Original URL: http://www.theregister.co.uk/2006/03/31/apple_iphone_speculation/

Apple 'iPhone' coming tomorrow/delayed to 2007*

*Take your pick

By Tony Smith

Posted in Phones, 31st March 2006 15:54 GMT

Comment Apple will tomorrow announce it is to enter the crowded mobile phone market. Or maybe it won't - it depends on who you talk to. Some say it's planning such a move, others that it's already well on its way to an announcement. Alternative voices claim it has had to delay its scheme for the time being.

The logic behind the move is clear-cut: phones capable of playing music are becoming increasingly popular - they're getting better at it and able to store more and more songs. Vendors with an eye on the success of iPod are promoting the function ever more strongly.

This is both a threat and an opportunity for Apple. Threat, because there's the chance they will eventually eat into or, at the very least, limit iPod market growth. Opportunity, because Apple's brand is strong enough to give it a chance of competing in the same market. As the iPod has shown, it has the design expertise and marketing savvy to come up with something that will stand out from its rivals.

According to a DigiTimes report, it's already talking to Taiwanese contract manufacturers about the production of the handset. We have to be cautious here, however, because most of the companies Apple is said to have spoken to make other products for the company too. Some of them are already producing MacBook, PowerBook and iBook laptops, for example, not to mention iPods, iPod accessories, and other Apple-branded products.

ThinkSecret, meanwhile, cites moles who claim Apple has delayed its iPhone plan because, it's alleged, it can't get some of the technology to work right. Unlike DigiTimes' "market sources", ThinkSecret cites two "independent" witnesses. They claim Apple is developing the handset from the ground up, and that it's having problems with the transceiver chip it plans to use. They also claim Apple was thinking about a Q3 roll-out, but it's now looking at 2007 at the earliest.

Meanwhile, we have analysts trumpeting Apple's immediate entry into the mobile phone market, with most attention being focused on an announcement tomorrow. In addition to Fool's Day, 1 April is the anniversary of Apple's foundation - tomorrow it's 30 years old. Surely, they say, it's got to pull something special out of the hat to mark the occasion?

But would setting itself up against Nokia, Sony Ericsson, Motorola, Samsung, LG and co make sense? CEO Steve Jobs once said, when asked if Apple was preparing a PDA, that there was no point in doing so unless it could come up with something the established players weren't doing, either from a technological standpoint or from an ease-of-use perspective.

Motorola's Rokr notwithstanding, it's questionable if Apple can really bring anything to the cellphone market beyond the iPod name - even the shiny white and black colour scheme has already been adopted, by Sony Ericsson, to name but one.

sony ericsson m600 smart phone
Hard to beat?

Quite apart from the hardware, Apple has the software to think about, and even if it's planning to buy in an OS and UI - there are plenty available - it would have a lot to do to work on the look and feel and on the apps it intends to include. Fortunately, its work for Motorola on the Rokr's incarnation of iTunes will have given it some pointers.

Much depends on whether the Apple spreadsheet cell comes up black or red. Apple doesn't need to become a player on the scale of Nokia to make money out of the scheme, though the more it invests in phone R&D, the more money it will need to make. As it's shown with the Mac, there's good money to be made offering a certain class of customer a certain class of product; you don't need to be Dell, or to have Dell's market share, to bring value to your shareholders.

The iPod experience has shown Apple it can successfully diversify beyond computers. Indeed, its brand equity has never been higher, not even in the early days. It has a name - two names if you count iPod - it can sell products on, particularly well-designed AV kit. If it has picked telephony, it has chosen a tough market to enter, and one in which failure is less likely to be tolerated than its other chosen arenas. Wall Street will not be as forgiving as it has been if the iPhone - whenever it's launched - is not an iPod but a Cube. ®