With its new iPhone, which is scheduled for a June release, Apple intends to rock the cell phone
market much like its iPod revolutionized the music player category.
Thing is, it's a different time in consumer electronics. And a very different market.
Therefore, five potential problems Apple faces with its iPhone:
1. It's too expensive.
The eight-gigabyte iPhone model will run a cool $600. An iPod Nano with the same amount of memory costs $250, or about 60 percent less. Six hundred dollars is a whole lot of money for a music player that can only hold 2,000 songs.
Sure, it's a phone and a Web device in addition to being a music player, but most people already have cell phones. And those who are going to buy an iPod have pretty much already bought it (note the miniscule increase in iPod sales for 2006).
The point: only business users can justify $500 or $600 for a phone. And this ain't a business device. It's certainly not going to replace my Blackberry's email functionality.
The iPhone is meant to become my wife's (or my parents') next iPod. But they need more than 8 gigabytes of music storage. And if you're anything like my family, you'll be hard-pressed to justify spending so much money on a device that replicates the functionality of gadgets you already own.
On the other hand, Apple has clearly proven that it can successfully sell a product (the iPod) that costs more than most of its competitors.
2. Apple announced the iPhone way too early.
I interviewed Rob Enderle, a technology analyst for the Enderle Group out of San Jose, Calif. for Monday's Chicago Tribune column. Here's what he had to say:
"Apple almost never announces a product in advance of shipment," Enderle said. "It's starting to look like Apple is getting deperate and they're announcing things before they're ready for market."
Why is a five-month lead time an issue? Because the cell phone industry moves really fast. Far faster then the MP3 player manufacturers moved in the late 1990s.
"They're on a cycle time that runs on months, not years," said Enderle. "And they've given everyone time to duplicate a lot of the capabilities."
Especially the really cool ones, like the finger-touch-screen, that the media has been fawning over.
So don't be surprised if similar competing products -- or, at least, features -- hit the market from other manufacturers before June.
3. Battery Life
Estimates have the battery life at five hours (not sure if this is talk time, standby time, or neither). And, the battery is not replacable, meaning no spares. My iPod doesn't go five hours now. My Blackberry -- I use the new Pearl -- can go significantly longer for both talk time and standby time.
But the iPhone will be playing music, showing videos, surfing the Internet AND making calls. Five hours? Ouch.
4. Slow Network Speed
The iPhone will run on Cingulars Edge network, which averages data speeds between 75 and 135 kilobytes per second. Other companies' networks (and some of these are still being rolled out) run many times faster. Much more on this in this Information Week article.
What's the problem with this? Really slow Web browsing. Slow e-mail attachment downloads. Slow iPhone.
5. A Bigger Boon to Cingular than Apple
"I would argue the iPhone is bigger for Cingular than it is for Apple," Enderle said. "Cingular stores will use it for store traffic, but once a person gets in there, they'll down-sell it. The biggest advantage is it will drive store traffic into Cingular."
Meaning, you'll go in to look at the iPhone but walk out with any Cingular phone you want, all of which will be cheaper than the iPhone.
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What has happened this week has followed the typical pattern for Apple announcements:
1. Steve Jobs announces an exciting new product.
2. Media wets itself. (See my blog post immediately below this one.)
3. People start asking questions.
"This is what happens when Steve gets on stage," Enderle concluded. "People say 'hey this is gonna take over the world.' Then you think about it, and all of a sudden it's not that great."
You mentioned that the iPhone will never replace your Blackberry's email functionality. Perhaps you didn't see the part of the iPhone demo about email? I certainly haven't seen email completed and sent (with attachments, no less) that quickly with any Blackberry (or any smartphone for that matter).
Posted by: smack | April 09, 2007 at 02:44 AM