iPhone: It’s Not Just The Device

February 12, 2007

iPhone: It’s Not Just The Device

We got to see Steve Jobs introduce the new iPhone in January. It was certainly one of the most effective product announcements we have ever witnessed – generating thousands of column inches of coverage across the world. But what does it mean for the high tech industry?

 

It’s a declaration of war, that’s what. The battle is on for the unified personal electronics platform, the one piece of electronics we will carry with us at all times, at least until under-the-skin chip implants become practical.  Cell phones, cameras and music players are converging and there are many “smart phone” products on the market already. But they are mostly collections of poorly integrated features that garner marketing check marks. They are often confusing and difficult to use. And their features are usually crippled by cellular service providers, concerned about impacts to their business models.

 

Apple is the undisputed master of creating compelling high tech products that are easy to use. They proved it with the Macintosh, but lost the market to an imitation product, Windows, from Microsoft and only now are beginning to recover what was lost. Apple proved it again with the iPod music player and has thus far managed to hold off competitors, including Microsoft. The iPhone Jobs announced won’t be delivered until June, and its $499 price is aimed at high-end purchasers, but it has set a marker. It’s the kind of product people want to own, with a gorgeous display and cleanly designed touch-screen interface.

 

One of iPhone’s most compelling features, a visual interface to voice mail, was implemented with the cooperation of Cingular, the U.S. carrier whose service iPhone will require. iPhone also will automatically switch from cellular Internet to a WiFi hot spot when it sees one – the sort of desirable feature most cellular providers detest.

 

Apple’s deal with Cingular appears to give it a freer hand to innovate than other cell phone vendors enjoy, as those two features suggest. If so then Apple has a strong advantage over its competition, because it is not constrained in its choice of features.

Apple has also negotiated free “push” IMAP mail service with Yahoo and a map service with Google. Nailing down these three partnerships is almost as impressive as the iPhone itself. Apple is aiming at nothing less than king of the hill in personal electronics and it is well positioned for what will be a life or death struggle involving industry giants, from across the globe.

 

Disclosure: Arnold Reinhold owns stock in Apple Inc.

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