Back in January, Steve Jobs unveiled the iPhone at Macworld Expo to thunderous applause and heightened expectations. In the ensuing six months, the hype surrounding
Apple’s mobile phone
hasn’t abated—if anything, it’s hitting new level as Friday’s 6 p.m. release time draws closer.
Take this assessment from Mark Donovan, senior analyst at mobile industry research firm
M:Metrics: “It’s really a game-changing device. This iPhone mania will permanently change expectations and the way we look at these types of devices.”
And the funny thing is, Donovan might be understating things.
outside of the Apple and AT&T stores that will begin selling the iPhone Friday evening. That sort of scene is not uncommon for consumer electronics devices, but not for mobile phones. Rival handset makers and service providers
are taking notice as well
—all in response to a device whose mobile phone, multimedia playback, and Web-surfing capabilities are available in some form or another from other products.
The difference? The iPhone combines all those features with an interface from a company known for its simplicity.
That creates what Donovan calls “an interesting dynamic” for the rest of the mobile device industry. “This is absolutely going to force the hand of the other big operators,” he said. “There is an opportunity here for them to bring more innovation to the table.”
Those are heady expectations for a product quite unlike anything Apple’s ever shipped before. Even the iPod—Apple’s most recent landscape-altering product—didn’t debut to this kind of scrutiny.
Then and now
While we’ve had six months of build-up to Friday’s iPhone launch, the iPod hit the scene in late 2001 under decidedly different circumstances. The music player was unveiled at a
at Apple’s Cupertino, Calif., headquarters. Industry watchers were intrigued, but skeptical about the iPod’s chances for success,
especially at the prospect of paying $399 for a music player. Apple had the last laugh, selling its
100 millionth iPod
earlier this year.
The iPod’s runaway success is doubtlessly fanning expectations for the iPhone, though it’s important to remember that these are two very different products entering their respective markets at very different times. When the iPod debuted, there were other MP3 players on the market; however, most featured clunky interfaces and awkward integration with computers. The iPod introduced an easy-to-control scroll wheel and unparalleled hardware-software integration.
In contrast, the iPhone enters a fairly mature market. Industry analysts peg the worldwide market for cell phones at 1 billion sold in 2006. At
the iPhone’s January unveiling, Steve Jobs said Apple hoped to capture 1 percent of that market—10 million phones—by the end of 2008.
That number may be on the conservative side, analysts say. “I have a hard time believing Jobs would state a number he wouldn’t blow through,” said Donovan, adding that getting to that number will demand distribution outside of the U.S. Apple plans to expand the iPhone to other markets in 2008.
Michael Gartenberg, vice president and research director at
JupiterResearch, agrees. “Meeting the 10 million would be huge,” he said. “If they are firing on all cylinders, that may be a very low number.”
According to M:Metrics, there are more than 7.2 million smart phones in the United States; almost 9 million users listen to music on their mobile device. Given the
iPhone’s voice, music, and data capabilities, those people figure to be squarely in Apple’s sights.
So how does Apple capture those users and hit its 10 million iPhone sales goal? It has to meet expectations, which is why you’ve seen the company roll out
a series of videos, seemingly daily, to give users a better idea of what the iPhone can and cannot do.
“Apple has done a good job of keeping expectations in check,” Gartenberg said. “Nobody that buys this thing will have any unreasonable expectations— [Apple has] been very clear about what the functions are and how they work.”
Avi Greengart, principal analyst for mobile devices at
Current Analysis, said Apple is being very reasonable with setting expectations for what the iPhone will do.
“Apple is letting the iPhone sell itself—that shows a high level of confidence,” said Greengart. “There are other products on the market that are cool, but they aren’t fun—they make you feel old. The iPhone is cool and fun.”
But at the end of the day, the “cool” factor only carries you so far. What people will expect is a phone that can handle all the calls, e-mails, SMS messaging, and Web surfing that they do during the course of a typical day.
“Is this device going to be the workhouse that people expect from a phone?” M:Metrics’ Donovan asked. “The iPhone is one of the biggest technical challenges the company has ever faced.”
Beyond the hype of this opening weekend of sales, it will take time to figure out if the iPhone is a financial windfall for Apple. But it’s clear even before the first phone lands in the hands of eager consumers that the iPhone will leave a mark on the mobile industry.
“It’s a market people have been begging Apple to get into for years because they are not happy with their devices,” said JupiterResearch’s Gartenberg.
Donovan said one change introduced by the iPhone that’s likely to benefit consumers over the long haul is the phone’s interface. While familiar to Mac users, general consumers might find it to be a pleasant surprise.
“One of the hallmarks of Apple’s approach is their decision to leave things out of products,” said Donovan, pointing to the simplicity of other Apple offerings. That lets people feel comfortable using the products.
Greengart of Current Analysis takes Apple’s implementation of the iPhone interface even further: “Whether it’s successful or not, the expectations for a user interface on a mobile phone have been changed forever.”
Jim Dalrymple is news director of