An iPhone Skeptic Speaks Out
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Apple's iPhone generates even more buzz with today's Apple World Wide Developer Conference kickoff. Behind the buzz, is anyone really asking who will—or perhaps won't—buy iPhone? |
It's time for a reality check, assuming the effects of Apple Kool-Aid ever wears off. Many bloggers, financial analysts and reporters are absolutely giddy with anticipation and predictions about iPhone's enormous success. As anticipation about the product reaches escape velocity, gravity may yet pull it to earth. How's that for a mixed metaphor?
I'll preface this post by saying that I haven't held or used an iPhone, which might help my impartiality but limits any first-hand knowledge. On paper, the iPhone isn't a sure thing, and there are some fundamental problems that Apple Kool-Aid drinkers have ignored.
In January, I laid out six problems with the iPhone. I'll reaffirm those after offering some fresh perspective.
Market out of synch?
Apple's sales pitch is all mass marketing, but the iPhone is not a mass-market device—at least in the United States. Some overseas markets are quite friendly to multifunction phones but, for now, Apple will only offer iPhone in North America.
Who will buy iPhone? Based on a Solutions Research Group study (PDF), the iPhone will appeal to the same buyers as other pricey, high-tech gadgets: young men. In a survey of 1,230 people, those "who are definitely interested [in the iPhone] at $499" are:
- 72 percent male
- Average age: 31
- Living in households with average income of $75,600 (or 26 percent above the national average)
- 58 percent college-educated (43 percent is the average)
- Most likely to live in California or New York
- Unlikely to own an iPod (48 percent)
Now, seeing as how the iPhone is a pretty device, I assume—and I assume lots—that the most likely early adopters will be the group of so-called technosexuals.
I haven't seen other analyst reports, but based on Apple's marketing and CEO Steve Jobs' comments, the iPhone's buying demographic is unexpected—or maybe not. The demographic nicely fits other high-tech toys, even the original iPod. The iPhone is a high-end, high-tech ego-boosting gadget for the young jet set. That is no mass-market demographic.
Last week Peter Burrows of Business Week predicted that the iPhone would be a $10 billion business. Burrows' commentary is just one example of the many blogs and news stories that presume the iPhone will be a huge success and that everyone will want one.
On the contrary, the initial market looks to be quite limited, if the SRG report is remotely indicative of buyers—even if Apple sells 3 million units this year, as some analysts have forecast.
Cheap or free phones define the U.S. market. AT&T lists about 90 phones on its Web site, 10 of which are free, and 20 others that cost less than $30. Only one phone costs more than $300 and none cost anywhere close to the iPhone's $499 or $599 price, unless the carrier should offer a significant subsidy.
No Real World Test Yet
How early adopters respond to the iPhone could affect all-around sales. There are several technical hurdles Apple will have to clear for the iPhone experience to match the hype. Apple's challenge: expectations, which the company and all those Kool-Aid drinkers have set very high. As such, even small flaws will be noticed and magnified—and the subsequent degree of disappointment will likely be equal to the intensity of the early excitement. The iPhone has the potential for a high disappointment level because of the high expectations. Unless, of course, Apple gets everything right.
Potential usability problems relating to expectations (some I highlighted in January):
- Ruggedness: Cell phones are pretty tough devices, and there is plenty of user experience to create the expectation that the iPhone should still look good after a day's or year's use. The device is all screen and the back metal, both of which are plenty scratchable on Apple's iPods. Will the iPhone really be better? I can't say without seeing the so-called protective shield for the screen. What happens when the user drops an iPhone face down on the gravel, or the mobile slips out of a pocket or purse for a bounce across the pavement? Beauty marred is more noticeable.
- Battery life: The iPhone battery is fixed, meaning that it can't be replaced. One plane ride watching videos on the device could sap the battery, which means no phone until the device is recharged. Apple pushes the iPhone as a multifunctional device, and the SRG survey reveals intended buyers that are most likely interested in such a product. But will their geek toy demands push the iPhone's battery life limits? We will see.
- Multi-touch: Apple's touch-screen demos well, but how will it hold up for continued use? Except for maybe text messaging, most other cell phones are one-handed devices, including most smart phones. The iPhone is a decidedly two-handed device. It's easy enough to find out whether the device will be convenient by practicing using two hands on one's own phone.
- No physical keys: Like multi-touch, the touch-screen numerical keys may become tiring over prolonged use. Jobs is a brilliant marketer who takes great pains to emphasize product strengths. His demos focus more on the broader features rather than on telephony. A cell phone should be great at telephony before anything else. The touch-screen, while conceptually a great user interface, may be limiting. I can't say either way, because Apple has the iPhone locked up until June 29. Even then, early adopters will have to use the device for a while to see whether no keys will be a hit, a miss or something in between.
- Crowded market: The Kool-Aid drinkers seem to forget that 1 billion cell phones are sold each year, the majority with Symban OS and a huge number outside the United States. Apple says it has a better cell phone and lots of people seem to believe the company's marketing. Sight unseen. Apple's market will be limited by consumer buying habits (that's free phones in the United States); North America-only distribution; entrenched and successful cell phone manufacturers; and all the logistical problems of entering into a new product category, such as availability. Let's say Apple has some good U.S. success and sells, say, 10 million iPhones in 2008, that's a tiny percentage of 1 billion devices. You do the math; it's easy enough.
I don't suggest that iPhone will flop, although I am skeptical about its long-term prospects compared to the current inflated expectations. But I do mean to throw a little cold water on the Kool-Aid drinkers and wake them up from their dream state.
Related Posts:
- An Apple a Day..., Microsoft Watch, June 11, 2007
- Microsoft Scratches the Surface, Microsoft Watch, May 30, 2007
- A Smarter Smart Phone?, Microsoft Watch, May 22, 2007
- Tell Me About Dial Tone 2.0, Microsoft Watch, March 15, 2007
- Where's the 'You' in iPhone?, Microsoft Watch, January 10, 2007
- Apple's Son of Newton, Microsoft Watch, January 9, 2007
Comments (10)
iPhone is V0.9 of the fabled Dynabook. People need to see it as a web-centric, miniature infotainment system, not just another cell phone with some browser features tacked on. Yes, it cam make and receive calls, but that is not where we are headed.
In ten years the major carriers like AT&T will be history, and switched network phone makers like Nokia and Moto will be scrambling to catch Apple on the software side.
Posted by Grey | June 11, 2007 4:29 PM
"the group of so-called technosexuals"
How's that compared to commodity Windows users, you know, the retrosexuals?
Posted by anona | June 11, 2007 5:21 PM
Or to the Maczelots, the homosexuals?
Posted by Joe | June 11, 2007 5:45 PM
"the Maczelots"
Ah, your garden variety Microsoft users who can't spell, you know, the typosexuals.
Posted by anona | June 11, 2007 6:12 PM
100 million iPods have been sold. The iPod works with iTunes and the PC or Mac almost flawlessly. Almost every iPod user knows it is the best all round MP3 player on the market by a longshot.
1 billion cell phones are sold a year. Everyone who buys one knows the user interface is crap. The phones barely make calls let alone do the rest of their multi-features.
What if the cell phone worked as well as the iPod? Every iPod owner wants the answer to that question, not the answers to your obvious FUD questions.
Posted by Al | June 11, 2007 6:44 PM
>>What happens when the user drops an iPhone face down on the gravel, or the mobile slips out of a pocket or purse for a bounce across the pavement?
I cringed when I read this sentence. I'm very careful with my iPod, less so with my phone. It will be interesting to see what happens.
If the price points were for 20 and 40 gig, then it would be far more appealing to me.
Posted by Fred Beiderbecke | June 12, 2007 8:34 AM
Everbody talks about Web 2.0. Gates and Ballmer act like they invented and own it. Well Apple just told thousands of devs to quit talking and start writing. The "sdk" for the iPhone is already out there, and unlike Microsoft's convoluted strategy, this one doesn't require any ties to the Mother Ship.
You PC-centric types don't understand what is happening and probably never will. Convergence is coming with a vengence.
Posted by Ed T | June 12, 2007 10:37 AM
It's hard to deny that the iPhone is dead sexy. As I recall, the Razr was not a cheap phone (I know mine wasn't), but they were purchased in droves (oh, and it's really not that great a phone either). So one can't help but imagine that the iPhone will do well. Does this belief make me a member of a suicide cult?
The article makes good points that must be considered, and I'm a gay Mac "zelot." However, the repetition of the phrase "Kool-Aid drinkers" suggests that Mr. Wilcox's impartiality is not really that at all.
"Kool-Aid drinker" was a cool metaphor the first few thousand times it was used. It was fresh and sinister. Not so now. Especially when used three or four times in a short piece. Used that way, it just calls attention to itself and makes one wonder what other emotions/feelings are coming in to play in the writing of this article.
Posted by JDP | June 13, 2007 6:54 PM
While there are aspects of this opinion I don't disagree with... there is a major part lacking in the commentary. "Cheap or free phones define the U.S. market." This kind of thinking is bottom-feeder mentality. In other words, when iPod arrived... so many people said no one would pay the price for it when other mp3 players already existed. But... as with the "free" phones... which really aren't even worth paying nothing for... the mp3 players weren't something anyone would want to pay for. This is a major aspect of electronics that the market continues to miss. Even Gates admitted it in a recent interview alongside Jobs; he admires Jobs sense of style. In the gadget market... style holds more sway than electronics developers will admit to themselves or more importantly find budget to develop... mostly because few of them know what style is!
Razr has some solid style to it and did well when it arrived. I own one. Man, do I wish it was an iPhone because it really wasn't worth buying.
Posted by neurotica | June 17, 2007 8:33 PM
Excellent!!!!
Joe way to point out the possible design and function flaws in the pratical and realistic world. Jobs once again may have overlooked form follows functionality.
I know that there has been some last minute changes with the iPhone such as replacing the horrid "scratch magnetic" surface with glass, but how is this device going to truly hold up to the average wear and tear.
For me, I like things that may look cool and all, but I need something reliable, dependable, and practical.
Posted by Douglas S. Taylor | June 24, 2007 11:07 AM