Apple iPhone: Can It Be Real?
Will Apple ever release its iPhone? If you’ve been looking at the web this month, there’s growing speculation that the next big step for CEO Steve Jobs is a launch of an iPod-like cell phone in January 2007 (see the collected pictures from various sites like Gizmodo for theories on what an Apple phone might look like).
But rumors about an iPhone have been around forever. So, are we ever going to see it in stores?
Color me skeptical.
According to Ryan Katz, a Senior Editor at ThinkSecret.com, sources close to production at Apple are saying that we may see a venture into the cellular market early next year.
Rumors aside, this might be a good time for Apple to stopping talking and start doing. If you’re anything like me, you’ve noticed that a new musicphone comes out almost every week (Verizon’s Chocolate, the Sony Ericsson W800 and the Motorola SLVR to name a few). No doubt this could start to have an effect on Apple’s iPod business.
Why? In truth, consumers have a basic logic that’s worked for them for decades… Let’s say you have an iPod and a cell phone. It’s only a matter of time before you get sick of juggling two devices. Now that Verizon, Cingular and Sprint each have a phone and music player combo, it won’t be long before you marry your phone with your mp3 player. My oft-regarded Palm Treo 700w has celebrated this holy matrimony and I’m happy to report that the marriage is nothing short of bliss.
Apple is surely aware that the advent of musicphones will eventually diminish their iPod distribution, but will this force them to step into a whole new product area?
If you own an iPod, chances are you love it. It’s easy to use, it holds a ton of songs, and the damn thing just looks cool. The iPod is the cornerstone of Apple’s profitability and has led to the rebirth of the company over the past five years.
So why give up a good thing? Besides musicphones cutting into iPod sales, Apple itself would be cutting into iPod sales if it came out with an iPhone. Just like you won’t see Gillette release an electric razor because its Mach 3 and Fusion sales would nosedive, Apple would similarly be eating its own young.
An iPhone seems like a risky proposition for Apple. Next to hurting its own profits, Apple would also be attempting to establish a niche in an already crowded cell phone field. These are uncharted waters for the tech giant. Certainly Steve Jobs is taking the ESPN phone as a deterrent, whose abysmal sales are a clear disincentive for any future Apple cellular apparatus.
Though there is an upshot. Apple users are fiercely loyal. Not only is this true with their computers, but also with their iPods. In fact, the iPod is probably the most recognizable electronic product in the world today; an indication that Apple has established a trusted and identifiable brand. For any company, this is an incredible achievement.
If the iPhone were to come out, it would fuel the interest of millions of users already sold on Apple as a reliable source for electronics. For Apple, that’s gives the iPhone idea some buoyancy.
But the final part of the equation is how Apple can deliver this service. Will they market the iPhone through another company, like Verizon and it’s Chocolate phone? Or will they attempt to make a brand of cell phones all its own? Either proposition is treacherous.
Apple must consider competing against Verizon and other carriers who already have a commanding lead with their own musicphones and may not want to overshadow other product investments (like the Chocolate). Or if Apple chooses to open its own mobile phone business, it would need to lease a portion of a carrier’s spectrum in order to successfully control production, distribution and mobile service subscription end-to-end. That wouldn’t be fun for a company who, so far, has kept its hands out of the telecom biz.
So, what now? Nearly every electronics website has a hypothesis or spoof on what an iPhone would look like. So, where is it? As soon as my questions (and my fears) for Apple are allayed, I’m going to keep my hopes for the iPhone to a minimum.
Update: Prior to publishing this article, Think Secret has rescinded it's earlier conclusion that the iPhone would be out in early 2007. Apple has apparently described the task of producing an iPhone as frought with technical difficulties. We'll see if the story changes...again.