The iPhone a flop? Let's wait and see

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Last week, CNET editor Michael Kanellos penned an interesting column predicting the failure of Apple’s ( allegedly ) upcoming “iPhone.” This is the tech toy so many pundits, blogs, and Web sites have been hemming and hawing about for a couple years now. You know, the one that doesn’t even exist yet (at least not officially).

Let’s put aside, for the duration of this blog post, the fact that Mr. Kanellos is writing the obituary of a product that hasn’t even been announced. It’s little more than a rumor—a twinkle in the virtual eye, if you will, of gadget-lusting Web sites. (And to be fair, there are many, many pundits out there speculating on this speculative gizmo.) Let’s assume, just for a moment, that Apple really is planning on releasing an “iPhone,” a combination of a mobile phone, portable media player, and, possibly, a PDA. Will it be a big hit? Hugely successful? Who knows. I personally think it’s unlikely such a product would approach the popularity of the iPod. But I don’t think it would do nearly as poorly as Kanellos predicts.

The basic premise of his argument is that this mythical gadget will be a flop because the mature mobile-phone market is not the young MP3-player market. More specifically, the iPod was successful because when the first model was released, the competition was either too small (in capacity) or too big (in physical size) and suffered from poor interfaces—the iPod provided solutions to all three issues, and the rest is history. The mobile phone market, on the other hand, is quite mature, with many quality products that include solid feature sets, small sizes, and good interfaces. These phones are currently competing viciously for your hard-earned dollars, and it would be into this already-saturated market that an “iPhone” would dive.

In other words, when it comes to mobile phones, so the argument goes, Apple doesn’t have the same opportunity to refine the market. Instead, the company is hoping that it will sell gobs of phones based solely on the fact that the “iPhone” comes from “the iPod company.”

There are three problems with the above argument. First, Kanellos is quite presumptuous about Apple’s lack of effort and expertise. Does he really believe the company would invest ungodly sums of money entering a new market based solely on the belief that just because the iPod dominated the portable-player market, the company can do the same in another market? Would Apple release such a product without putting lots of research and talent behind it? (Evidently so: “the entire strategy…is based on what I call ‘iPod magic.’ Apple succeeded with the iPod, the theory goes. Therefore, they can break into other categories and turn them upside down.”) I think not.

Second, Kanellos assumes that today’s phone interfaces are very good. They’re not. They work, and the techie crowd learns them fairly quickly, but most phones aren’t that easy to use for tasks beyond finding and dialing numbers. And when it comes to syncing your phone’s information (contacts, calendars, etc.) with your computer, few phones work as well as an iPod syncs with iTunes. So I think there’s plenty of opportunity for someone—anyone—to improve mobile-phone interfaces and phone/computer syncing.

Finally, Kanellos’ theory is based on the premise that Apple’s “iPhone” will be just another mobile phone. If the rumors are true, it’s more likely to be a combination of a mobile phone and a media player—something that no phone vendor has yet done well. Sure, some have tried, and plenty of people currently own phones that can play music files, but when it comes to actually listening to music, most people put their phones away and get out their iPods. (I say this as someone who’s been using—and likes— Sony-Ericsson’s W800, one of the best music-playing phones on the market.)

The problem with these current “media phones” is ease of use and features. As I wrote a couple weeks ago, there’s demand for a phone/PDA/player combo, but for such a device to be successful, it has to provide most of the features of the best standalone products while retaining the ease of use of each. Kanellos touts the design expertise of Samsung, Motorola, KDDI, and Sharp, but none of these companies has yet gotten such a combination right. Apple, on the other hand, has a proven track record when it comes to taking gadgets and making them easy to use. It would be a mistake to count out the company’s efforts before they even get a chance to impress us.

Will Apple come to dominate the mobile-phone market? Probably not; as Kanellos points out, correctly, there are too many players firmly entrenched for Apple to step in and take over. But I don’t think the company’s chances of being successful are as bleak as he predicts—as long as you define “successful” the way anyone else in the market would, rather than relative to the iPod’s phenomenal popularity.

Now how about we wait until some kind of “iPhone” is actually available and see what happens? (That includes me: I’ll do my best not to take further part in the pre-release, pre-announce, pre-we-know-it-actually-exists speculation.)

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