Posted on 06/18/2007 12:15:57 PM PDT by Star Traveler
Who Can Kill the iPhone?
Atlanta Journal-Constitution
06/18/07 4:00 AM PT
AT&T's guns are loaded with the iPhone, but other carriers are already mounting their counterattacks. They say the iPhone is too expensive, that Apple has a backwards understanding of the market, and that its goal of a 1 percent market share is hardly frightening. They've also got a few very iPhone-like products on the way to stores.
To hear many wireless companies talk, the iPhone from Apple (Nasdaq: AAPL) and AT&T (NYSE: T) is a welcome industry addition.
It will spur interest in mobile technology and music phones, they say, while posing little competition because of its high price.
However, that hasn't stopped carriers and handset makers from bracing for a fight.
"iPhone killer" is the popular, behind-the-scenes term at many companies, said JupiterResearch analyst Michael Gartenberg. "There are going to be things with big screens, with touch screens, things that are media-centric, that are music-centric.
"Expect to hear that phrase a lot in the months ahead as other handset vendors or carriers who aren't offering the iPhone are going to try to offer equivalent products," Gartenberg said.
Device vs. Network
While Apple revolutionized and then dominated the digital music world with the iPod and iTunes, questions remain about whether it can -- or even intends to -- repeat that success in the wireless market, where entrenched corporate giants are accustomed to rapid change, bruising competition and very different strategies.
Verizon Wireless, which passed on being an iPhone carrier and is the chief wireless rival of AT&T's Atlanta-based wireless unit, is working with a handset maker to launch an iPhone response later this summer, executives say.
With the iPhone initially an AT&T exclusive, Verizon Wireless also is emphasizing its network as a superior choice.
"For us to lose sight of that and focus on a single device wouldn't be good business," spokesperson Brenda Raney said. "Most of our customers walk into a store for a lot more than a device," she said, noting exclusive Verizon content and services and network reliability . "The 'i-device' isn't designed to meet the needs of all those customers, so the response could well be doing what we do well."
Power Marriage
However, by embracing Apple's product and hot brand name, AT&T has made itself stand out, said Hugues De La Vergne, a Gartner (NYSE: IT) analyst.
"It gives them a significant advantage," he said. "Operators [such as AT&T] have traditionally focused on their networks and not the handset manufacturers. In this case, it's a little different."
No. 3 carrier Sprint Nextel (NYSE: S) has its own response: Bring it on.
"Sprint has been leading the wireless industry in the area of music," said Oliver Valente, Sprint Nextel's senior vice president of product management and development. "It's a very competitive industry right now, and Sprint welcomes the competition."
The digital music player industry where Apple dominates makes money from hardware sales and not services, but it is the reverse with wireless, Valente said. "We're talking apples and oranges. No pun intended," he said.
This means a high-priced handset such as the iPhone, which is to cost US$499 and up, "will not be a mass-market mover," Valente said. He said music phones costing less than $100 sell the most.
Touch Screen Is Old Hat
While Apple has been praised for the iPhone's elegance, many in the industry point out that some of its touted technologies, such as a touch screen, are not unique among the world's high-end handsets, which may make their way to the United States in some form.
South Korea's LG Electronics teamed up with the fashion brand Prada to create a large touch-screen phone that's available in Europe and bears more than a little resemblance to the iPhone. Samsung Electronics' Ultra Smart F700, announced in February, offers up a phone-spanning touch screen plus a slide-out keyboard.
Helio, a cell phone provider owned by Atlanta-based EarthLink and SK Telecom of South Korea, recently introduced a fancy handset known as the Ocean. The device has received good reviews, but Helio is a small company that doesn't have anything close to the reach of AT&T.
A Measly 10 Million
Apple says it aims to sell about 10 million iPhones in 2008, which would give it about 1 percent of the global handset market.
That relatively modest ambition is one reason the big players are not "shaking in their boots," said Charles Golvin, a Forrester Research analyst.
Nokia (NYSE: NOK) , the world's No. 1 cell phone maker with more than a third of the global market, sees the iPhone as validating its vision for phone handsets that merge many technologies, said Bill Plummer, Nokia's North American vice president for multimedia.
Starting a Family
However, Gartenberg warned that people who are "dismissive of Apple's role in the phone market are going to do so at their own peril.
"Apple has shown a tremendous ability to understand what the market wants and to provide those products," he said. He said that if someone had said five years ago that Apple would in 2007 be the dominant player in digital music, "it would have been crazy."
Analysts say Apple's challenge is to build upon the iPhone the way it did with the original iPod, growing the new business quickly by unleashing a family of iPhone models that appeal to a broader audience.
"I would expect them to revise this product as quickly, if not more quickly, than they update the iPod product line," Gartenberg said.
More Mac Than iPod
However, there are limits to how low Apple will go in making iPhones affordable, Golvin said. He said Apple has no interest in ruling the world of cell phones the way it dominates digital music players.
"The bulk of what Nokia, Motorola (NYSE: MOT) , Samsung sell today are low-end phones," he said. "They're not really targeted to the type of users that Apple wants."
Apple's foray into the wireless business is better compared to its experience selling Macintosh personal computers rather than iPods, Golvin said.
"They've got small market share," he said, "but premium products."
© 2007 Atlanta Journal-Constitution. All rights reserved.
© 2007 ECT News Network. All rights reserved.
LOL...
Regards,
Star Traveler
Check out for Mac Ping List... :-)
So will that come before or after the fabled iPod killer? I mean, if the best anyone has is the Zune, puh-leeze.
Following in the footsteps of all those iPod killers, like the mighty Zune.
It seems most of this stuff is just ‘bells and whistles’, to keep a bored people occupied.
GMTA, yours 47 seconds quicker.
The iPod is popular because of its name. It's a cultural icon unto itself, now popular just because it is.
There are a number of better audio players on the market. iPod just has the name recognition and market leadership that keeps up its momentum. It isn't because the iPod is the best player.
Apple can certainly kill it.
As a former ardent PC user who converted to a Mac and an IPOD, I can’t wait to get the I-phone. Sooo Looong Sprint.
and I betcha those grapes I couldn’t reach were sour anyway.
Getting a product to the top of the heap requires more than just having the “best” product. It must have distribution and marketing to support it. The makers must be able to capitalize on the various market forces in whatever the market is.
Apple iPod has done that quite well, and the rest, well, not so much.
I’ve had my Nokia phone for about six years and had the screen replaced once when I fell off a bike onto the phone (ooops...). So, it’s about time for me to get rid of my six-year-old Nokia and the Qwest network and go with something different. I’ve been floating around in Texas and Oklahoma for the last two years with an Oregon area code anyway.
This is the only phone that has made me want to switch to anything else. Nothing else has seemed any good, or not good enough to get away from what I already had. I can’t wait either... :-)
Cell phone handsets are usually deeply discounted by the service provider in order to entice customers into signing-on or upgrading. How is this going to work if Apple either can't produce the handset in the quantities needed, or deliver a declining price (over time) to the service provider? This strikes me as the A380 of the cell phone market. They'll sell them early-on to the techies, but then it'll be a museum piece right next to the 'Lisa'.
More info and images of the iPhone here:
http://www.engadget.com/2007/01/09/the-apple-iphone/
One question I have: Is there a way to switch off the phone part so that you can use the other features on a plane?
Well, it’s been reported in some articles that I read recently (but don’t have copies of them), that about 10% of the cel phone market has expressed some interest in the iPhone. And that’s after everyone knows what the price is, since the price has been “bandied about” so much recently.
Furthermore, they’ve got over a million people on their e-mail response list to alert people to when the iPhone is ready to purchase (as if we weren’t going to know otherwise... LOL...)
It appears that all these people already know what the price is and yet they are extremely interested in it. Apple is only interested (to start with) 1% of the cel phone market and it appears (from what various analysts say) that it’s not going to be too much of a problem by the time frame that Apple has indicated (which is the end of 2008).
I don’t think they’re going to have too much of a problem and not very much problem continuing it on into the future. The same type of stuff was said about the iPod, in the beginning — that it was too expensive, that only certain people would buy it at first and then it would flop, and that it had no staying power. That was all shown to be totally wrong — and those certain “nay-sayers: are going to be shown to be totally wrong, too — on the iPhone...
I’m certainly looking forward to it, as I’ve been with the same phone for about six years and this is the only phone that has ever gotten me to want to switch from it. Nothing else on the market has ever been good enough. This is the product for me. And it’s certainly going to be the product for a lot of other people, too — so much so, that I’m concerned about even being able to get one in a reasonable time frame. We’ll see...
Regards,
Star Traveler
This is a very good description of what "the best" means to you. To me, "the best" means something entirely different when it comes to audio equipment.
Easy to use is on the list, but not at the top. Sound quality and codec support were #1 and #2 for me, so I went with the Neuros. It's physically large, compared to the iPod, but that didn't matter to me, since I wouldn't be carrying the thing anyway.
I've been very happy with my Neuros. It supports WAV, WMA, MP3 and OGG. It records, from internal microphone or line-in. It has a built-in FM transmitter. And it's reasonably easy to use. ...oh, and the open source firmware is a pretty cool thing too. :-)
Aren’t they involved with WiFi TV to do television broadcasts?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.