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Apple should pull the plug on the iPhone
Market Watch ^ | 7:18 PM ET Mar 28, 2007 | John Dvorak

Posted on 03/29/2007 10:54:25 AM PDT by The_Victor

Commentary: Company risks its reputation in competitive business

BERKELEY (MarketWatch) -- The hype over the unreleased iPhone has actually increased over the past month despite the fact that nobody has seen or used the device. This, if nothing else, proves the power of branding and especially the power of brand loyalty.

It's the loyalists who keep promoting this device as if it is going to be anything other than another phone in a crowded market. And it's exactly the crowded-market aspect of this that analysts seem to be ignoring.

Apple Inc.'s past successes have been in markets that were emerging or moribund. Its biggest hit has been the iPod. But let's examine what happened here.

First the MP3 player business was segmented and unfocused with numerous players making a lot of cheap junk and not doing much to market any of it.

Apple does what? Advertise. Gosh, what a concept.

Then there was the online music distribution business, again unfocused and out-of-control with little marketing and a lot of incompatible technologies. So Apple comes in with a reasonable solution, links it to the heavily promoted iPod and bingo. A winner.

It advertises on TV, on billboards and on the Internet. Within no time the company takes over the business that would probably still be languishing without Apple.

Thus Apple does what it does best. It produces a jazzy product and promotes it like any good business should do. And in the process manages to get a high margin.

This is nothing more than the fundamentals.

(Excerpt) Read more at marketwatch.com ...


TOPICS: Business/Economy; Editorial; News/Current Events
KEYWORDS: apple; dvorak; iphone; johndvorak; lookatmelookatme
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To: discostu
I'm not convinced that means they're going to fail, but it's not going to be the coast they had with the iPod.

Obviously Apple doesn't think that it will be, either - their initial target is to capture only 10% of the market.

41 posted on 03/29/2007 11:38:35 AM PDT by highball ("I never should have switched from scotch to martinis." -- the last words of Humphrey Bogart)
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To: Uncledave
Apple won't market this to the corporate market

Then it will hardly replace or compete with Blackberry. Nor will it compete with Windows phones for folks who want to display spreadsheets and such.

I personally have trouble imagining the need for this, but I was in a phone store when someone came in to buy a Windows phone. I guess the attraction is that someone else is paying for it.

My personal idea of a phone is something that fits in my shirt pocket and becomes unnoticeable.

42 posted on 03/29/2007 11:39:38 AM PDT by js1138 (The absolute seriousness of someone who is terminally deluded.)
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To: Publius Valerius
How much is the iPhone going to cost? The Treo retails for something like $650. The iPhone is $1300?

The iPhone goes for 599 or 699 depending on the memory.

The most expensive Palm that turn up in my quick search was 299. I'll search again.

43 posted on 03/29/2007 11:40:28 AM PDT by The_Victor (If all I want is a warm feeling, I should just wet my pants.)
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To: Publius Valerius
They're talking like $500 (that's with a contract) for the iPhone. The Treo 750 is like $300 or $400, and I just got a 650 for $100.

Now if I could only get it to stop re-booting when I get calls from certain old-style landlines.

-Eric

44 posted on 03/29/2007 11:40:42 AM PDT by E Rocc (Myspace "Freepers" group moderator)
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To: milwguy
Iphone will be announced within two months and it will rock the cellphone world. Say bye to your Blackberry, RIM and PALM will be history when Apple announces their phone.

I agree. Believe the hype.

The iPhone is going to be bigger than the iPod.

45 posted on 03/29/2007 11:43:11 AM PDT by Aquinasfan (When you find "Sola Scriptura" in the Bible, let me know)
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To: The_Victor

Apple doesn't sell anything that doesn't have a very high margain compared to the rest of the industry. They don't risk their reputation because it took a while for the iPod to really take off as well. It will be given a grace period to start where the 1st adopters will pay a premium to be, well..... the 1st to have one. Rev 2 of the iPhone will be much more attainable and more feature rich. Those who wait will enjoy thier 2nd generation iPhones, and the industry will bow to the Apple steamrolling of the industry.

This will also be acheived when Apple creates an iTunes like setup where people go to apple to buy apps to enhance their iPhones, since it's running a version of OS X.


46 posted on 03/29/2007 11:44:06 AM PDT by SengirV
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To: js1138
My personal idea of a phone is something that fits in my shirt pocket and becomes unnoticeable

Even better if it can't receive a signal on a weekend or holiday.
47 posted on 03/29/2007 11:45:17 AM PDT by HEY4QDEMS (Sarchasm: The gulf between the author of sarcastic wit and the person who doesn't get it.)
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To: The_Victor
Even the most expensive Palm is ~1/2 the cost of the iPhone.

That's a good point, and price will be decisive, but I don't think so. Just IMHO.

48 posted on 03/29/2007 11:46:33 AM PDT by Aquinasfan (When you find "Sola Scriptura" in the Bible, let me know)
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To: milwguy
...Say bye to your Blackberry, RIM and PALM...

Ummm, I don't own 'em :)

49 posted on 03/29/2007 11:47:03 AM PDT by mewzilla (Property must be secured or liberty cannot exist. John Adams)
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To: HEY4QDEMS

That feature is called the off button.


50 posted on 03/29/2007 11:47:16 AM PDT by js1138 (The absolute seriousness of someone who is terminally deluded.)
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To: discostu

I understand margins are low in the cell phone industry in general. My point is that if Apple is charging over double what other equivalent devices cost, and still doesn't have any higher margin, they've got a big problem.


51 posted on 03/29/2007 11:49:42 AM PDT by Turbopilot (iumop ap!sdn w,I 'aw dlaH)
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To: guinness4strength

My phone, which has been on the market for a year, has integrated wi-fi. It's far from the only one available.


52 posted on 03/29/2007 11:50:30 AM PDT by Turbopilot (iumop ap!sdn w,I 'aw dlaH)
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To: Publius Valerius
From Palm http://www.palm.com/us/products/smartphones/treo700p/

Treo 700p goes for ~$299.

53 posted on 03/29/2007 11:51:29 AM PDT by The_Victor (If all I want is a warm feeling, I should just wet my pants.)
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That's a good point, and price will may be decisive, but I don't think so. Just IMHO.
54 posted on 03/29/2007 11:52:27 AM PDT by Aquinasfan (When you find "Sola Scriptura" in the Bible, let me know)
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To: The_Victor

One question, besides the fact that Dvorak is never right.

Is Apple going to release a server app that forwards Exchange messages to their Iphones like Blackberry has done so you can basically respond back and forth like you were at your desk?


55 posted on 03/29/2007 11:53:09 AM PDT by Lx (Do you like it, do you like it. Scott? I call it Mr. and Mrs. Tennerman chili.)
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To: MARKUSPRIME

On launch day eh? You buying the $500 or the $600 version? And will you be signing up for the $50/mo or the $80/month 2 year mandatory AT&T wireless plan that goes with it?


56 posted on 03/29/2007 11:54:53 AM PDT by green iguana
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To: Lx
Is Apple going to release a server app that forwards Exchange messages to their Iphones like Blackberry has done so you can basically respond back and forth like you were at your desk?

If they want to compete, they'd better.

57 posted on 03/29/2007 11:58:15 AM PDT by The_Victor (If all I want is a warm feeling, I should just wet my pants.)
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To: The_Victor
Ease of use looks like a big plus for the iPhone. Actually, there are so many features on the iPhone, or recent "smart phones" that it's almost a misnomer to call them a "phone".

Security might be another big plus for the iPhone. Windows-based smart phones have the advantage of being open systems, with hundreds of third-party programs, etc. The downside is that these phones are more vulnerable to malware than the locked-down iPhone will be.
58 posted on 03/29/2007 11:59:46 AM PDT by USFRIENDINVICTORIA
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To: The_Victor

Dvorak is an underappreciated national treasure. Simply by taking the opposite of whatever he says, you can be right more often than the wisest sage.


59 posted on 03/29/2007 12:08:59 PM PDT by steve-b (It's hard to be religious when certain people don't get struck by lightning.)
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To: The_Victor
I finally bought into the cellphone thing last week, catching up with my wife and daughter. However, I discovered that while her less expensive KRAZR phone can play music like crazy using Moterola's simple Digital Audio Player, my phone is cursed with Itunes.

I bought a one-gig memchip for my new RAZR phone, and all I wanted to do was load a sizable chunck of my own MP3 collection in there. Not only did I find I had to buy additional software just to use the phone's USB to talk to my computer, the dammnable ITunes player won't let me load more than 100 songs, even though my memory is only 1/3 full. No way, no how. The Itunes people crippled my phone so that when their Iphone comes out, it won't be competition in any way, and I can't find a patch that works on my V3i RAZR that will get around it.

So, the heck with you, you arrogant, pompous, elitists at Apple. Let the bottled water crowd have your stinking name-brand phones. Do NOT buy a phone with Itunes, no matter what you do!

60 posted on 03/29/2007 12:11:03 PM PDT by 50sDad (Cultural Diversity means never having to say "I don't fit in.")
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