storage than most of the competition; will back up all my contacts every time I plug it in to change or add music; which works with software I already have on my PC (itunes) and which has instant global brand recognition. There would be no need for any heavy subsidy from the mobile operators because people will happily pay a (small) premium to own one. Given that, I don't see why any operator would object to adding it to their product line, which seems to be the main thrust of your article.

Of course if Apple, in their infinite arrogance, don't accept the fact that to survive in the ultra competitive mobile market they're going to have to accept lower margins and this thing ends up costing consumers a few hundred quid extra then you'll probably be entirely correct. We shall have to wait and see...

Andrew Smith


Where your logic is flawed is that most mac users will have compelling reasons to buy the phone if it enhances the mac experience. The ipone doesn't have to have the same market penetration as the ipod to be a success for Apple's strategy.

Loud inflammatory headlines may get your article read but ultimately harm your credibility and that of your employer. You sound like a member of the anti-apple shill industry employed by hedge funds. Throw away your nasty ipod now so as not to be tainted by having a product from a doomed company such as apple. Keep writing this type of trash and fool yourself that you are helping mankind.

Joseph Condon

That's right, Joseph. Making rational, well-informed analysis of the phone industry harms our reputation - whereas making conspiracy theories only enhances yours.

You must spend much of your time in a pub. That, or you are a shill getting cash for an article that will, for a short time, drive down AAPL stock. Do you get paid by day traders or do you short AAPL yourself? Perhaps you are simply drunk.

Tom Condon

That's two Bitter Condons! And a packet of crisps please, barman.

"I don't know what it will look like, how well it will work, what features it will have and what features it won't have, how it will be marketed and what carriers will carry it but I do know it will fail, and fail badly."

Do you have any stock picks? How accurate is the crystal ball you use to review unreleased, unannounced products? Did you lose money betting against the widespread acceptance of the iPod?

If I'm going to use your analysis for financial gain, I must know your track record.

Alan Williams


In another few months, when Apple has redefined the mobile phone, and their stock splits again, your article will look even more stupid than it does right now.

Nunuvyer Bizniz

What's better than an iPhone? No iPhone at all, reckons Jorge -

"But creating a simple interface for a single function is one thing. Replicating that experience to manage all the functions of a mobile phone is another thing entirely."

You know, somewhere I have the feeling that Apple realises this. The whole 'design' concept is not something they come across happenstance, they're kind of big on the idea. If they design a phone, and Apple has not made one peep about it that it would, I'm taking it as a given that it will blow the socks off of anything out there on the market today.

Let me make a bold statement here: Apple is -not- going to launch an Apple phone. For the same reason you mentioned before. ROKR was a bust. A major industry player couldn't hack it. Why would Apple throw good money after bad trying to make something they're not good at in a market they have no hope of controlling. It's nowhere near Apple's core business. Cell phones are as commoditized as frozen concentrated orange juice, and just about as sexy. People dump their cell phones faster than they do their unmentionables. Apple would have to enter this market and have an extremely aggressive development cycle, pumping out a new puppie every n months. It's a bad idea. It really is. The only reason why everybody, but Apple, has been hyping an Apple phone is that Apple would make it look cool and easy to use.

The phone business is where Apple should stay the hell out. I'm pretty sure they crunched the numbers and looked at the business real closely. Why not. It would be a bad idea for them to enter that market.

Why would they run the risk of killing iPod, an immensely successful product, just to try to enter a market they don't know, their competitors don't want them in, and where the profit margin is razor thin.

I hope they don't do it. I hope Apple sticks to computers and iPod, and the whole digital lifestyle concept. They're extremely good at computers, they have shown they can create a cultural icon. They should have enough sense to know that an Apple phone is sheer hubris.

Let others have a wet dream about an Apple phone. That is why they are sheep in the first place.

Jorge


Wow, did you really "have to" sit in that pub and listen in on a conversation that was not meant for you? Hope you brought the barf bag that comes with every Zune - i.e., an actual production model "bomb". And, as an aside, Apple's packaging has elicited more positive responses than a great deal of the tech world's actual products. My mother knew that the combination of exquisitely prepared food demanded exquisite presentation as well. She was a master of both.

Can you name a product since the "Cube" that has bombed for Apple? Is it possible that you and other journalists could wait for this non-product to exist and fend for itself in the wild before calling it dead on arrival.

Most of the speculation I read about the iPod phone at least give me a chuckle. Yours is about 100 clicks below chuckle-level. Speculation and rumors are usually kind of fun, therefore, I occasionally read them. But actual substantive information that bring one to a conclusion might better serve your level of credibility.

David Garon


Wow! Finally, a sensible article. Given that you have accurately predicted the certain demise of a device that its purported manufacturer hasn't even announced or admitted to be working on, you are in the wrong calling -- as a Wall St. investor you could make a killing shorting Apple stock, or better yet, by knowing exactly what devices to avoid, you would really make a wonderful and visionary Apple CEO instead of that loser what-his-name. After all, all he does is spin a hype around products that he doesn't even mention.

P Kishor

And proving that sceptics can be just as illiterate as Apple's Angry Brigade -

how can the apple iphone fail ? it wont, because it wont be a phone ! itll be the new apple newton . ;-)

neil

Finally, this from a major manufacturer.

Bill,

Thanks for the thorough summary of what Apple is up against. The carriers will be a major hurdle. On the other hand, I believe that Apple will measure success in PC market share rather than strictly iTunes or unit sales. They will probably use the phone to sell the entire Apple ecosystem rather than just the iTunes aspect. Easy photo download, seemless contact sync, etc. It will be interesting to see if they can make it work; and how Jobs will sell the carriers on it.

If he can sell it as a mobile gateway (messaging and handling calls via laptop), then he may settle the ARPU question.

[name withheld]

We shall soon see. Or, er... not. ®

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