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iPhone Faces Uncertain Market

kdawson posted more than 7 years ago | from the second-and-third-thoughts dept.

Communications 869

48 hours have passed since Steve Jobs's MacWorld keynote and the reality distortion field is beginning to wear off. Lists of the drawbacks of the announced iPhone are sprouting all over the Net (and there is the occasional defense by true believers). Now narramissic writes, "The iPhone may be poised to take over the high-end cell phone market, but is it a market worth taking? Not if an InStat survey from July is any indication: Of 1,800 consumers surveyed, just 21 had spent more than $400 for a cell phone. Prices for the iPhone, admittedly more of a handheld computer than a cell phone, start at $499 for the 4G-byte version with a required two-year contract with Cingular. So, is Apple pricing it right? Analysts quoted in this article seem to think Apple's going to have a hard time getting the 1% of market share that Jobs called for."

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This news: (-1, Offtopic)

Anonymous Coward | more than 7 years ago | (#17559284)



segin (883667) | more than 7 years ago | (#17559286)

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Is it possible... (5, Insightful)

ack154 (591432) | more than 7 years ago | (#17559294)

That most people won't spend over $400 on a phone because there aren't any phones worth spending that much on? The high end market may be small... but there's no reasoning given for not spending so much... maybe it's just because nothing (until now, IMO) has been worth the extra $$?

Re:Is it possible... (1)

user317 (656027) | more than 7 years ago | (#17559348)

I agree with the parent, the iPhone is the first phone that doesn't entirely suck.

Re:Is it possible... (0, Flamebait)

ShieldW0lf (601553) | more than 7 years ago | (#17559396)

LMAO. Nice to know there is a voice of reason in the world...

I was right here yesterday getting modded down to -1 Flamebait for expressing these types of opinions, and was starting to think the world had gone insane. There must be fanboys crying into their Mountain Dew this morning...

Re:Is it possible... (4, Insightful)

eln (21727) | more than 7 years ago | (#17559444)

Maybe, but I think it's that the average person is reluctant to spend 500 bucks on a gadget, no matter what it is. You limit yourself primarily to early adopters and gadget freaks. This may also be a big reason the PS3 is having difficulty gaining traction.

If Apple can generate the buzz to make this into a fad item like the iPod, they could sell millions to young people and damn the cost. However, if it ends up being grouped in as just a superior Smart Phone, you aren't going to get anyone but the gadget freaks to buy one at that price.

Re:Is it possible... (1)

ack154 (591432) | more than 7 years ago | (#17559590)

Oh I definitely agree with all of that. It IS expensive for a phone. And price will always instantly turn some people away. But I think with something like this, there will also be a lot of people giving it a second look despite the price.

Re:Is it possible... (4, Insightful)

mjpaci (33725) | more than 7 years ago | (#17559592)

Once non-Slashdot people start seeing the likes of Paris Hilton and Shaq using the iPhone, it will gain traction. Isn't that how it always is? Remember, nobody was going to spend $300 on an MP3 player named the iPod...

This is a new take on an old market. Give it time. I bet come October we'll all be singing a different tune...

Re:Is it possible... (5, Insightful)

Gr8Apes (679165) | more than 7 years ago | (#17559732)

Yep, that would explain the large number of premium-when-released iPods, the Treo and Palm pilots, flat screen TVs, HDTVs, nVidia 8800 Gxx's (not even a complete gadget!!!) Macbook (Pro)s, Alienware anything, etc etc etc.

The PS3 is having difficulty because, in a word, it sucks. It's more than a day late and a dollar short.

I'll give you a different take on the "Smart Phone" limitations. I, for one, haven't bought one because of the size, power requirements, and sheer onconvience of using and carrying one. Along comes Apple, and appears to make this simple, easy to use, intuitive, and, to top it off, good looking. Oh, and need we mention that you can also run your familiar interfaces on it provided you like Macs to begin with? No special "browser" needed. No new learning how to browse the web. A PDA you can actually use. My current LG phone's calendering option is so convulted to setup that I don't use it. The contact list is "locked", or they think it is, so I cannot manage it easily nor sync it with my computer. The iPhone does away with all of that. It will appeal to a large group of people that are carrying both a cell phone and an iPod, if you add PDA and/or pocket PC to that, you'll just add to the attraction.

Re:Is it possible... (5, Funny)

the_humeister (922869) | more than 7 years ago | (#17559514)

Personally, I refuse to spend that much on something I know will somehow eventually end up in the washing machine and dryer, twice!

Re:Is it possible... (1)

ack154 (591432) | more than 7 years ago | (#17559626)

That's what the $4-5/month insurance is for. At least, I think Cingular offers something like that. I know Verizon does. It would be well worth the extra $$ for something like this, I think.

Re:Is it possible... (5, Insightful)

siphonophore (158996) | more than 7 years ago | (#17559566)

You're right.

Look at the iPod: Before that product, the market for $300 mp3 players was relatively non-existent.

The iPhone will probably do the same thing: Create its own market and then dominate it.

Re:Is it possible... (1, Insightful)

letxa2000 (215841) | more than 7 years ago | (#17559648)

I was talking with a friend yesterday about this. I think the iPhone is way too hyped. My friend showed me a video of the features, etc. and the only thing my Treo doesn't do is the MP3 player part--and I understand I *could* use my Treo for that, if I were so inclined.

I have an iPod Nano and I don't want anything physically larger for my MP3 player. My Treo 650 seems to do everything else that I saw in the iPhone promotional video. Sure, maybe not with the Mac-like/iPod-like interface that some people like. And the Treo's been on the market for how many years?

I really don't see what all the fuss about the iPhone is. But, hey, if that competition further drives down prices on the Treo, that's always a good thing.

Re:Is it possible... (2, Insightful)

earnest murderer (888716) | more than 7 years ago | (#17559724)

Indeed, part of the justification in this cost is that it is your iPod too. I would definitely buy this if I was inclined to carry a flash based iPod.

Factor in that convenience/expense and the cost is competitive. Of course if you don't use an iPod, you have the current argument that it's a damn expensive phone. Of course, if you outfit your smart phone with 8 gig of ram (ignoring for the moment that you *can't*!) it's actually a pretty good deal compared to many smart phones.

The only reason I am hesitating on buying one is that I like having my whole library with me and right now that comes in at around 45 gig of 128kpbs aac files. Well, that and it's a 1.0 product. I'd rather read the /. discussion on the odd problems than experience them. I'm not sure these will hold me back since I need a smart phone, and a lot of memory to begin with.

Re:Is it possible... (1)

jroesner (200756) | more than 7 years ago | (#17559756)

Most people won't spend $400+ on a phone because they see the "free" phone and take that...with a 2 year contract. Americans in general want something for nothing, and we really believe that the free phone you get from the cellco must be so darn cheap to make that they can give it away. WRONG. The cellco give you, the consumer, a price subsidy if you sign that nice 2 year (or more I've seen) contract. Ever seen the ETF on a contract? I'll bet that price generally covers most of the cost of the phone you just got for "free." The cellco just takes the money out of you over your contract period, or all at once if you break your contract. AFAIK ETF charges are not prorated for contract length and if you break your contract late into your contract period your now former cellco just made some extra money from you.

I've been out of contract for almost 4 years now, and the last 4 handsets that have been in my household didn't come from my cellco. I buy unlocked because they aren't crippled with carrier specific firmware or reduced functionality Bluetooth. Do I pay more for my phones? You bet. Is it worth it to me? Absolutely. Is it worth it to the common Joe? No. They'll take the "free" phone.

Re:Is it possible... (1)

b0s0z0ku (752509) | more than 7 years ago | (#17559822)

The cellco give you, the consumer, a price subsidy if you sign that nice 2 year (or more I've seen) contract.

I got a Nokia 3120 phone for "free" with a 1-yr basic contract from Cingular in 2005. It was light, tiny (3.5" x 1.5" x 0.75") and it worked fine for more than a year. It did exactly what I wanted it to do, which was making phone calls and occasional text messaging. I don't really need anything more capable.


Re:Is it possible... (5, Insightful)

nine-times (778537) | more than 7 years ago | (#17559790)

That was my thought exactly. I, for one, have never owned a "smart phone". I can afford to spend $400-$600 on a phone, and in fact my company has offered to buy me a Motorola Q or Blackjack, but I don't want them. I sure would like to get a smart phone, but whenever a new model comes out, someone at my company gets one, and I usually get a chance to play with them. You know what? They stink. Really, they're terrible.

The OS is unresponsive, the email clients have a hard time connecting, and the various applications crash too much. The interface stinks. There are too many buttons and jog wheels and doo-dads. They're all just toys, and pretty much everyone I know spends more time trying to get theirs to do something than they spend time using it.

If someone would just make a cell phone with an e-mail client that wasn't completely frustrating, I might spend $500 on the phone and an extra $20 a month *just for that*. Yes, I've tried Blackberries, and I've even supported Blackberries. I can't stand them.

Also, you have to consider that people have shown a willingness to spend $300 for just an iPod. Let's say Apple made an iPod with a screen as big as the screen on the iPhone. Would people be willing to spend $300 on it? Yes. If you made a smartphone as slick as the iPhone without the iPod components, would people spend $200 on it? Certainly. So why are people saying that no one will pay $500 for the iPhone?

How about ... (0, Redundant)

pembo13 (770295) | more than 7 years ago | (#17559308)

A phone that makes AM quality calls, at cheap rates. MAYBE with texting capabilties. I might buy that.

iPod + Phone (5, Insightful)

geoffrobinson (109879) | more than 7 years ago | (#17559326)

If you are looking for an iPod and a phone, or if the phone is a bonus, the price may be worth it to you.

I'm not familiar with the specs of the iPhone, but it isn't as simple as "this is a really expensive phone."

Is it just me (0)

Anonymous Coward | more than 7 years ago | (#17559332)

Or is Daniel Eran's article the best-written?

Re:Is it just me (2, Informative)

Anonymous Coward | more than 7 years ago | (#17559574)

Let me give a summary of what's missing
* No downloading of songs
* No 3g
* Not possible to install external software
* Cingular only for 2 years
* No battery Replacement
* No GPS
* No finger-feel to it, can't use it under a table or without looking at it
* No MS exchange (do they want the corporate user?)

Wireless, More Space Than Nomad... (4, Insightful)

XxtraLarGe (551297) | more than 7 years ago | (#17559336)

Just remember what everybody was saying about the iPod when it first came out. You may not like them, but I'd say Apple has been pretty on the mark over the last 5 years or so...

Re:Wireless, More Space Than Nomad... (4, Insightful)

richdun (672214) | more than 7 years ago | (#17559528)

Bingo. Even as a big fan of what Apple can do in general, I'm not calling this one until it comes out. Apple is bad about not wanting to get into short upgrade cycles, so if by June something strange happens and 3G is suddenly huge, they'll put it in there rather than waiting for v2 a year or so down the road. iPod, (apple)tv, the switch to Intel - everything Apple has done recently has been criticized, but then the stock flies through the roof and sales are at record levels. Too many people underestimate the willingness of the general public and even those in the know about technology to pay extra for something that hits enough of the tech high points and "just works," regardless of whether it has all the bells, whistles, and radios it needs to be completely state-of-the-art.

Re:Wireless, More Space Than Nomad... (2, Insightful)

gutnor (872759) | more than 7 years ago | (#17559774)

The biggest difference with the iPod is that anybody could buy an iPod.
With the iPhone, it is only Cingular customer, and even then only the customer planning to stay for another 2 years.

Ok you may say that iPod was for Mac user only in the beginning but I don't think Apple has the same karma appeal with its own customer than with Cingular contract user. In this case Apple must rely on Cingular karma and it is less flawless ( sorry for the 2 Cingular fanboys )

Re:Wireless, More Space Than Nomad... (5, Insightful)

winkydink (650484) | more than 7 years ago | (#17559564)

When the iPod first came out, the mp3 market was still very small and still is in comparison to the cell phone market. There are over 2 billion cell phones in use today, with the big players having huge market share; Nokia's is currently over 30%. It's a low-margin, commodity business... not an area where Apple has expertise (niche products, high margins).

SO, I wouldn't base the past success of the iPod as an indicator of the future success of the iPhone.

Re:Wireless, More Space Than Nomad... (1)

M-G (44998) | more than 7 years ago | (#17559584)

Not only that, but don't forget that a couple of years ago, people were paying near this price point for the RAZR.

Re:Wireless, More Space Than Nomad... (1)

winkydink (650484) | more than 7 years ago | (#17559706)

Razr's were $500, unlocked, on ebay when first introduced. This is $500 for a locked phone + 2 yr contract. Big difference

Re:Wireless, More Space Than Nomad... (3, Insightful)

lucabrasi999 (585141) | more than 7 years ago | (#17559610)

You may not like them, but I'd say Apple has been pretty on the mark over the last 5 years or so...

Of course, the 10 years prior to that, they saw their desktop computer market share shrink to almost nothing. Not trying to be a troll, but "Past performance should not be used as an indicator of Future performance".

Not just a cell phone (3, Insightful)

Professional Heckler (928160) | more than 7 years ago | (#17559344)

This report fails to take into account the added capabilities of this phone. People will be much more willing to spend 300+ dollars on a phone from a company that has a impressive history in the mp3 player department. This is not just a phone. Remember that. Prof

Re:Not just a cell phone (1)

DilbertLand (863654) | more than 7 years ago | (#17559498)

But my 4-year old Pocket PC phone can do everything they claim, and much more. And it's over four years old! Of course I didn't understand why anyone would want the carry around a brick for an MP3 player (with few features) when the iPod came out (I already owned several other mp3 players when the iPod was announced). So, I'll probably be wrong again.

Re:Not just a cell phone (1)

Beryllium Sphere(tm) (193358) | more than 7 years ago | (#17559632)

>But my 4-year old Pocket PC phone can do everything they claim, and much more.

Can it run OS X?

Unless Apple has crippled the design somehow, this isn't an iPod phone -- it's a Mac Mini that fits into your pocket and makes phone calls. And has wide-area wireless networking, admittedly at ISDN speeds and telco prices.

Not exactly.... Steve lied on stage (2, Informative)

everphilski (877346) | more than 7 years ago | (#17559826)

According to Gizmodo and Apple VP's: []

The OS isn't going to be "OS X for real." It's more like a pseudo-OS X and, like the iPod, it will not have a public API and open development.

Unlike the Pocket PC which has open API's for development by third party people (like you and me ...)

Cingular Service plan will kill it (5, Insightful)

TrippTDF (513419) | more than 7 years ago | (#17559352)

If you look at Cingular's current plans for blackberrys, their voice and data packages start at about $80 per month. You can bet they will charge at least that for the iPhone service, if not more. even if it is just $80 a month, you are going to wind up paying $2520 over two years (including $600 for the phone), and that's before fees and taxes.

So that $600 price tag is really closer to $3000.

If Apple is really smart, they've already locked Cingular to a reasonable cell plan. They might be able to capture the high-end market with the iPhone, but without cheaper plans, they will never get the majority of people.

Re:Cingular Service plan will kill it (4, Insightful)

garcia (6573) | more than 7 years ago | (#17559602)

If Apple is really smart, they've already locked Cingular to a reasonable cell plan. They might be able to capture the high-end market with the iPhone, but without cheaper plans, they will never get the majority of people.

If Apple had been smart, they would have went to T-mobile (or Cingular) and worked with them to get a rate plan similar to the T-mobile branded Sidekick. $20.00/month for unlimited data and SMS with a phone plan or $29.99 without. You can't use the device as a modem though...

I refuse to pay the astronomical data plan rates that other providers offer. I especially won't go to Cingular after how I was treated during their switch from AT&T.

Re:Cingular Service plan will kill it (1)

Mysticalfruit (533341) | more than 7 years ago | (#17559904)

As for the modem thing, I wouldn't be suprised if it wasn't forth coming.

I can't imagine it would that hard to change the software on the phone to make it act like the business end of a USB ethernet adaptor... Since the phone has so much intelligence in it, you could have the phone manage all the ugly bits. For that matter since it supports wifi you could even have it setup so it could act as a WAP that would then route it's data through a cellular link and it would provide rendevous services, etc. Then you would have a simple applet that would run on the ibook that would allow you to manage the behavior (as well as the phone) for the gateway.

Re:Cingular Service plan will kill it (1)

x1n933k (966581) | more than 7 years ago | (#17559760)

True, if you look at Cingular data programs. iPhone does have Wireless and Bluetooth built into it. Why would I want to spend huge amount of internet time with Cingular when I can walk 5 minutes at the most in any direction and find a Wireless Cafe to get email or tap in to my companies network, or my home network when I am at home. The only 'hole' is while I would be driving. So really, I just need the regular cell plan.

Also, as the amount of devices like this increase we should see some drop in price. iPhone does look to piece together things the Treo, and Sidekick 3(huge with the deaf culture) have missed. Which are the only Devices I would consider buying outside a regular cell.


Re:Cingular Service plan will kill it (2, Interesting)

u19925 (613350) | more than 7 years ago | (#17559854)

Seriously! If Cingular is the culprit, then iPhone will die after Cingular dies and that ain't gonna happen soon. Besides, your point of $2500 for service proves that iPhone is even more worth it. What is $500 extra on top of $2500 (which you would anyway pay with Cingular)? Just 20% extra, and you get wifi, 4 G ipod.

Steve Jobs is a crack smoking ostrich fucker (-1, Troll)

Anonymous Coward | more than 7 years ago | (#17559362)

I saw it on TV. HOORAY!!!!1

Moderatoirs: WHY DO YOU HATE AMERICA? (-1, Troll)

Anonymous Coward | more than 7 years ago | (#17559624)

Why do you want to hide the truth? Jobs is a crack smoking ostrich fucker and I saw it on TV.

iPod story repeated (3, Insightful)

suv4x4 (956391) | more than 7 years ago | (#17559366)

I'm having deja vu reading this article and comparing it to very similar articles on Slashdot (for iPod) few years back.

I'm in the market for a cell phone (3, Interesting)

greenguy (162630) | more than 7 years ago | (#17559368)

...and the iPhone is exactly what I want. But I'm not buying it. It's cool, but it's not $500 cool.

I'll probably buy a cheap-o model and wait. Someone let me know when there's an unlocked model for $250.

Re:I'm in the market for a cell phone (1)

jdray (645332) | more than 7 years ago | (#17559510)

I'm waiting, too. []

Re:I'm in the market for a cell phone (1)

lakeland (218447) | more than 7 years ago | (#17559548)

I am, so of a sample of two that's a 50% market share...

I'll have to wait for it to come to NZ though... (which'll give me enough time to save up I guess ;-)

The 8GB limit is a big pain - Jobs was showing Pirates of the Carribean on the iPhone in his keynote. That'd take like 1/4 of the space on the phone!
Not that I have any sensible suggestions of what they should do about it.

Just like the iPod (1)

yttrium (88756) | more than 7 years ago | (#17559376)

Everybody always claimed the iPod was way too expensive, yet it kept selling even in the presence of other lower-priced competitors. With this thing, you get a full iPod and more, so the price isn't THAT unreasonable. ($100 difference between 4 and 8 GB is a bit much tho... the Nano's difference is only $50)

Re:Just like the iPod (1)

Joker1980 (891225) | more than 7 years ago | (#17559788)

I think your right, if it can do half of what they say it can then i would have no problem spending that. Its the 2 year contract thats killed my intrest

I think it's cool but ... (3, Insightful)

HappySqurriel (1010623) | more than 7 years ago | (#17559380)

Personally, I think the iPhone sounds cool but I will never buy one (or at least in the near future) ... There are two reasons why I dislike "do everything" or "convergence" hardware, usually the hardware is average or bad at every task and very expensive, forgetting (or losing) a phone/MP3 Player/PDA is bad but forgetting (or losing) your phone and MP3 Player and PDA is awful.

Something as small as having a touch screen to dial your phone, and display everything, means that you're either going to have to carry around a stylus (which you will probably lose) which will scratch your screen, or your screen will have fingerprints; either way it means images/videos/text will be hard to read.

Re:I think it's cool but ... (1)

avalys (221114) | more than 7 years ago | (#17559594)

Yes, but the nice thing about the iPhone is that it looks like it will be just as good at every task as an individual phone/MP3 player/PDA.

Re:I think it's cool but ... (1)

avalys (221114) | more than 7 years ago | (#17559728)

I don't know how how your brain works, but it's a lot easier for me to remember/keep track of a single device, compared to three devices. And are you really so forgetful that you're constantly at risk of losing the stuff you carry around with you? I hope you don't keep a lot of cash in your wallet.

Are you saying you'd really prefer to carry around a phone, an MP3 player, and a PDA? I don't even have enough pockets for all that crap.

Lame (-1, Redundant)

schiefaw (552727) | more than 7 years ago | (#17559384)

No wireless. Less space than a nomad. Lame.

Re:Lame (1)

b0s0z0ku (752509) | more than 7 years ago | (#17559446)

No wireless.

No 3G. It has WiFi, and open WiFi networks are ubiquitous in most major (and less major) cities. For other places, it still has EDGE/GPRS.


Re:Lame (1)

MightyYar (622222) | more than 7 years ago | (#17559520)

I think the parent was being funny, paraphrasing comments that were made about the original iPod.

Naww... (1)

mnemonic_ (164550) | more than 7 years ago | (#17559846)

Seriously, go check this out. They're going to print money with this thing.

Not enough information (5, Informative)

ivan256 (17499) | more than 7 years ago | (#17559388)

Quite honestly, we don't know enough about the device yet to make any informed commentary. We're going to have to deal with six months of analysts talking out of their ass about it, and Apple fanboys/haters blathering on about how wonderful/awful it is without more than a basic overview of its functionality and no hands on UI experience. The 'specs' from Apple are a joke, and don't reveal the most basic of needed information. The details of the restrictions that will be placed on the device by Cingular are completely unknown. Until those things are known, it could go in any direction.

Anybody who talks about what is going to happen with the iPhone in certain terms at this point is an idiot.

No phones good enough (3, Insightful)

zmotula (663798) | more than 7 years ago | (#17559426)

> Of 1,800 consumers surveyed, just 21 had spent more than $400 for a cell phone.

This could simply mean that there were no phones good enough to justify the higher price tag. I mean, is there a phone with a few GB of memory, big touch screen and really good software? What kind of phone can you buy for $500 right now?

Market share of iPod (1)

MightyYar (622222) | more than 7 years ago | (#17559428)

Not that one success guarantees many, but how large was the high-end mp3 player market when the $400 iPod was released? If they had made a business decision based on current market share, they never would have created the iPod at all. Clearly they think that a market can be created.

Here's the beauty of it (1, Interesting)

Anonymous Coward | more than 7 years ago | (#17559432)

People know about the iPhone now, and that it will be a widescreen ipod + phone and widgets and all, but they're disappointed about the 4GB or 8GB limited capacity.

A couple months from now, Apple will release a new video iPod with widescreen and touchscreen and no phone or widgets, with 60GB - 120GB capacities, and people will eat it up like candy.

I would.

Success will come a little later (5, Interesting)

pieterh (196118) | more than 7 years ago | (#17559442)

Apple tend to launch a product and then fork it into a product family that covers a nice price range. This format could expand to include a hard drive and become a real portable hand-held, the new Newton. It could also shrink to become a simpler phone. Expect the actual release model in June to have much more memory, and better battery life.

The biggest problem with all smartphones today is that UI design is generally terrible. If Apple can get this right, and make a family of phones that react quickly and are fun to use, they will sell a lot of them.

Further, it seems to me, phone or not, that this is what the iPod will look like in 2 years time. The wheel is no longer needed, and this format makes video a pleasant reality.

So it's quite possible that the "phone" part of this product is less significant than the large-screen, no-button, Apple-inside format.

Re:Success will come a little later (1)

b0s0z0ku (752509) | more than 7 years ago | (#17559690)

This format could expand to include a hard drive and become a real portable hand-held, the new Newton.

Why a HDD? HDDs are heavy, prone to mechanical failure, and suck power. For a handheld device, I don't think that you really need more than 10GB for data anyway - that much storage can be provided by flash. Even 5GB stores a lot of music, and movies/music could (will) be swapped as needed from a desktop PC. What may be nice is a powered mini-USB port so you can plug in an external HDD in a 2.5" shell. This should also allow the connection of a real keyboard for those that don't want to pay extra for Bluetooth devices.


iPod Overpriced (1)

whisper_jeff (680366) | more than 7 years ago | (#17559448)

I seem to recall comments that the iPod was overpriced and that Apple would never capture the market with it when there were other options with lower price tags. Hmmm. Sounds familiar, no?

Re:iPod Overpriced (5, Insightful)

Protonk (599901) | more than 7 years ago | (#17559796)

Exactly. The key complaint about the iPod was that it was too expensive. That no one would buy one when they could have a Creative r579X250 or whatever instead. i'm amazed that these complaints KEEP showing up. Apple is in the business of selling people hardware/software combos at a premium. it is WHAT THEY DO. The powerbook and ibook lines were both much more expensive than the direct competition, but they sold poorly when the software/hardware mix was diluted or uncompelling (early/mid nineties) and exceptionally well when the mix was more distinct

The iPhone will be the same way. This isn't apple fanboyism, this is grudging respect. look at the iPod. look at the cheif complaints about mobile phones in general. Not the slashdot complaints, but the complaints among the predominance of users.

1. Poor UI
2. Poor or shoddy design.
3. inability to use features on the phone, or limitations on the interoperability of those features.

Apple fixes these problems for a living. They fix them and then establish the solution at a high pricepoint, and people pay for it. No. it's not going to be unlocked, it's not going to run linux, it's probably only going to support limited software development, if any at all. But people will buy it, at least 10 million people, if not more.

I am sure the iPhone will be very successful (1)

93 Escort Wagon (326346) | more than 7 years ago | (#17559462)

However, I have no plans to buy one. I do want an iPod that's just like the iPhone, though... minus the "Phone" part.

This phone has nothing new (1)

Utopia (149375) | more than 7 years ago | (#17559464)

Phone with music with browsing features is nothing new.
It might have cuter iterface but all of the features are already available for a much lower price.
For me this Phone doesn't have any new must have features.

I usally just remote desktop to my home computer from my phone and access my personal email, schedule tv recordings etc.

Re:This phone has nothing new (1)

99BottlesOfBeerInMyF (813746) | more than 7 years ago | (#17559864)

Phone with music with browsing features is nothing new. It might have cuter iterface[sic] but all of the features are already available for a much lower price.

Portable devices that play digital music is nothing new. It might have a cuter interface but all the features (of the iPod) are already available for a much lower price.

Do you see why your argument does not convince me that the iPhone won't sell like mad? I don't like any cell phone I've ever owned. They are crap. My current one takes 10 key presses to select and call a person in my pre-programmed numbers list. All the handhelds I've tried have been clunky and hard to use. I don't own an iPod because I don't think I'd carry it with me. I had no expectation I'd want one of Apple's new phones especially since I guessed the price would be about $600. When I saw this in action I checked how long I have left on my cell phone contract. Hopefully they will put out a gen2 version about the time I'm ready to buy. I don't mind spending $600 for a phone that actually does what I want, easily. I'm sure I'm not the only one.

Apple uses a different approach (0)

Anonymous Coward | more than 7 years ago | (#17559470)

Apple doesn't chase existing markets, it creates new ones:

"Apple was more interested in defining markets than trying to catch other companies that were busy trying to create a market for questionable products." - Steve Jobs

Also, Apple doesn't do market research (they believe - perhaps justifiably - that they can dictate to the consumer what the consumer really needs):

"I can't think of a comparable company that does no--zero--market research with its customers before releasing a product." - Lev Grossman

That's because they're surveying the wrong people (4, Insightful)

Frag-A-Muffin (5490) | more than 7 years ago | (#17559480)

Think about it. Most people who buy phones just want a phone that works. That's not the market Apple's going for. They're going for the guys that keep upgrading their expensive iPods with more expensive and newer iPods. Now, they'll get the latest "iPod" but it'll have a phone built-in too. If you look at the sales of the most expensive iPods, you'll see that there's more than enough people there to get Jobs' 1% market share that he wants out of the gates. Don't underestimate the loyalty that the Apple brand garners. It's much like Nintendo's. They'll buy whatever is the latest and greatest.

It's not about how many they sell today (2, Insightful)

ghuytro (917208) | more than 7 years ago | (#17559484)

And how much was the ipod when it first came out? Wasn't it viewed as a "high end" MP3 player compared to players like Rio etc.? How about the historical price progression of flat panel TV's?

Cutting edge products like this always start out on the low end of the demand curve at high price points. Over time, prices come down and demand picks up.

The key right now is not how many can Apple sell, but can it win the competitive battle in the Swiss-phone market so that when the time comes where price and demand are more properly aligned, it has the mindshare of the market as being the product in the market to buy.

It's just like the progression with the ipod really.

Deja Vu (1, Insightful)

Anonymous Coward | more than 7 years ago | (#17559526)

Just like how the iPod was initially only for the high end market, right? When Apple released the ipod, it created new demand that didn't exist before and didn't show up in the data. People didn't want "expensive," high end music players simply because they were hard to use an inaccessible. Apple fixed that and created new customers many times over.

No amount of two-bit analysis predicted that expensive HD-based players would blow up as they did. Apple showed these "analysts" that they were morons.

The iPhone will do the same.

Cingular (2, Interesting)

b0s0z0ku (752509) | more than 7 years ago | (#17559554)

For $500-600, it better not be locked to Cingular. That would suck if you wanted to travel abroad and use a non-Cingular SIM rather than paying Cingular's extortionate international roaming rates. I'd rather wait a few months for the unlocked or grey-market models to show up on EBay. If I have to pay $150 more for one, that's fine too. But, honestly, even $500 is too much for me to pay for a phone. If Cingular were smart, they'd offer it for $250 and add $15/mo for "Apple phone service" to the regular voice/data plan. Basically a stealth payment plan over two years.


Re:Cingular (1)

winkydink (650484) | more than 7 years ago | (#17559622)

$500-$600 is for a locked phone with a 2yr contract. Even after a few months, unlocked ones on eBay will be over $1000.

Re:Cingular (1)

b0s0z0ku (752509) | more than 7 years ago | (#17559746)

$500-$600 is for a locked phone with a 2yr contract. Even after a few months, unlocked ones on eBay will be over $1000.

I suspect that used unlocked phones will be down to around $500 within a year. Which is about the time when Apple will have finally released a debugged version of the OS.


Almost tempted (0)

Reality Master 101 (179095) | more than 7 years ago | (#17559558)

Up front, I admit that I despise Apple as a company. I hate their lying, I hate their arrogance, and I hate how they abuse their customers.

However -- when I saw the iPhone, I was really tempted. Finally Apple may have a made a product that appeals to me, and doesn't have the stink of arrogance around it (e.g., Steve doesn't like radio, therefore, no one else will get radio on the iPod).

Until the details started leaking. No replaceable battery??? WTF??? I'm supposed to throw it away after a year when the battery dies?

No third party development tools??

Lock-in to only one cellular provider? Not surprising from the company that locks you into their hardware, but... what the hell?

-sigh- Same old Apple. Same old arrogant stupidity. Same old nuggests of good ideas packaged in a screw-the-consumer package.

Uhh... (1)

cca93014 (466820) | more than 7 years ago | (#17559586)

The survey is not really asking the right question. People generally don't spend 500 bucks on a phone because there are no phones out there with 8GB of flash memory and an iTunes client as standard. People in the UK are fairly happy to drop 100/200 quid (3-400 bucks) on an HTC Tytn variant...How much did a top end Palm used to cost before it had an aerial?

They Won't Be Able to Make Them Fast Enough (0, Redundant)

repetty (260322) | more than 7 years ago | (#17559616)

Apple will not be able to manufacture enough of the iPhone to meet demand, probably for a pretty long time. Mark my words, Google.

The eunuchs -- I mean critics -- can employ all the reasoning they like. If they were so damn smart the iPod would have been discontinued years ago.


my spin beat up your spin (1)

wardk (3037) | more than 7 years ago | (#17559620)

well, of the 4 people I know personally who are aware of this thing, all 4 want it NOW.

people are infatuated with their devices, once this hits, it's gonna be a hit.

it's gonna have 1% of the market quicker than apple would be willing to predict

I heard itunes sales were "down", did the iPhone downer info come from the same spin machine?

Cisco is gonna love their cut, expect it to be bundled with routers

Hi end market? (1)

oliverthered (187439) | more than 7 years ago | (#17559634)

it's not even 3G let alone high end.

In the UK it's not uncommon for phones to cost over £550/$1000 (cell companies usually spread this out by giving you a 'free' phone so long as you stay in a £40/$80 a month contact for 18 months cosign a total of £720/$1400)

The I-Blackberry (1)

smittydc (1042126) | more than 7 years ago | (#17559636)

I'd like to see apple come out with a simple phone: huge battery, huge antennae, a quality speaker/mic, and one of their great interfaces. Then I'd buy it. I give them credit for coming up with a nice all-in-one... but I have no need for it.

Kind of a short sighted view.... (4, Insightful)

8127972 (73495) | more than 7 years ago | (#17559638)

1. Apple releases iPhone 1.0 (ApplePhone after Cisco gets through with them?) in 4GB and 8GB sizes
2. Apple Fanboys will buy this version because "17 50 7074||y ru|35 4nd w1|| pwn 7h3 m4rk37 dud3!"
3. Apple will release version 2.0 with way more storage (1.8" hard disk or SSD) for half the price. This will happen in about 18 months, But not actually ship for another 4 - 6 months after it is announced. (so as not to piss off Cingular)
4. Joe Sixpack will buy that version in droves. Fanboys who have version 1.0 rush to upgrade because "17 50 7074||y ru|35 4nd w1|| pwn 7h3 m4rk37 dud3!"
5. Profit!

Regular people don't buy smartphones (5, Insightful)

duffbeer703 (177751) | more than 7 years ago | (#17559654)

Businesses do.

Except for gadget geeks, probably 80% of the Blackberrys, Treos, etc are purchased by companies for employees or by business owners.

Apple is hoping to extend that market by taking a typical consumer/parent who is about to buy a $300 iPod anyway and convincing them spend another $200 for a phone that has unique internet capability. The reasoning behind this is that a person who is ready to by a $300 device is far more likely to spring for a $500 device.

The typical phone buyer considers the phone to be almost disposable. If you come into a store to buy a $50 RAZR after rebate, you're not going to get them to spring for $499. So Apple is taking advantage of the iPod buzz to upsell iPod consumers (the average iPod buyer has already owned 3) into iPhones.

This is sales 101. That's why half the people who show up to buy a Toyota Corolla drive away with a Prius. ("Hmm... $5000 more and I have a hybrid AND get bluetooth and that neato screen")

On the flip side, they'll get businesses to buy some too. Enterprises will stick with Blackberries because they use Exchange and like the security aspects of the device, but there are plenty of mid-level managers with purchase authority to spend $500-600.

The lack of buttons will haunt it (1)

bheer (633842) | more than 7 years ago | (#17559918)

> Businesses do.

Well, about businesses, as David Pogue pointed out, typing on this thing is hard. It seems it's going to be hard to touch type on this, and if you've sat through 3 hour meetings, you'll know that under-the-table typing is _the_ killer app for Blackberries.

And let's not even get started about IT grumbling about getting music-and-video devices for employees...

Release (2, Insightful)

certel (849946) | more than 7 years ago | (#17559656)

Honestly, I really hope that Apple released the device without a ship date to pay attention to additional requests. No Camera flash/zoom? Maybe they'll go back and add it. No GPS? Maybe they'll release an option for GPS. Who knows, but I hope they're paying attention.

I think they'll do it (5, Funny)

Azathfeld (725855) | more than 7 years ago | (#17559658)

If anyone knows how to achieve a 1% market share, it's Apple.

iPhone will be fine, and Apple will keep the name. (0)

Anonymous Coward | more than 7 years ago | (#17559666)

"The action we've taken is about protecting our brand," said Mark Chandler, Cisco's general counsel.

Brand? Who outside of people who are IT professionals even know what Cisco actually makes? Brand?

My parents only know about Cisco because they got burned by their stock plummet in the late 90's. They have no idea what they do except that its some kind of "buy the infrastructure" stock play. And doesn't the iPhone name gets at least "a little" of its positive connotation because of iPod and iMac? So whose brand is it anyway?

As for selling enough, its an iPod, a phone, and an internet communicator. An iPod, a phone, and an internet communicator. An iPod, a phone, and an internet communicator. Are you getting it?

(reactivate reality distortion)

My friend summed up the market like this. (1)

iOsiris (944032) | more than 7 years ago | (#17559680)

I'd rather buy a PS3 than an iPhone with that money.

Competing with blackberry? (1)

plopez (54068) | more than 7 years ago | (#17559694)

I've never had a blackberry, but how does it stack up against a blackberry? A high end blackberry can cost 700 USD (based on a quick web search) so if this is thier target market then it may be viable.

Re:Competing with blackberry? (1)

winkydink (650484) | more than 7 years ago | (#17559878)

$700 for what? A brand-new, unlocked Blackberry 8100 (aka Pearl) can be had on eBay for $400. That's $400 for an unlocked phone with no contract, versus iPhone's $500 for a locked phone and a 2yr contract.

Cost of moving technology forward (2, Insightful)

terrible76 (855014) | more than 7 years ago | (#17559696)

Apple has always cost more because they take the risk of using modern technology and open a new market. Most critics said the iPod would never sell because it was too pricey but there was a need for the product. Now with digital media players costing $200 to $300 dollars, iPod and other audio devices another $200 to $300 and smart phones again are in the $200 to $300 market it makes sense that a product that combines the three will be priced at $600. But this doesn't mean anything. How many people bought the first iPods? The iPod took off on the third Generation three years after the iPod was introduced. The phone changes the technology and will start us on a new course. The question isn't if you will or can afford the product now? It is more of a question will this product change the way we communicate? And only the fools will by the first generation especially when Flash based memory is increasing in size and the costs and functions of these devices will only increase with time.

1% of the market (5, Insightful)

mfender9 (725994) | more than 7 years ago | (#17559702)

Of 1,800 consumers surveyed, just 21 had spent more than $400 for a cell phone

Well, that's more than 1%...

A Superior Device Already on the Market (1)

MBraynard (653724) | more than 7 years ago | (#17559718)

I really liked the Apple product. I don't care for any other Apple products. It is pretty promising. But I dislike a few things about it - no GPS, looks like it's locked into a certain provider, and lacks a thumb keyboard.

I am now using the second generation of what is a much superior device: the HP Ipaq HW6945. []

It is also available for $500 with a contract from Cingular. You will probably also want to ditch the GPS software it comes with in favor of TomTom 6.

It's camera isn't as good (though it does have a LED Flash) and it's screen isn't as large, but the screen is still fairly large. With miniSD cards you can have a LOT of space and swap the cards easily between your reader to get video over to it. You can also stream audio (and presumably video) over either wireless or EDGE.

Love or hate WM5, there are many, many 3rd party apps for it. And it has a keyboard which I am grateful to have in exchange for the somewhat smaller screen.

Granted, the processor is a little wheezy, and hopefully the third generation of this device will be even better. The GPS is awesome as it seems to get signal even when I am in my office with the blides closed. And since I am almost always in the car when I have the GPS the battery drain isn't an issue.

This type of FUD Benefits Apple (1)

CaptScarlet22 (585291) | more than 7 years ago | (#17559730)

I love how all this "FUD" tells how bad the product is or what's wrong with the device before any of it has hit the market.

This can ONLY help Apple to fix things before they sell it. Apple has about 5 months to smooth it out, you know.

And I think the price is just fine for what it offers.

People have no problems spending money on a P3 now, this wont be any different.

aspirational product (1)

Marsmensch (870400) | more than 7 years ago | (#17559740)

It seems to me Apple are trying to create an elite product people will aspire to own, and plans to capitalize on that position when they introduce cheaper versions with more limited features, kind of like ipod minis and shuffles really hitch a ride on the demand for "full blown" ipods.

The iPhone is just a smokescreen (5, Interesting)

Dzimas (547818) | more than 7 years ago | (#17559758)

Here's a bold prediction: The iPhone that Apple Inc. introduced yesterday won't be a runaway success. It will never sell tens of millions of units, nor is it intended to. In reality, it's a flagship product intended to define the high-end of Apple's new ultraportable media computer lineup. Let's face it, the classic iPod has reached the end of its natural life. Even the most recent fifth generation iPods are showing their age. The screen is small, the OS extremely limited. To make things worse, Apple's competition has been nipping at their heels with rapidly improving devices such as SanDisk's tiny Sansa [] flash players and the Creative Zen Vision:M [] .

The iPod line needed a reboot, and the iPhone was splashiest way to do it. In fact, this device is the logical evolution of the Newton MessagePad [] . Think about it. Apple realized that boring contact lists, calendars and handwriting recognition won't encourage the Unwashed Masses to adopt portable computers. People are far more media-centric than that.

The rejuvenated iPod lineup will tempt you with music, movies and games, while offering an addictive combination of go-anywhere Wi-Fi browsing and email. And you can bet that Apple is planning to open up third-party development as quickly as possible.

As for the iPhone device, the bleak reality is that it is slightly larger than a 5G iPod. Too big to slip into the pocket of my jeans, which means it's too large to use as my everyday phone. My hard drive-equipped iPod usually lives in a messenger bag on my shoulder or in a jacket pocket, simply because it's too bulky to function as an "everywhere" communications accessory. I wouldn't be willing to carry something as large or expensive as the iPhone with me everywhere I go. I'd look like a dork with my calculator on a belt clip. Besides, mobile phones are expensive enough to begin with and many people (especially students) will balk at the idea of committing to a 2 year $1000+ mobile voice/data/voicemail contract after shelling out $599 for the iPhone itself.

No, the real magic will happen when Apple releases a $299 version of this device - the next generation iPod - that retains everything but the GSM + EDGE phone technology. At that point, the iPod will be perfectly positioned to become everyone's favorite teeny-tiny ultraportable computer.

Why not just a handheld version? (1)

vhogemann (797994) | more than 7 years ago | (#17559798)

Why Apple didn't released a version without the phone?

I mean, maybe there's a bigger market for cellphones than for handhelds... but I still feel that Apple could released it as the high end version of iPod Video, and included a hard drive.

IMHO there's a good chance that this will happen eventually. I just don't understand why they went for the Phone first...

Also, I'm wondering what will become of Palm... up until now it have faced competition from PocketPC devices only, and while Windows Mobile has it's merits Palm had some advantage due it's simple interface. But now that Apple entered on the handheld marked again it will be much more difficult to keep their market share.

What do you think?

Analyst Logic (1)

HertzDoesMatter (1025281) | more than 7 years ago | (#17559804)

So 1% of people surveyed essentially said they'd buy an expensive phone.... Apple is targeting 1% of the market..... DOOMED

Comparing products in the same functionality range (1)

aaroneous88 (809876) | more than 7 years ago | (#17559808)

The problem is that the article is talking about prices for merely cell phones and not smartphones. Most people who want just a phone don't want to spend the extra cash on features they don't need. I'd like to know how many people spend more than $400 on a smartphone specifically, not just on phones in general. $500 is not an abnormally high price for a smartphone.

Business Acceptance (0, Troll)

Greyfox (87712) | more than 7 years ago | (#17559818)

I could see a lot of businesses going for these, especially if you can run SIP software on them. Set up WAPs in the company and configure the phone so that when your salesman walks in the door his phone registers on the company asterisk server. Use the company phone system while in the building and only route to the cell phone when the guy's not in the building. It'd probably save a ton on cellphone bills -- our salesguys are ALWAYS on their cellphones and you KNOW the company pays those bills.

Between that and not having to shell out for desk phones or wiring the building for them (for new installations) they'd more than pay for themselves.

Why Why Why a Combo Device (Only)? (1)

DCheesi (150068) | more than 7 years ago | (#17559852)

Ever since the leaked rumors about a widescreen, touchscreen Video iPod, I've been drooling over the possibilities. But that was when it was assumed to be a high-capacity Video iPod, totally separate from the also-rumored iPhone device. Now it looks like the only way to get that snazzy new screen is with a low-capacity hybrid phone, with an expensive exclusive service contract to boot?!

IMHO that new screen is being wasted, since you'll never be able to fit any kind of video library on it. I would much rather have seen the Touchscreen and the iPhone as two separate products; or at the very least, give us a non-Cingular-enslaved Touchscreen option at the same time...

It could be worse (1)

Billosaur (927319) | more than 7 years ago | (#17559858)

Apple could be trying to market the ZunePhone.

technology coup / showcase - not a volume device (1)

jaypaulw (889877) | more than 7 years ago | (#17559862)

IMO The iphone is not likely to be a volume device like the $199 ipod that is their best seller or like a $49 after-signing-your-life-away RAZR. Take away the subsidy and you're talking about a $799 device. It is too specialized (phone + GSM contract from a US carrier + widescreen ipod = reduced number of customers) and expensive to meet the needs of everyone who otherwise wants to buy new apple stuff for themselves.

I think what Apple has basically done is throw down the gauntlet to say, "see what we can do? No one else is even close." It's like the Intel switch - totally amazing from a tech point of view and creates stakeholder buzz and props the shareprice and leaves the impression that apple can do anything they want to do at any time.

I'm blown away and I have zero plans to buy one.

No replaceable battery???? WTF? (1)

zerofoo (262795) | more than 7 years ago | (#17559906)

Are these guys nuts? Remember the Treo 600? Everyone griped about the lack of a replaceable battery. Lithium ion batteries need to be replaced periodically. The batteries in the iPhone will definitely need some sort of service within the 24 month contract that Cingular will require with the iPhone.

My last PDAs (Treo 650, Treo 700, and current Motorola Q) all have replaceable batteries, and they get used quite often. It's nice to be able to switch out a battery when you need it.

I guess the non-replaceable battery design drives iPod replacement sales, but that design feature will hinder the useful operation of the iPhone.

Wait for rev 2 or rev 3. This one is going to be painful.

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