iPhone imitations long before Asia launch

Staff Writer
12 Feb 2007
00:00

It looks like a little device named the iPhone (Apple's, not Cisco's) will now become the bane of reporters for the wireless industry in the year to come. From the initial publicity that it has generated, and the unprecedented allure that it has had on the industry, it will be near impossible for anyone writing about handsets, NOT to make comparisons to the iPhone.

As such, I'm just going to get it over with, right here, right now. The following 500 words or so is what I think about the iPhone and I'm resolved not to mention it again for the rest of 2007.

The iPhone certainly seems to offer a killer punch to the market. It combines iPod-chic with some advanced technology, and that Apple je ne sais quoi allure. In other words, it rides on the supreme reputation of the iPod as a masterpiece of design, and then it throws in some innovative technology, like the multi-touch screen, proximity sensor and so on, which will surely baffle some users and give the iPhone an element of the magical. And it is backed by the Apple brand, which has inspired the digitarati since its inception - despite nearly going bust.

These three factors already give the iPhone all the necessary ingredients for success as a standalone product - and we haven't even gotten to the 8 GB of built-in memory, the OS-X interface, integrated Wi-Fi and large 3.5-inch screen.

More than simple Jobs

Then there is the other side of the story. As a handset, the iPhone is far from a standalone device and it is now part of an industry that has a long standing history. Whereas the iPod represented a brand new product category, and offered the then unique value proposition of large capacity, portable storage, the iPhone is only the latest model in a market that features new models on a weekly basis.

Yet another variable is the operator. By selecting to adopt an exclusive distribution model with Cingular in the US, Apple is effectively raising the price of the iPhone - that is requiring the consumer to give a little more, either by changing operators, or paying a premium on the gray market which no doubt voids any after-sales support.

This also limits the market share of the iPhone, which Apple CEO Steve Jobs says is looking for 1% of the total handset market. One percent of the billion-unit handset market is 10 million. With Cingular's 61 million or so subscriber base, one out of six Cingular users would have to fork out the $499 or $599 and sign a two-year contract to get their iPhone.

It is an achievable target. Given enough time, the iPhone will surely sell 10 million units. But that is precisely the problem with the iPhone. It is in an industry where new models are hatched everyday, where multiple vendors are competing aggressively, and where time to market, global distribution capabilities, regulatory compliance, operator relationships and production capacity are just as important as a sleek exterior and an iconic brand.

iPhone too

Now that the iPhone is out of the bag, no doubt all the major handset vendors have already started to develop similar products.

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