No one is saying this right now, but to me the 3G iPhone is already a flop. The iPhone is Apple’s iPod for the mobile phone market. The company promised 10 million iPhones in people’s hands by 2008. No doubt, it will fall short of its predictions.
Apple has sold over 170 million iPods and that’s not even its biggest achievement in the portable music player market. With the success of the iPod, Apple has also created an industry: the online music. The success of the iPod produced the most lucrative online music store to date. The iTunes industry boasts a worldwide distribution in the excess of 600 million copies with over 4 billion songs sold.
iPod = iTunes. iPhone = MobileMe. With 3G iPhone, the iPhone 2.0 software, Apple is attempting to do another iTunes with MobileMe. MobileMe is a service that connects your iPhone to your Mac and fully sync with it using Mail, iCal, Adress Book and other applications that Mac users need on a regular basis. Just as iPod users are fully dependent on iTune, iPhone users, Apple thinks, will be fully dependent on MobileMe. For their dependency, they will pay $99/ year for 20GB of storage online.
What the App Store would probably fail in doing - getting a steady stream of cash from iPhone and iPod Touch users to flow Apple’s way - MobileMe would fulfill, and it probably will but only on a smaller scale that Apple is hoping for. In other words, it will not be an iTunes. For one thing, there will not be enough iPhones in user hands, unlike the iPod. This year, I am seeing no more than another million iPhone units sold, never mind that it will be available in 70 territories before the year ends. Next year, unless Apple changes tactics, it will be much of the same thing… Ten million iPhones in consumer hands is a pipe dream and will always be until Apple changes its tactics.
The 3G iPhone could’ve been the iPhone Nano. I am not saying 3G doesn’t make a difference because it does. GPS and A-GPS will make a huge impact as well. The problem is, like many rational individuals that have been following the Apple iPhone, I have been expecting a new iPhone design to be announced at the WWDC. Something like, oh, say, the iPhone Nano? It doesn’t have to be smartphone or full of hi-tech functionality. The iPod is one of the most crippled MP3 players for many years but it kept on selling. I want an iPhone the fits comfortably in my pocket. It should have iPod built-in just like in the current iPhone. I will need a decent camera at the back (I don’t need one in front). It should have Maps, if not GPS, 3G, WiFi is an option but not necessary.
A 4GB of storage inside a cute form factor with Apple’s signature white color casing would just be perfect for my lifestyle and, I am assuming, to tens of millions of people around the world. It should be sold unlocked at around $250 to $350 USD. A phone with a 3.2-megapixel would probably fetch a price of around $300. Throw in MMS and direct photo upload to a social networking site would be awesome. Touchscreen? Don’t really need it, though it would be interesting if they could fit in a virtual QWERTY in 2.8-inch screen.
Such a phone would sell tens of millions almost instantaneously. In only a year, Apple could take significant market share, and I’m not only talking about smartphones. They could add support for MobileMe later. Now, doesn’t this sound very reasonable?
Not everyone wants a smartphone. India and China, two emerging mobile markets, are the fastest growing cellphone market. In a very short while, these two territories will take more than a significant portion of the global cellphone industry. But don’t expect millions of Chinese and Indians to shell out $199 plus $60/month for a fancy smartphone. Oh, many will be willing to save up for a $300 iPhone Nano if they could avoid the hefty monthly. Apple has a chance after this new announcement to rethink its global strategy. It can still be a game-changer, at the cutting edge of the mobile world, but I believe it has an opportunity to add to ts portfolio and appeal to a much greater market - the market of ordinary users who care about a beatiful product but care less about state-of-the-art functionality.
June 10th, 2008 at 7:31 am
Hah! Things like the iPhone never live up to expectations. It’s nothing like the dozens of rumors said it was. You’re right, this thing could have been an iPhone Nano, just like the original could have been iPhone Classic! Different models of the iPhone would have been better, and if anything, the 3G iPhone could be seen as a downgrade even if it has GPS or any other fancy feature! By the looks of it, if Meizu releases the M8 soon (if they release it at all), it could actually be alot better than the dissapointment that is the iPhone 3G!
June 10th, 2008 at 4:36 pm
It’s the software stupid! It’s not the hardware or the megapixels of the camera. It is the ease of use, ecosystem, industry support, and integration. How many billions of dollars have been collectively spent trying to develop an iPod killer? How many touch screen cell phones have come out with touch screens and similar form factors to the iPhone and been dead on arrival? How many cell phones have the potential for as a portable game console? How many integrate with iTunes? How many phone manufacturers can challenge Garmin or TomTom in the GPS market?
Who is even discussing the Meizy M8 in the press or on Wall Street?
You really miss the potential of this phone.
June 10th, 2008 at 6:01 pm
As you said that India and china are the biggest markets, average price for cellphone sold last year in India was Rs13,000 that is $300. the average customer in india spends around Rs 2,000 for mobile service ever month that is $46. so i don’t think these iPhone prices will stop any above average customers in India from buying an iPhone and their are more than 100 million above average customers in India.
June 10th, 2008 at 11:47 pm
lal - If India is such a big market, then why did Apple not choose it among the first 22 territories?
John - I’m talking about iPhone manufacturing a non-smartphone. Something that goes for around $300 unlocked and for free with a wireless contract.
June 11th, 2008 at 12:29 am
i think ipod touch needs a price drop now and hope that i can use my dads bill pay upgrade to get this on the cheap
June 11th, 2008 at 10:21 am
Direct upload support for social networking? I can already do that on my first generation iphone (no jailbreaking required). Just shows how big of a dumbass you are.
iphone nano? redesign? No one expected this to be the announcement @ the WWDC! I What the hell have you been reading?
Apple will blow their 10 million sales figure and no one will remember your idiotic comments.
July 11th catch me at an apple store with the 3G phone.
June 11th, 2008 at 10:58 am
Shiva, go buy one and feel that iPhonesque BULGE in your pocket.
June 11th, 2008 at 7:21 pm
BrianB
My theory on India and China is there is insufficient manufacturing capacity for those countries at this point and is gives Apple additional growth there next year. I think they have all they can handle right now.
Regarding a non smartphone iPhone, there are plenty of non smart-phone music players right now and Apple’s strategy is not to be a phone manufacturer, it is to dominate mobile computing. The phone capability is really an add-on to the mobile experience.
June 13th, 2008 at 6:19 pm
I agree with you 100%.
As someone who watches and understands the phone demand market, Im sure the phone you described is exactly what millions of people would flock to buy, me being the first!
Thanks for hitting the nail on the head, I hope apple hears this cry!
June 13th, 2008 at 9:51 pm
Well first of all, 10 million phones *this year* simply isn’t going to happen. That said, that doesn’t mean apple isn’t on the right track. Most will agree that they’ve made a mediocre phone — but they’ve made an incredible PDA with mediocre media/phone capabilities. But mobile Safari . . . dear lord, it’s 10 times better than any other mobile browser. I bought a used iphone for it alone.
Understand, however, that the original ipod was a pretty mediocre mp3 player. It was firewire only, apple only, among many, many other serious flaws. This didn’t matter — all Apple needed was a single “hook”. In the ipod’s case, it was the fact that only apple had access to 1.0 inch drives (they were buying all the drives toshiba could make). Any other mp3 player at the time had to use flash memory (which meant 256 meg capacity) or 1.8 inch drives which meant the player was bulky and not something you could easily slip into your pocket when you went out to jog.
With that one small “hook”, and HUGE attention to aesthetics (yes, even at expense of function — aesthetics/marketing has always taken priority over engineering with Apple products — even you fanboys can admit it, it’s ok). Apple built a base of support, and then, over time, began to improve the flaws in their product until it had even widerspread appeal until eventually it dominated the market.
I’m relatively confident the same approach will eventually work for apple. They’ll create a base first, then work from there — offering different models for different price ranges and different types of phones, with a strong focus on aesthetics, instead of just a single smartphone. Eventually, I’m sure, they can broaden it out significantly and become a major player in the mobile market (though dominating it may be a bit tough).
All that said, remember that this is a progressive process. The first ipod didn’t even sell 2 million units in the first year. Expecting the iphone to manage 10 million is just not realistic — that doesn’t’ necessarily mean that Apple is headed down the wrong path.
August 4th, 2008 at 4:19 am
[...] think Apple has been listening to us and I believe there is something to the old and replete iPhone Nano rumors many months ago. The [...]