Apple and iPhone... they know there's a demand

[Toe]

According to a recent article:

Apple said that cell phones and the wireless Internet are used by people in the same market segment in which the iPod is popular.

So... if they know that people who like iPods like smart phones, why is Steve so rock-headed about an Apple phone?

I don't want no stupid Motorola iTunes phone. Motorola makes crappy phones, and I don't care if my phone plays music. I want my phone to do what my PowerBook can do... as in, run OS X. Even if it costs about the same. I can't see paying $900 for a Symbian PDA phone, but I'd pay even more for an BlueTooth OS X phone with a video port on it.

 

[apple2991]

According to a recent article:So... if they know that people who like iPods like smart phones, why is Steve so rock-headed about an Apple phone?

I don't want no stupid Motorola iTunes phone. Motorola makes crappy phones, and I don't care if my phone plays music. I want my phone to do what my PowerBook can do... as in, run OS X. Even if it costs about the same. I can't see paying $900 for a Symbian PDA phone, but I'd pay even more for an BlueTooth OS X phone with a video port on it.

A neat idea for sure, but could they really sell 10 million of them?

Additionally, this is a HIGHLY critical point in time for Apple. They are finally regaining press, mindshare, and maybe even some of that beloved marketshare, as well as creating and moving into brand new markets. Everything they do is highly scrutinized and speculated. The iPod was relatively easy--there wasn't much competition in that market, so Apple didn't necessarily have any standards by which they had to abide; that is, in comparison the the cell phone market: an over-saturated, super-competitive market where companies have to finagle deals not only with Telecom companies, but with the government as well.

And I think we'd mostly all like to see technology become increasingly mobile, easy to use, and inexpensive. You have to look at logistics, though:

Would most people buy a $900 phone (or, heck, even a $350 phone)? No.

Is there a large market for portable video, any sort of general video standard, and could Apple overcome the legal ramifications of it even if there were? No, no, and maybe.

Remember the Newton. A fantastic little product, lightyears ahead of its time--problem is, lightyears ahead of it's time can also mean lightyears ahead of consumer's time. If Apple is going to make a bid for either the portable video or the cell phone market, they are going to go all in or not at all, which means the timing and execution have to be perfect.

And what if their cell phones suck? Let's be honest here, Apple has made their fair share of clunkers in their time. Not all Apple products are perfect, especially in the early stages. What if there is a design flaw (say a heating issue or something) or a production problem? The cell phone market certainly isn't going to sit around waiting for them to perfect the product, Apple will simply get a bad reputation, which might then taint iPod sales--the strongest thing Apple has going for themselves right now. Many consumers are already hesitant about purchasing an Apple product, what if they hear that Apple's new handheld/portable device overheats and fails? If that fails, how different could it be from the iPod?

It's too risky, and I think Apple wants to ride the iPod wave for quite a while.

 

[economist]

iPhone - let motorola do it...

A neat idea for sure, but could they really sell 10 million of them?
...
It's too risky, and I think Apple wants to ride the iPod wave for quite a while.

I agree.
iPod is a device that came into the market and gave users a much better and more stylish way of doing something. Let's face it... most innovation in mobile music has been in DRM/style/capacity and battery life. Therefore all you have to do is balance the above 4 variables well and you get a platform that you can launch and build upon.

With the mobile industry, first the capabilities of the cell phone are not constant, over years there is a huge variation in capabilities. Add to that networks and the constant state of flux the protocols are in... i.e. GSM/TDMA/CDMA/WCDMA/CDMA2000/TD-SCDMA etc. and on the data side GPRS/EDGE/1xRTT/EV-DO etc. The problem quickly becomes that of a matrix with lots of cells... Which market do you go after? Your segment that initially liked your iPod products are segregated across that matrix. So Apple would have to address every piece of the technology to garner the biggest bang for its buck. If that is not enough your device needs to work with all possible network equipment, supplied by Nokia/Ericsson/Motorola/Nortel etc. All in all a huge learning curve, with a guarantee that the first few devices are going to suck (look at the history of all mobile phone providers).

Also, Apple is a company that likes to own the entire Value chain.. and currently the value appropriation in the mobile industry is extremely complex... You got the chip vendors/the protocol providers (CDMA etc.)/the carriers all of who want a piece of the pie and the device manufacturer is the one that gets the least value appropriated to themselves, as the buyer power completely resides with the carriers. So, I think apple should just stick to propogating its iTunes music store with Motorola's cell phones.

or

Crazy idea: go out and buy t-mobile or become and MVNO and set up an exclusive deal with deutche telecom. This would fit into apple's strategy... owning the entire value chain...

Isn't guessing fun.

Cheers