iPhone Reaction: Slick but Unwanted?

by Chris Seibold Jan 09, 2007

Apple Computer Incorporated revealed the iPhone, an unoriginal name for a very original product, just minutes ago at Macworld ‘07. The reaction of the crowd was enthusiastic after all the entire auditorium was bathed in the invisible but nearly palpable Steve Jobs Reality Distortion Field.

The iPhone not only exudes the slickness that Apple is so well known for, but surpasses any previous iteration of any Apple device. What appears to be a solitary button mated to a screen is in really a very large button (the screen) and a home key. The most immediately useful thing about the button that is also a screen is the near infinite configurability for the future. This is a product that takes a long-term view and does not limit the ability of the product to grow with time. An interesting departure for a company who many feel actively discourage upgrades to ensure sales of a never ending stream of new Macs.

Unbelievably cool design aside the iPhone is at its heart a smart phone, replicating the functions of the current crop of smart phones (an ever-changing-never-satisfying lineup). In the past phones have balanced bulk and usability against a desire for svelte size and easy portability and the result was a constant battle of tradeoff. Reading emails was easier on the bulkier models, talking more convenient on smaller models. They were trade offs users had to accept if they wanted to play in the smart phone game.

The iPhone is still a thing of compromises, but these are beautiful compromises. Seeing the iPhone and comparing it to a current smart phone is like comparing the first amphibian that crawled from the primordial muck to Aphrodite. The interesting thing is that it took evolution hundreds of millions of years to go from barely land capable creature to the Greek ideal of beauty while Apple pulled it off in just 2 and a half years.

That said the iPhone has some non-trivial problems, not with the software, not with the GUI (Steve calls one way of manipulating images “pinching.” Not as bad as “squirt” but not great) but with the concept. Apple wants the iPhone to go huge, Steve argued that cell phones sold almost a billion units last year which dwarfs the market for iPods or even computers. Thing is that the iPhone won’t, at a $499 price point, be competing in the cell phone market. The iPhone will be competing in the smart phone market, a much smaller market indeed.

The numbers that quick Google search turns up are a market at about 1.3 million units. Apple is hoping for 10 million iPhones out the door in 2008 which means the company is counting on grabbing over 5% of the smart phone market (assuming projections are correct and the smartphone market continues to increase). Not impossible, in fact likely, but one is forced to wonder if the iPhone, unless changed, will forever to be tied to smart phone market.

And it is a problem if the iPhone is always a smart phone. To get an iPhone you’ll be forced to make a two-year commitment to Cingular (which is how long Cingular’s CEO seemed to talk without ever saying anything). That means iPod fiends that want a better movie watching experience are left out in the cold, if you desire to show your pictures in a larger format it is back to the TV for you and finally if you want the functions without the connectivity, no way brother.

A problem, but not a big as the biggest problem: the iPhone does a whole bunch of stuff no one wants to do. If one lament surfaces time and time gain about the cell phone it is that people want just a frickin cell phone. They don’t want to do anything but make calls. The iPhone is an elegant solution for calling but the battery sapping baggage that comes with it might chill the appeal for people who aren’t already on the smart phone bandwagon.

All that said, the only viable outcome for the phone is to at least rule the smart phone market with more than likely bleed over to the cell phone market. As the price drops and the phone is bundled with service contracts for an ever decreasing amount of cash, iPod sales will start being impacted but they will take the sales of the Zune popular .mp3 players along for the ride. In short, Apple seems to have pulled off iPod 2.0. All hail the new gadget masters!



  • I made this point in the other thread.  It’s clearly not a cell phone for everyone.  It’s for the people who use devices like Blackberries and PDAs to make calls.

    Beeblebrox had this to say on Jan 09, 2007 Posts: 2220
  • The iPod 2.0 indeed. Although I’m not sure if we were ready for the next big point-0 version yet.

    The iPhone seems to do it all. What I’m wondering is, how well?

    The biggest let down for me was that Apple teamed up with Yahoo! Mail instead of Gmail. It’s also a shame that the device won’t be released in European and Asian markets before the end of this year and next year, respectively.

    The price point is also a bit of a bother. The company was finally losing its image of being this retailer of expensive goods. Until recently, Macs have been considered over-priced, and the same holds true for the first two generations of iPod.

    Smaran had this to say on Jan 09, 2007 Posts: 15
  • I think you’re missing the biggest part of the potential market: cell phone users who also own iPods—who will trade up in order to carry one (very cool) device.

    Marc Cheshire had this to say on Jan 09, 2007 Posts: 1
  • Unwanted? I’m harvesting a kidney as I type so I can sell it on eBay to pay for the thing.

    I’m totally that person who’s always wanted a mobile phone to just be a phone, and I currently have the closest thing to that and don’t even have a contract, I’m on VirginMobile pay as you go.

    So why am I selling my kidney? Because Apple, Incorporated has made a phone with all the extra baggage that I never wanted, but finally made one that appears to work in an intuitive and beautiful fashion. In one afternoon they converted me from someone who only has a mobile because of the perceived need for it in the 21st century, to one of those always connected people.

    woneffe had this to say on Jan 09, 2007 Posts: 2
  • Marc is right. Apple will sell more of these to iPod/phone buyers than they will to smartphone buyers.

    Chris Howard had this to say on Jan 09, 2007 Posts: 1209
  • Too early for the hand ringing. The ipod was too expensive when it first came out as well. Remember all the pundits then. Now there’s a $89 shuffle. i expect the same evolution with the iPhone as well.
    This thing is awesome. Just awesome. And with OSX as it’s base. Who knows where the developer community will take this thing.

    mcloki had this to say on Jan 09, 2007 Posts: 25
  • Chris and I were just talking about it as we were walking around. I think an interesting question is whether we will eventually see the equivalent of an iPod shuffle or iPod nano. That is a lower-end Apple phone that doesn’t have all the bells and whistles but is still a beautifully designed device. Of course, it shouldn’t just phone someone at random like the iPod shuffle. But still, surely there is also a market for a more stripped down device. Known of this takes away from the beauty of what the iPhone is….just interesting to talk about.

    Hadley Stern had this to say on Jan 09, 2007 Posts: 114
  • Marc is right. Apple will sell more of these to iPod/phone buyers than they will to smartphone buyers.


    Benji had this to say on Jan 09, 2007 Posts: 927
  • Hadley, the iPhone is the nano equivalent of the iPod.
    It’s nice that we finally have a “true” video iPod, but with 8 (or even 4) GB? wtf??
    Apple has to produce a big widescreen iPod with a HD in the high two-digit, possibly even three-digit GB.

    hessi had this to say on Jan 09, 2007 Posts: 8
  • Yeah Christian, the other thing left out on the table was the future of the iPod. Will Apple release a wide-screen iPod? How the heck could they not? But there was no mention of it which I find strange.

    Hadley Stern had this to say on Jan 09, 2007 Posts: 114
  • I’m not so sure we’ll see lower end models of the iPhone.

    What gives the iPhone it advantage is the large screen and the processor power to tie it all together by running Mac OS X. Without these features (and associated costs), I don’t see how Apple can differentiate itself from all the other phones in the market. 

    A traditional phone, regardless of how well it is designed, just wouldn’t be enough to stand out in the market.

    Scott had this to say on Jan 09, 2007 Posts: 144
  • Apple can easily differentiate itself even at the low end of the mobile phone market:  If they make one, which I’m pretty sure they will down the line, it will be the only phone that has an elegantly integrated iPod.

    tundraboy had this to say on Jan 09, 2007 Posts: 132
  • I’m probably a small segment that Apple doesn’t care about.  I bought 2 or 3 years ago a Cinuglar Siemens SX-66, basically a phone and pocket PC in one.  Thought I had nirvana.  The phone part never really worked well, so now I use a RAZR.  It still works as a PDA, but it’s a full PDA on which I use 3rd party software for my job (I’m my own tech support, though).  So Apple on this superphone-ipod-videothing has these widgets and contacts and notes, great - it lays a claim to becoming a PDA - but a bit limited.  I really like my PDA not because it runs Windows Mobile, but because it runs the drug reference and medical knowledge apps that free me from carrying 4 little books around.  Think some developer is going to make those apps for OSX just because it’s mobile?  This will be a KILLER device when it seamlessly runs Windows apps just as Leopard is maybe supposed to depending on what you believe…..

    Ah, yes….Apple will have nirvana when it makes the segregation of the OS obsolete by running M$ apps.  Not yet.  Can’t I dream?

    oskidoc had this to say on Jan 09, 2007 Posts: 8
  • But there was no mention of it which I find strange.

    It’s stranger still that there was no mention of any Mac products at MACWorld.

    Beeblebrox had this to say on Jan 09, 2007 Posts: 2220
  • I’m guessing they’ll be saving the wide screen ipod video with a hdd so that they could bundle in other features with it, perhaps turning that into the Newton with PDA and WiFi features.

    I could see them coming out with a “low end” iphone in a few years with essentially the same specs as the iphone they announced today (in typical apple fashion, as last year’s powerbook was this year’s ibook).  One design feature that could be nice is if they were to make it a clamshell with a click wheel on the outside, but of course I’m only guessing at this point.

    It’d be nice if they were to allow for video capture with that 2 mega-pixel camera though.

    Chicken2nite had this to say on Jan 09, 2007 Posts: 79
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