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Apple iPhone – some thoughts before the release (it keeps getting better and better) June 27, 2007

Posted by Hans in apple, blackberry, iphone, safari, wireless.
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iPhone – seems like it’s the only thing people are talking about lately.  With an official launch of 6PM (local) in the US, this coming Friday June 29th should be an interesting one.

I predict that Apple will sell all of its inventory of iPhones at the outset and will be a huge success.  The bigger question si whether Apple can keep up its sales after the initial hysteria.  Remember, Apple created the device but also has to rely on AT&T to deliver part of the oustanding customer experience – I’m just not sure a phone company knows how.

Personally, I’m torn by the iPhone.  I mean when I first say the introduction at Macworld 2007 (via webcast), I was just amazed and awestruck.  My jaw dropped and I had to watch the webcast several times.  The iPhone looks beautiful and simply kicks everything else out there in terms of aesthetics.  I currently use a Blackberry 8703E and am very satisfied with it.  But after seeing the iPhone presentation, my blackberry device suddenly looks a bit … clunky.  I’m very satisfied with my Blackberry device and love how it serves my needs.  But, I can’t help but be drawn to the iPhone – not because it’s the latest consumer device, but because I think there’s great potential there.  I don’t think it’s perfect, but overall is going to be very compelling for people – consumers and business people alike.

Here are my thoughts about the iPhone based on information I’ve read on-line (as of June 24th), my experience with other mobile technologies, and just some basic thinking.  Hopefully I’ll get a chance to try one out if/when it gets released here in Canada:

  1. I’m not convinced about the software keyboard.  I’ve gotten used to the Blackberry keyboard and am quite proficient at it.  All I’ll say is that I’m with-holding judgement until I can try the iPhone for myself.  UPDATE:  The early reviews suggest the software keyboard is usable.  I’ll still have to compare it with the Blackberry keyboard (see links reviews at bottom).
  2. The motion sensors and multi-touch screen are technologies that are going to be tough to copy, giving the iPhone a very unique and large advantage over other “smartphones”.
  3. Big, large, hi-resolution screen – that’s a huge winner.  Not much else to say about that.
  4. Battery life – Personally, I would prefer a removable battery – but that’s just me.  I tend to use my portable devices constantly and like having the option of carrying a second battery so I can swap batteries during the day.  The updated specs seem better and I hope they are real.  I suppose we’re going to have to wait for either additional battery pack accessories or a small cottage industry of do-it-yourself replacable battery kits or battery replacement services (like with the iPod).  I suspect that Apple is using some sort of Lithium-Polymer battery instead of the standard Lithium-Ion concoction (Li-Ion can only be recharged between 400–600 times before the chemical process basically breaks down – that’s about 1.5–2 years of daily charging).
  5. Safari browser – Welcome to the real Internet!  I agree that Safari and multitouch allows for real web surfing instead of just giving you a glimpse of the Internet.  My Blackberry, as much as I love the device, is still disappointing when it comes to providing web access – I can (technically) browse the Internet, but the experience leaves much to be desired.  As Steve Jobs said, “no more baby Internet”.
  6. Music and video on the phone – Again, personally, I don’t understand why people want to listen to music on their phone (I admit that I’m in the minority).  But, since this market is expected to grow, this looks like a winner by taking the best of the iPod and combining it with the phone.
  7. WiFi – Another clear winner.  What’s not to like about this feature?  Combined with Safari, surfing on your phone can’t be easier.  Because of mobile phone coverage, you can access the Internet from anywhere – no more being tied to a computer!
  8. Service Plans – To those who complain about service plans, don’t buy an iPhone.  That’s the price for the freedom to roam and access information wherever you are, rather than being tied to a desk.  Why do you think people love their Blackberry devices so much?  UPDATE:  Wow.  I never thought AT&T would come through, but they sure did.  Those iPhone monthly plans are great!  Unlimited data and reasonable voice minutes (text messaging is a bit a bit disappointing).  Compared to the rates I currently pay for my Blackberry (roughly $75/month for 200 minutes of voice, unlimited evenings & weekends, and 1MB of data), these monthly plans are outstanding!  Maybe it’s just here in Canada that we’re gouged, but these rates seem very competitive to me.  I mean, UNLIMITED data!  Wow.
  9. Camera – the 2MP camera is pretty standard.  I would have liked something higher, maybe in the 4–5MP range.  Then the iPhone would be good enough to consider ditching the digital camera too.
  10. GSM/EDGE network – This was a bit of a downer for me.  I’ve gotten used to the faster speed of the 3G speeds (EVDO on Bell’s CDMA network).  I think EDGE should manage, if not being slow.  However, the WiFi should make up for any shortcomings of EDGE.
  11. Price – I’m not sure why people are so up in arms over the price of the iPhone.  Apple isn’t targetting the masses (yet).  They’re going after the more affluent, tech-saavy user who, in the past, probably paid (or was willing to pay) $300–$500 for a smartphone or other such portable device like the iPod.  I know I bought my most recent Blackberry device for $400+.  You get so much more with the iPhone.  If you’re worried about paying $400–$500 for the phone, how are you going to afford the monthly service plan?  Daniel Eran from Roughly Drafted has some great analysis on the cost of the iPhone.

So, my final verdict (before I even touch the unit)?  Some people will love this device while others won’t.  The AT&T network might be a deal-breaker for some.  I also think some people are going have “sticker-shock” at the price of the monthly plans, having been used to roughly $20/month voice plans.  Sure there are things on the iPhone I wish I could change, but I can see myself getting one if/when it’s made available here in Canada.

The biggest draw for me, and what I believe is the iPhone’s greatest competitive advantage over all other smartphones/phones is the Safari-full Internet combination.  Now you have the Internet wherever you go.

Think about that.

Let me say that again – you have the Internet wherever you go.  Or, you can carry the Internet “in your pocket”.  Yeah, EDGE isn’t the best, but having WiFi should more than make up.  All the other stuff (music, videos, multi-touch, looks) is just icing on the cake.  Just think – this is Apple’s first version.  It’s only going to get better and better as they improve the software to add more features, and make improvements with newer versions…

Author’s note:  I wrote this post up on the weekend but didn’t get a chance to upload it until Wednesday June 27th.

Links of Early Reviews:

  • Mossberg & Boehert review from the Wall Street Journal – “a whole new experience and pleasure to use”.  I’d say a very fair review of the iPhone.  I’m impressed with the battery results.  The keyboard experience didn’t surprise me.
  • Baig review from USA Today – “iPhone isn’t perfect, but worthy of the hype”.  Seems to support many of my predictions about the battery, WiFi, EDGE, and Safari.  Another good review.
  • Levy review from Newsweek – “A significant leap”.  Good review.  Some very good comments about the battery life (can get a full day of use), intuitive use, and some very reasonable criticisms.
  • Pogue review from the New York Times – “much of the hype and criticism is justified…the iPhone is revolutionary”.  Probably the most even-handed review of the bunch.

Comments»

1. Eric B - June 27, 2007

Judging by today’s selloff, I think potential customers are starting to realize how expensive the iPhone will be. If you sign the mid-range $99.99/mo service plan after purchasing the 8GB iPhone model, that alone will set you back $3000 during the two-year contract (without any accessories)!

Here’s a few other potential hurdles that could prevent the iPhone from exceeding its already lofty expectations:

* You must be an AT&T customer to use the iPhone. With a market share of 20%, that means 80% of wireless customers must cancel their current contracts to sign with AT&T. Being a Sprint customer, I would have to pay a $175 cancellation on top of the $3000 price tag for the iPhone. AT&T’s exclusive contract runs through 2009.
* Only 4 & 8GB of hard drive space? My tiny video iPod holds 30 GB for less than $200.
* Recent surveys have shown that the majority of IT departments will not even consider the iPhone due to its PC incompatibilities & exclusive AT&T contract. That will dampen business spending & all but eliminate demand for the higher-tier contracts.

This is the ultimate “sell the news” scenario. On Jan 9th 2007, Steve Jobs announced the iPhone at the Macworld Conference & Expo. The stock has since been on fire rising 50% to $125, adding $30 billion to the company’s market capitalization. Will the iPhone really hold that much value for Apple? This huge runup comes after a fantastic finish to 2006 after Apple’s stock bottomed out at $50 in October. Thus, nearly everyone holding Apple is sitting on huge gains.

Expect an Apple selloff on Friday when the iPhone is finally released. 3 similar mini-selloffs have occurred during this recent runup:

* June 26th: Apple announces 6 AT&T service plans for the iPhone. The stock drops 3% on investor concerns over the high prices.
* June 11th: Steve Jobs shows off the iPhone at Apple’s World Wide Developer’s Conference. The stock falls 5% after investors saw no “surprises”.
* March 20th: Apple beats 4th quarter analyst earnings & revenue estimates. The stock falls on profit taking.

Apple’s recent success has created impossible expectations. With all the mega-hype already priced into the stock, just meeting expectations will create a selloff. I plan to sell tomorrow and buy back in a couple months. Longer-term investors need not worry because the future looks bright with Macs gaining market share & the iPods continuing their dominant foothold on the music industry.