Can Apple Really Dominate The Mobile Market?
After years of being developed within the bowels of Cupertino, Apple has stunned us all by releasing what may be the ultimate smart phone. Apple seems confident the iPhone can take on popular competitors such as the Treo and Palm, but can Apple truly revolutionize the entire portable device market?
When the iPhone debuted at Macworld, Apple finally quelled the endless speculation and rumors about the device, bringing advanced features into a very small package. The iPhone was originally thought to be the second coming of the Newton, but little was known what the final product would become. When in 2002 Apple first trademarked iPhone in Singapore, Australia and The United Kingdom confirmation for the device was thought to have been approved but would not ship until 4 years later.
Cell Phones makers are starting to implement music playback on their devices, even video support as well. Disagreements between carriers and manufacturers has deeply handicapped the future of cell phones. Playback quality of most phones are deplorable at best, creating an unsatisfactory user experience. The retardation of mobile phones can only be blamed on carriers themselves. Their main income is not in selling you the device, heck that’s the bait to get you into their contracts but their monthly rates and “extra fees” more than make up for phone sales. Apple has the opportunity to drastically change the mobile industry as it did with the music market. However it will take some time before Apple can bring the cell phone industry to it’s knees, as Jobs himself said the target of the iPhone was aimed at the high-end Smart Phone market. Obviously the iPhone isn’t for everyone but could be thought of as a wide public beta for a second generation iPhone.
Design wise the iPod is at a stand still, you can only slim it down and upgrade storage so much before abandoning core design elements that gave the iPod it’s simplicity and ease of use. The answer to this dilenma was the iPhone, allowing Apple access to a platform on which to create the ultimate portable multimedia device.
Yet another reason that threatens the iPod’s dominance is the cell phone. With many phones adding support for memory cards allowing more songs and pictures to be stored along with carriers offering music and video services current cell phones are becoming more like iPods everyday. However the market is filled with phones that are carbon copies feature-wise but rely on appearance and carrier availability to become hot sellers. Although some are inadequate for anything other than calling few phones have been major hits.
Motorola RAZR: When first introduced in 2004 the RAZR was a luxury phone with a hefty price tag. The RAZR not only brought upon the status of cool to it’s holder but eventually became one of the most popular phones. Later versions of the RAZR have included support for iTunes or Motorola’s DAP software and MicroSD card support. Although the song cap was 50 or 100 songs, depending on model Motorola’s software had, and the phone was noticeably slower and consumed battery life very quickly.
Motorola SLVR: In a joint partnership with Motorola the ROKR was touted by Steve Jobs as the first phone with iTunes. With a 100 song limit and no bigger than a brick this was no iPod killer let alone a good seller. Following along the lines of the ROKR Motorola introduced the SLVR, a phone incorporating the aspects of the RAZR into a ROKR and this time Motorola got it right.
LG Chocolate (VX8500): The Chocolate is a slider MP3 Phone sold in a limited variety of colors. The focus of the phone was to be fashionable creating an iconic status for the user. Support for Micro SD cards is included but it does not support iTunes. The ad campaign focuses on the Phone’s looks and relies on appeal to market it.
Overall I believe Apple’s entry to the Cell Phone market won’t show major success until a low end consumer version is sold throughout different carriers. That could pose a problem with developing the iPhone and selling it through other carriers, their impositions could totally cripple the device completely. Eventually a transition will be seen from iPod to iPhone to a portable Multi Media device. The iPod could become a re-branded iPhone sans calling features and could allow larger storage in the bigger form factor. If Apple cannot figure out a way to dominate the mobile market, the iPod could be in serious trouble in a few years.
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Comments
Word is they’ll make 50% on the iPhone sales. That’s $2.5 Billion per year if they meet there 10million per year sale at $499.
Also rumor has it a lowered cost phone (phone,ipod-only) is in the pipe and iPhone may be hear sooner than June due to consumer demand.
How much would it cost to buy a carrier. Cingular even? To truly revolutionise the phone, Apple needs to be in control of the carrier end of the “experience”. Launching with Cingular will give Apple an opportunity to get the handset / desktop integration right and I am sure they have commitments from Cingular to develop support for advanced features, perhaps such as iTunes downloads over the phone network… But, in the end, it will surely be an Apple phone on an Apple network, integrated with .Mac and delivering the total Apple experience.
They don’t need to own a carrier or lease the lines. You have 5/6 companies in the US market, three were bidding for the chance to sell the iPhone from Apple. Cingular won and changed a number of items to service to Apple’s needs (customer features).
And since .Mac is available over the web as is most everything else nowadays all you need is an ISP, oops sorry wireless carrier to grant you access to those services (internet) so that your iPhone will co-integrate with .Mac, iTMS, Yahoo Mail, and whatever messaging service you use.
Really the hardpart is on the software engineers.
They’ve got 11.9b cash… Wish I did. Convergence is the word in Ca. lately. And what’s next on the horizion? Well one can speculate anything and probably be close.
There market is the Consumer, so think about what YOU use every day that leads along their recent thinking. Wireless service is not in the cards besides that Cingular is going back to AT&T.
I truly doubt they’ll have 1% of the mobile market by next year, simply by dent that they are currently an AT&T only device. Wouldn’t they have to convert the vast majority of Cingular/AT&T Wireless’ customers to hit that 8Million mark?
Maybe I’m wrong, but I was under the impression that it is 1% of the world market. So Europe & Asia could contribute too.
Here in Belgium e.g. I can buy any phone and choose whatever carrier, change carriers while keeping my number. This is all regulated by law. Don’t know the exact situation in the rest of Europe but our system gets implemented in other countries. (We probably copied it from the Dutch as they are always quicker.)
And new generations are coming, and they don’t know about the windows-mac animosity, they talk about HP, Apple, Sony.
They have a far more pragmatical view on things. It is also clear to them that every technological device has a cost in money and in time. As a Dutch writer once said, in modern society isn’t enough that I’m a good writer, I also have to be a good driver, I must know how to service my computer and operate a washing machine, a video…
That’s the time factor coming in. What is the use of a cheap washing machine if I can’t trust it working alone. Design is also factor in our well being. The US & Japan have this cultural advance over Europe, where we are happy when it still works. But it’s changing over-here too.With the riots in Paris there was a strong consensus among analysts that the (Corbusier-) housing was a contributing factor. Technology is advancing at incredible speeds. There is no time for learning how to operate this ‘things’. They must work immediately. I remember when my dad bought something he wouldn’t use it before he had read the complete manual, even with a car. There is no time for that anymore. There is no time for asking from the user to develop a skill to operate. The development of skills returns to were it should be, your core business. Years ago, good ideas could easily get crushed in the force of the mainstream. That has changed. Creative usefulness is more in demand, and the new consumer judges it with little patience.
Wouldn’t they have to convert the vast majority of Cingular/AT&T Wireless’ customers to hit that 8Million mark?
Cingular has about 58 million customers, so converting 1/5 of them is probably overly ambitious, particularly when you’re basically appealing to the smartphone market.
If you include the world market, then it’s still up in the air how Apple will deal with service providers and whether or not the phone will be s old unlocked. If so, it could do quite well depending on how they set the price.
In Asia, I saw a report in which many Japanese kind of yawned. They liked the design, but these guys are buying coffee and subway tickets and watching live television on their phones. Listening to 4GB of songs isn’t very impressive to them.
Here in Belgium we can buy parking time with cell phones and I think bus tickets to now. This is, in our country at least, is independent from the provider you’re with or the phone you own.
Hi SydneyStephen
If Apple bought a cell phone network it would stop innovation in many ways. Sure, they’d make a new type of GSM that wasn’t quite GSM and it’d work great for them on that network.
Forget anything outside the US though. So nothing for us in Sydney, ever.
Apple’s far better to let the GSM standard do what it does best with the cell technologies, and then make the iPhone the best place to use it…. worldwide.
I’ve never used a cell phone outside of the US, but it seems to me we’re about 5 years behind the times. Everyone else can bake cakes and cookies with our phones, but I’m lucky if I can send a text message with an attachment (at a cost of about $.25/kb).
In that arena, Apple could do well IF they drop the price. But in a market with 3G coverage, unlocked service, and real smartphone competition, it remains the be seen.
And if they are forced to open the phones in Europe and Asia, what is to stop someone from “unlocking” the phones here or bringing already unlocked phones back to America?
with our phones
That should be “with THEIR phones.”
I think our 3G service might be even worse than yours.
1. Apple is reportedly targeting 1% market share in the first year. That’s hardly “domination”.
2. Phrases like “The RAZR not only brought upon the status of cool to it’s holder . . .” just make me cringe. For starters, the word you want is “its” (the possessive of it), not “it’s” which means “it is”. But that’s not the worst of it. The point is, if you’re going to call yourself a writer, get thee back to school, and get some learning in ya.
Regarding Apple’s market share target.