Friday, 12 January 2007

Has Apple done something this week…?

So Apple has finally come to market with its iPhone…and the crowd goes wild! Watching CNN in my hotel room in Porto there is blanket coverage of the launch. News sites and bloggers are falling over themselves to praise it to the heavens. Will it revolutionise the mobile world, or is it just another high-end phone?

Some thoughts:

  • Look and feel - From the pictures it looks pretty sexy, and that goes a long way as Apple proved with the iPod.

  • Functionality - No idea. It looks appealing but I’ll reserve judgment until I get my sweaty mitts on one. A phone with web browsing and an MP3 player isn’t exactly revolutionary! It’s all about the implementation. Today music functionality on most phones isn’t that intuitive whereas the iPhone will be able to exploit the installed base of iPod owners and their PC-based music store. A phone that’s compatible with your existing music is more appealing than ripping all those CDs again.

  • What no 3G? - The radio is GSM/GPRS/EDGE with WiFi. OK. Fine for browsing at home, but I live in the UK where there aren’t many EDGE deployments, so I’ll be browsing on GPRS. It’s unlikely that the WiFi element will include public hotspots, so users will be limited to sideloading at home for consumption on the move.

  • Price - Priced at $500 it will clearly put off a lot of people from day one. Also, the buying dynamics for mobile phones is different from MP3 players. How often do you replace your music player? Not often. Mobile phone? About every 18 months if you’re the kind of high-end user targeted by Apple.

  • Subsidies - Most of the mobile phones in Europe are bought by mobile operators, who then subsidise and sell on to end users. They’re unlikely to be enamoured of the idea of subsidising a device which looks like it will relegate them to a dumb-pipe role. Some will, no doubt, as they try to differentiate their service offering. Most won’t be that keen.

So the much-anticipated arrival raises many questions. Will Apple find any operators to support it? Will they even bother with the operator as a channel? Will users want to buy the phone anyway, at a substantial unsubsidised price? Will Apple become a service provider itself through MVNO deals?

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