iYawn

So Apple finally unveiled their latest gadget, the iPhone.  Some people think it'll be the next iPod in terms of product success/market domination.

I think, not so much.

First off, a disclaimer.  I am apparently the one person in the world who doesn't think that the iPod interface is just the best thing ever.  I absolutely HATED the Macintosh interface when it first came out (now more than 20 years ago) because it guessed wrong when it thought it knew what I wanted to do.  So I don't get all "oooh and aaaah" over Apple interfaces in general.  Eye candy is nice and all, but I'm more concerned with functionality.

So at first glance, the iPhone does have an interesting interface, but what does it do that's really new?  Put another way, what does it do for $500 that you can't get with any other phone?

The answer:  run OS X.

That's it.

All of the actual functionality of the phone, marketing hype aside, is available in other phones.  Hell, my 2-year-old Treo already does everything -- EVERYTHING -- that the iPhone does.  Play videos?  Check.  Play MP3s?  Check.  Check my e-mail accounts, allow me to send e-mail and SMS messages, all with an actual QWERTY keyboard?  Check, check, check.  Browse the web, including Google maps?  Check and double-check.

Oh yeah, and my Treo will even make phone calls, too.

And I don't have to wait another six months before it's available.

And perhaps the very best feature of my current phone versus the iPhone?

I don't have to do business with Cingular to use it.  I will never, EVER do business with Cingular again, even if they are the "new AT&T" as a recent TV commercial proclaimed.  But that's perhaps a story for another blog.

Anyhow, that last bit may be fixed in the next 6 months, so I won't actually hold it against the iPhone now.  But my point is, for all the marketing hype about how revolutionary the iPhone is, it just isn't.  According to their website, "Apple reinvents the phone."  They haven't.  It's nice, but it's not a market-changer the way the iPod has been.  It certainly won't be a market dominator.  Is the phone overpriced?  Maybe a little, but show me an Apple product that isn't.  Is there anything especially wrong with the phone?  Probably not, at first glance.  Will everyone simply have to have one?  Absolutely not.

So it'll have good sales based on the Apple cachet, but in the cell phone/PDA world, it's just another option that can easily get lost in the crowd.

Comments

[Chris Snethen]

Poo poo all you want, but the device is gonna be a serious headache to other carriers, particularly Verizon. 99% of phones on the market have been neutered by carriers to the point of uselessness. Yeah, my RAZR is cool looking, but Verizon won't let me do anything with it. And their multi-media offerings are a freaking joke. The phone is capable of SO much more. Cingular appears to have left the Apple phone alone. This is a good thing. And if it catches on could transform the wireless industry.

I sent Verizon a note yesterday asking when they planned to release the iPhone. They sent back a canned response about how they're testing phones every month for compatibility. Such BS. There's no reason I shouldn't be able to walk down to Wal-Mart, pick up a phone, and activate it that day with whomever I wish. All these contracts and rebates and such for a POS phone are a waste of time.

Yeah, the Apple phone is gonna be expensive. And yeah Cingular has issues but name a cell company that doesn't. Count me among those who'll be paying $175 to say goodbye to Brand V and hello to the new phone.

[David B. Wright]

I will agree with you that locking specific phone models to specific wireless carriers is inane and definitely NOT in the consumer's best interests. It is truly a pain in the ass to have to shop for service based on who offers the phone that you want.

That's ultimately why I left Sprint PCS for AT&T back in the day, to get the coolest PDA phone that I could find at the time. I hadn't had any real issues with Sprint, other than disappointment over their service coverage on the Oregon coast, but they didn't offer the phone I wanted.

Then Cingular bought AT&T and completely and systematically screwed over the millions of customers that came with it. Anybody who had been an AT&T customer was worse than a third-class citizen after the merger.

Anyhow, after quite possibly the worst customer service experience I've ever had in my life following an account management/billing SNAFU that was completely their fault, I dropped them and went back to Sprint. It's been a very good move.

But back to the issue of device portability between carriers, cell phones are now a commodity. I just don't see how having proprietary models for specific service providers makes any business sense.

EXCEPT for the reason of the other point you made -- special device functionality. To the extent that the software on phones is standardized, it should be relatively easy for any carrier to support a given function any any hardware platform that supports it. But it's a major headache to mix and match protocols and commands across different phone vendors (and maybe even phone models) so I strongly suspect that this is what has kept the phones tied to carriers for so long.

When the phone manufacturers really standardize on all of the software infrastructure, I would think that the carriers will start to open up. Until then, don't hold your breath.

[phriedom]

Chris said: "Cingular appears to have left the Apple phone alone." But since the iPhone won't actually be available for months, I think it is premature to say that Cingular will be any better than Verizon when it comes to locking up functionality. And furthermore, since the device is hooked to their network, they can turn off features in the future.

[phriedom]

Speaking of locked functionality, it looks like iPhone won't run third party applications, and in this article the Cingular rep boasts that they are going to make it difficult for "bad guys" to unlock the handsets.

http://www.pcmag.com/article2/0,1895,2082059,00.asp [Ed. note: link added]

The "bad guys" characterization is notable because unlocking handsets is one of the six specific exceptions to the DMCA that the copyright office created.

[David B. Wright]

Per the link provided by Phriedom above, it appears that Cingular most certainly did not leave the Apple phone alone. Granted, it may just be a pompous Cingular rep spouting off about how great his company is to have made Apple do their bidding, but the specific terms of the agreement between Apple and Cingular sound anything but "consumer-friendly".

After reading that article, I'm more convinced than ever that the iPhone is going to have a minimal impact on the wireless phone industry overall.

And again, I'm not saying it's a crap phone. It may well be a great phone. But if so, it's just one of many, many great phones out there. Apple is certainly not going to singlehandedly change the face of the cell phone industry, because they have ZERO leverage with service providers. Without a network of its own, Apple absolutely needs a partnership with a provider. No provider needs a partnership with Apple.

Not exactly a position of strength for Apple to negotiate from, eh?

[Chris Snethen]

Apple is certainly not going to singlehandedly change the face of the cell phone industry, because they have ZERO leverage with service providers.

Once the phone is on the market, all Cingular (now AT&T) will have to do is slip up once, and Jobs/Apple will simply step to the microphone and say "here's the phone you could have, but your company won't let you." The reaction will be swift and immediate. There is currently no cell phone manufacturer in America willing to do that.

The iPhone is a crack in the dam. The current model of "you'll take what we give you and like it" is quickly coming to an end.

[David B. Wright]

Correction:

Cingular/AT&T can slip up as often as they want, and all Jobs/Apple would be able to do is step to the microphone and say "Here's the phone you could have, but we are contractually obligated to withhold it from your company for a number of years".

Check the link above... the Cingular/AT&T guy mentioned a multi-year exclusive contract that Apple had to sign to work with them.

Why would Apple agree to this in the first place?

Because, as I said, they have ZERO leverage in the marketplace. Without a network behind it, the iPhone is useless (well, no doubt as a PDA it kicks ass and all, but it's useless as a telephone).

I'm sure that Apple got the best deal they thought they could get. But that deal doesn't apparently particularly favor Apple -- or the consumer. I expect each carrier they talked to wanted exclusivity. And Apple had nothing to offer any carrier to get them to give that up. If they had to accept exclusivity as part of the deal, it certainly makes sense for Apple to have then selected the largest wireless company to gain access to the largest possible customer base. But make no mistake about who is calling the shots here, and by the time the exclusive period expires (I'm not sure when, but at least 2 years from now) the iPhone won't be the niftiest gadget on the market any more.

I still stand by my original assertion. Nice new phone, but not the transformational device that forever alters the cell phone industry.

[Chris Snethen]

It's a bet. Drinks at the Virginia Cafe?

Oh wait...