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Apple’s iPhone: 8 important issues

1. On Apple’s new Avatar as a Consumer Electronics Company

About the move from the office to the drawing room - there are challenges ahead:

The margins in consumer electronics are 20% and below.
According to CNBC, Apple enjoys a profit margin of 25% on the iPod and 30% on Apple PCs.

I was watching CNBC’s coverage of the iPhone launch and an analyst informs that he is more interested in Apple’s capture of the PC market, it has currently increased its market share to about 4%.

How Apple transfers its brand aura to the consumer electronics remains to be seen.
The iPod’s 5-year run will help matters – many will know the Apple brand this time around.

Apple will have to come up with a mix of Nokia’s ‘design + reach’ philoshophy and someone like Bang & Olufson/ Bose type ‘Nichiness’.

2. On the iPhone revolutionalizing the mobile phone business
You remove the keypad and make it thin - where is the revolution? Maybe they are talking about the Sleek looks.

I know shares of Motorola (Cingular was a big buyer of Razr phones), RIM and others went down as news of the iPhone’s launch came out, but these are early times.

There were Mp3 players before the iPod. There were phones, 'phones- cum -music -players -cum- touch screen interfaces' before the iPhone. Nokia already has many phones with Wi-fi.

I will call it a revolution if the iPhone changes people's usage of the music phone. The iPhone will be a revolution if it sells in big numbers, without Cingular's support, in countries all across the world.


3. Is it a Smartphone?

Applications from third parties are not allowed. So, for the moment, no RSS reader.

Engadget doesn’t think so as only Apple can add new application to the iPhone. On the other hand Jupiter analyst Michael Gartenberg says that in the United States already many carriers lock their smartphones, only allowing "trusted" applications to be installed.

4. Moving beyond Cingular and the U.S.
Cingular is at present North America's largest cellular network. Verizon, the number 2 player with 57 million customers won’t bite Apple’s offer as it runs its own iTunes’ like Vcast Music download service, based on Microsoft platform, launched this time around last year.

Apple needs to unlock the iPhone and come up with some crucial add-ons for a quick entry into the Asia and European market, which are more mobile savvy than the United States. I can tell you that many of my friends heard about the Apple brand only when they saw the iPod.

5. Apple should focus on addressing the needs of business users

RIM has a good grip on the corporate market and is a good role model to follow in the Mobile market. RIM has done well in a niche market and making money with its E-mail service on mobiles.

At present, iPhone has no support for Microsoft documents and MS attachments. Support for MS Exchange is either unclear or missing.

6. Wifi over 3G?
By not supporting 3G at the moment, Apple recognizes the growing importance of Wifi in the mobile market. Wifi, along with Wimax, Bluetooth and VoIP promises to free users from the clutches of carriers.

Wired says:

it would have been far better if Apple had taken on the carriers' chokehold on handset provisioning wholesale, and simply sold unlocked phones.

7. iPhone vs.the UPMC
The UMPC, ultra-mobile PC with 7-inch screens is based on Windows XP and was launched via a viral campaign in Feb 2006. The project was codenamed Project Origami

The only UPMS launched till yet is Samsung Q1B, which has 3G internet access, 32 GB solid-state hard drive, and is priced at $ 900 which is a killer. At that price point, people are better off buying laptops. The iPhone’s $499/$599 pricing is a start in the right direction, but Apple will have to come up with add-ons and improvements quickly.


8. Issues with Hardware and Accessories
The iPhone has the same old built-in, non-user-serviceable battery, like the iPod. Would it hurt Apple’s ‘design aesthetics” to go in for a Nokia-like Lithium battery?

I suspect we will to buy expensive QWERTY keyboards from Apple later on when Keyboard is added later. A keyboard-less world is still some while away.


As usual, detailed coverage of the iPhone's launch is over at Gizmodo and Engadget.

posted by Pramit Singh @ 2:52 PM