Apple COO Discusses iPhone Exclusivity, SDK, and Unlocking

[Otaviano]

Um, like I said, CDMA makes up about 10-15% of the global mobile market. Most phone makers have determined that the BENEFIT of CDMA customers outweighs the COST of creating an additional model. U.S., Canada. South Korea, and Latin American countries make up the bulk of CDMA users. CDMA users have money too, unlike a large percentage of the GSM market, which is in developing countries, that can only afford to buy the cheapest of phones (low-profit margins).

Ignoring hundreds of millions of customers usually isn't a good thing.

But, like I already said, Apple will probably end up OK because of their approach.

However, on the topic of ignoring hundreds of millions of customers, Apple will need to be careful in China if they take their current approach there. With both of the large firms having hundreds of millions of subscribers, they do they will miss out on a massive amount of potential customers.

10 to 15% would indicate that the remaining 90 or 85% percent are GSM. Why bother making a CDMA version when the few countries using CDMA also have GSM networks available?

I think the very fact that Apple, a very American centric company, chose to release the phone in the United States as a GSM phone goes a long way into saying what the real value of CDMA is.

The notion what CDMA users have money, and GSM is the standard in 3rd world countries is pretty laughable.

 

[arn]

http://www.apple.com/quicktime/qtv/goldmansachs08/

quicktime stream of the talk

arn

 

[iBlue]

Still, he states that Apple is "not married to any business model" and instead, they're "married to ... shipping the best phones in the world."

What a load of turd they expect us to swallow. They're married to their profits and behaving like increasingly greedy twunts. I understand, they need profit, blah blah blah, and I love apple products, don't get me wrong, but they are fast becoming SO FULL OF CRAP it makes me ill. I hate the way the do business these days.

 

[joeshell383]

The notion what CDMA users have money, and GSM is the standard in 3rd world countries is pretty laughable.

Regardless of impact, the statement has truth to it.

 

[milo]

http://www.apple.com/quicktime/qtv/goldmansachs08/

quicktime stream of the talk

arn

Thanks. Anyone know if there's a transcript somewhere?

Once again, apple mentioned the "10 million" and once again different sites are reporting different things.

As for the single carrier thing, while I can see why people are pissed about it, going exclusive for a while was a huge bargaining chip for apple.

With an exclusive, apple has something to offer in exchange for compromises on the part of the carrier. If they weren't offering an exclusive, when they asked for the carrier to make changes on their end, they just would have been laughed at.

Some people seem to forget that eight months ago, apple had never sold a phone before. Is it really such a dumb move for them to start out with a single carrier and get their foot in the door with a solid product that they can actually have some control over, instead of trying to launch with everyone and probably have some issues?

Now that they've established that they're a serious player, they can call the shots and make the demands when the exclusivity expires and they start making deals with other carriers. Seems like a brilliant plan to me.


EDIT: Found the "10 million" quote, he reiterates "in 2008" and not by the end of 2008 (which sites like appleinsider have effed up AGAIN).

"We are right on track where we want to be. We are...the...the 4 million units that we've sold over the first 200 days gives us confidence that we can achieve 10 million units in 2008. I know we've said that before; you've heard us say that before, but I want to make that perfectly clear--that we're--we believe that we are right on track for that."

 

[jouster]

I'd love to hear what other features carriers might have a hard time implementing ... dialing perhaps?

I think visual voicemail would be the answer Apple would give.

 

[xUKHCx]

http://www.apple.com/quicktime/qtv/goldmansachs08/

quicktime stream of the talk

arn

Cheers for the link, it is quite an interesting discussion, still only 18 minutes in.

Regardless of impact, the statement has truth to it.

Oh please you are not telling me the buying power of 15% global market is greater than 85% global market.

I think visual voicemail would be the answer Apple would give.

Apparently the newly announced 02 deal in Ireland doesn't support visual voicalmail. see here

*** Visual voicemail is not currently supported.

 

[Can]

Regardless of impact, the statement has truth to it.

Oh mommy please I can´t afford a iPhone, you see I´m living in a third world GSM country...


Err?

 

[Mackan]

Well, Apple brought it onto themselves. Like someone said, offer the iPhone without contract, unlocked, please. That would easily sell 10 million extra iPhones in a 6 month period or so. Stop the current exclusivity, and revenue sharing buisness model.

They sell loads of iPhones that people unlock, export to other countries, but those users have no warranty on their phone. So yes, I understand why that guy still have a smile on his face...

 

[Padraig]

Oh mommy please I can´t afford a iPhone, you see I´m living in a third world GSM country...
Err?

The should make an charity commercial about this. I can imagine it now..... a German child wishing that he lived in the CDMA affluence belt of Latin America.

 

[eastcoastsurfer]

Well, Apple brought it onto themselves. Like someone said, offer the iPhone without contract, unlocked, please. That would easily sell 10 million extra iPhones in a 6 month period or so. Stop the current exclusivity, and revenue sharing buisness model.

They sell loads of iPhones that people unlock, export to other countries, but those users have no warranty on their phone. So yes, I understand why that guy still have a smile on his face...

I think Apple originally underestimated the demand for the iPhone and overestimated their ability to pull new people from their current cell phone carrier to a new carrier. Knowing what they know now, they might have made a different decision about being locked to a single carrier.

 

[Otaviano]

I think visual voicemail would be the answer Apple would give.

I said "other" ... the post I was replying to implied that it would be impossible for carriers to implement all the radical new features of the iPhone. Then in the next paragraph he mentioned the one and only feature that needs implementing. So I replied asking what other features might be hard for carriers to implement.

Regardless of impact, the statement has truth to it.

right....

 

[sjo]

They get the upfront sale of the iPhone plus monthly kickbacks from att. Passing on the kickbacks, that will go until a person stops using an iphone (and how many of you owners are about to do that) could mean that they would be passing up years and years of kickbacks.

They're making money hand over fist, they could care less.

again, a us centric view. your argument might well be true there. however, the sales have been pretty low abroad and global iphone profit would probably be higher if they sold them unlocked.

 

[brucku]

I think generation 2 should offer a "World" phone version. Thats unlocked and works on any GSM network. It would cost more, but maybe they could throw in an extra accessory that will help justify some of the added value -

like an extended battery, or an external battery add-on. Or something apple can think of that we haven't.

 

[Smith288]

I think visual voicemail would be the answer Apple would give.

I dont see how visual vm is a blocker. Couldnt they just map the voicemail button to the carriers voicemail number if they dont handle visual voicemail instead of loading up the visual app?

 

[monkeyandy]

Just my $0.02

No one seems to have mentioned it yet so I will. I love the fact that he said "that the upcoming SDK will "broaden the platform more, to the point where the only limit will be people’s imagination."

Sounds like the SDK will allow for some really interesting applications in the future. I bought an iPod Touch at Christmas and love it. It really is like having a mini handheld Mac. It has endless possibilities of running all sorts of portable software.

I have seen some of the amazing apps that have been released for jail-broken iPods/iPhones. I love the one with the on-screen guitar you can play, or the one where you can control your Mac on-screen mouse using the touch screen. I can envisage loads of great apps coming out over time. From basic word processing apps to little music sequencers to great little games all utilizing multi-touch and the movement actuator.

This is why I purchased a Touch. Because I imagine it will develop into a great little portable handheld computer over time (fingers crossed). I also envisage that, yes, you will have to download apps and install from iTunes but some will be free and some you will have to purchase. At the moment you can easily download the single of the week, podcasts and occasional videos for free and buy pretty much everything else. Why can this not happen with software for the iPod/iPhone platform?

I don't post often but felt the need to today because this sounds very exciting. What do you guys think?

 

[Otaviano]

I dont see how visual vm is a blocker. Couldnt they just map the voicemail button to the carriers voicemail number if they dont handle visual voicemail instead of loading up the visual app?

The phone is actually ready to do this, *5005*86*phonenumber# (where “phonenumber” is the number you dial to get to your voicemail) then press the Call button.

The phone is very much a standard GSM phone, anything you can't do is probably crippled by Apple. For example the EDGE settings are removed from the phone. Yet the menu exists, all you need to make it visible.

 

[Stella]

Not to mention they would actually hit their ten million mark, actually probably blow right past it.



The iPhone is a GSM phone, think you meant to say CDMA. A stupid argument on his behalf, perhaps if your narrow minded and think strictly of the American market. However GSM is the more or less the global standard. They would be fine releasing it globally and unlocked. There is no reason to make a CDMA version.

No , I really did mean GSM.

Apple dont have to offer a CDMA phone, that will benefit very few customers world wide.

( My wording wasn't too good )
Overall, GSM v CDMA iPhone: GSM benefits more than CDMA. Keep the GSM iPhone, don't bother with a CDMA version.

 

[twoodcc]

seems interesting. i guess we'll get the real low-down next week

 

[dgdosen]

iPod Touch

wifi platform -

Introduce the SDK
Introduce 3rd party apps
Introduce a new form factor - 7 inch screen, same depth, 1024 x 768
resolution
Support HD content

Throw a leather casing around it and call it a new and improved newton...

 

[codalo]

very interesting

Where I live in the US AT&T service is VERY poor, so won't move to the iPhone until they are available on Tmobile, even tho my wife is begging for an iPhone. But I did spring for a Touch and love the platform and can't wait to see the 2nd Gen Mobile WiFi platform that he implies.

My dream device, a 6-8" mac-air, but not a clamshell, the screen is still the input device but I could BT keyboard & mouse if I want.

 

[phillystax]

Give me another reason....

Yes, yes, Visual Voicemail is one of the major features.

The main point I was trying to make is that it's much easier to test an equation with few variables as possible. While Apple may be enjoying monthly revenue from AT&T customers I also believe that it was not the only factor leading them to want to stay with one carrier. Troubleshooting a brand new technology is much easier when you have fewer variables.

-Phillystax

 

[ebouwman]

Bloody idiot - the best way to fight back is to offer the iPhone NOT CONTRACT LOCKED TO ONE CARRIER.

Why is he so scared of admitting the truth and admit the reason they're locked is so they can have carriers have massive contracts and Apple can skim a percentage from it.

Doug

I'm sorry, but is there something wrong with making money? I mean for god sakes! If it weren't for profits nothing would ever get devoped. Every day when i walk into a coffee shop or a store i know that somebody is making money off of me, do i have a problem with that? Not really. Get over it!

God forbid they make some money.

I agree. I'm convinced that Apple would have easily cleared the 10 million mark if they sold it unlocked. As it stands they are limiting hugely the amount of potential customers.

In related news, O2 are having a press release for the iPhone here in Ireland today, with March 14th being the day it goes on sale. The Tariffs are going to ensure I don't get one.

I think that really the bottom line is making money. Apple needs to make money, it's what they do. They've got to make money to make stock holders happy, to release cool things like the SDK, and updates.

 

[rols]

One my favorite features is the visual voicemail. Which is very dependent on the carrier having the right software to be able to handle it correctly. For Apple to insure that this worked correctly on EVERY carrier, we probably wouldn't have seen the iPhone for another 3 years.

I agree with you - Visual Voicemail was a defining difference, a very good one from the way I understand it.

However I read today in another macrumor that the iPhone will be released in Ireland without Visual Voicemail. I posted in that thread wondering whether this is the start of Apple moving towards just selling a damned good phone, unlocked, which works on any GSM (and hopefully 3G soon) network. If you take away visual voicemail .. there's not much difference between a legitimate and unlocked phone.

I'd love to see VV expanded, it could even be a selling point for the networks, we have it .. use your iPhone on us you get VV.

if however apple does do as is reported in Ireland, that feels a bit like the thin end of the wedge and I wonder if they are going to capitulate and just sell phones to anyone who wants to buy them.

 

[kddpop]

I can't stand how the shareholder mentality has taken over this forum. I want what's best for me as a consumer, not what's best for Apple's stock price.

well, there is a symbiotic relationship here. it is good for the consumer to have a company that is market-strong and able to fund further research and development.

~kyle