Get ready for the summer of Apple

news analysis Apple is preparing for one of the most pivotal summers in its history.

On June 29, the company is expected to release the iPhone, perhaps one of the most hyped gadgets in history and a clear sign of where CEO Steve Jobs is placing his bets. At Apple--in case anyone still needed reminding after Jobs & Co. dropped "computer" from the company name--people are thinking about a lot more than laptops and desktops.

"Apple isn't just a hardware company, and they aren't just a software company," said Stephen Baker, an analyst with NPD Group. "I think that's what's enabled them to be more successful in endeavors that are away from their core business."

The touch-screen phone has been the talk of both the cellular and PC industries since Jobs unveiled it on stage at Macworld in January, and competitors are likely to respond later this year. But before it gets to the iPhone launch, Apple will pause next week to shift the spotlight back to its core Macintosh business.

On Monday, Jobs is scheduled to give the keynote at the Worldwide Developers Conference in San Francisco. Events such as WWDC are extremely important to Apple's developers, but tend to be overshadowed by the more consumer-oriented Macworld and other special product shindigs, such as last year's "showtime" event.

Indeed, WWDC is expected to be dominated by Apple's Leopard OS, just like last year's event. Developers will walk away with a near-final copy of Leopard, and Jobs is expected to provide further details on some of the features inside the new release. Apple does not plan to ship the final version until October.

While Leopard is certainly important to Apple's developers, the rest of the world is likely to be looking for any new nuggets Jobs reveals about the iPhone. The iPhone, analysts argue, is more than just a new product for Apple. It's an entirely new business that, if successful, will give the company three distinct product lines--Macintosh computers, iPods and the iPhone (not to mention a smaller fourth line, the Apple TV)--to maintain Apple's strong growth.

The attraction of the phone market to Apple is clear: mobile phone makers are shipping more than a billion units a year, and that figure keeps growing. Jobs has said he'll be satisfied if the iPhone has 1 percent of the market by the end of next year, somewhere around 10 million units.

"Wherever they go with the iPhone, Mac OS X is going to follow them."

--Stephen Baker,
analyst,
NPD Group

The smart phone market, in which the iPhone will compete, however, is considerably smaller than the overall market. About 81.3 million smart phones shipped last year, according to iSuppli, which defines smart phones as "handsets with an open OS (like Windows CE, Symbian, Linux), which allow functional expansion of the device through sophisticated add-on applications such as personal information management."

The iPhone runs Mac OS X and Jobs promises it will deliver the "full Internet" to a mobile phone. Moreover, he said, at the January Macworld conference: "We have reinvented the phone."

It's a bold claim, and iPhone's success is not a slam dunk. Unlike the iPod's introduction in 2001 when other companies were shipping MP3 players but no one company had strong control of the market, the smart phone business is served by well-established, deep-pocketed players such as Nokia, Research In Motion and Samsung. And unlike the PC industry, it's also controlled by the companies that provide the pipe to the Internet, like Verizon, T-Mobile and AT&T, Apple's partner for the iPhone launch.

This is also a market where design has been essential from the beginning, potentially dulling Apple's usual competitive edge. Apple's reputation in both the MP3 and PC markets has been made on cutting-edge design, though competing on design with some of the products trotted out by the PC industry over the past five or six years hasn't exactly been like facing the 1927 New York Yankees.

Still, Jobs appears to believe the iPhone's simple user interface, with its single button and multifaceted display, is a significant improvement over the QWERTY keyboards on Samsung's Blackjack or Palm's Treo, or the numeric keypads found on other smart phones. Reviewers have yet to give the iPhone a thorough test, so it's hard to know whether concerns about typing and screen smudges--not to mention the slow EDGE network it uses--will prove to be problems for the iPhone.

Apple's main advantage in the mobile phone industry could be the same thing that has attracted computer users: the complete control of both hardware and software development that the company has over its products, said Baker.

Apple already has a leg up on the rest of the PC industry in its transition to becoming a broader consumer electronics company with the success of the iPod and the power of the iTunes store. No PC company has managed to enter another consumer category this decade with even half the success of Apple's move into digital music.

Even though Apple's Mac shipments are growing faster than the rest of the industry's, the PC market as a whole is expected to slow over time as PCs become more like kitchen appliances rather than tech gadgets. And in shifting to the consumer electronics world in search of faster growth, Apple will have to avoid alienating its core audience, the die-hard loyalists who have supported the company for years through a myriad changes.

Jobs' decision to delay the release of Leopard in order to get the iPhone out on time underscores a change in priorities at Apple that's been under way since the iPod exploded. Of course, if the iPhone is a hit, and Mac OS X continues to evolve, no one will care.

"To some extent, they can't lose sight of those people because OS X is central to other products that they are doing, and that connects them back into the core of Mac users," said Baker. "Wherever they go with the iPhone, Mac OS X is going to follow them."

[arotheram]

Three major product lines already exist...

One could argue that digital content (iTunes music and videos) is Apple's third product line, the fourth will be iPhone.

[David Turner]

ipod was more then weak competitors

How often these articles write off the ipods success to weak
competitors or marketing factors.

I wouldn't call sony a weak competitor, whom back when the
ipod launched was making digital music players. Nor was the
offerings of many of the players back then poor or lacking style.

What has been lost in time is that Apple actually took a concept
and made it work better. They gave an mp3 player a great
design with some easy to use software and put a hard drive in it,
which no one was doing. This changed the game totally.

Suddenly I didnt have a 32 meg limit I has 5GB, thats a huge
difference and then the design of the scroll wheel came into
play. Why didnt anyone else do the scroll wheel at the time, no
one else was making 5gb mp3 players so scrolling through a
handful of songs wasnt an issue.

I think this is what Apple feels they are doing this time around
with phones, taking a market that has many different phone OSs
(whom hasn't spent a heap of time learning a new phone or
doesnt use all the features..common on)

Puting together some redesigned tech in a stylish new package,
with easy to use software and a unique combination of touch
screen and motion sensors and software in hardware.

Will the iphone work out the same as the ipod story, I don't
know.

But how quickly realities of markets in the past are changed to
present a half picture to back up an agurement.

[Stan Timek]

Apple typically gets written off

For some strange reason the popular press always finds some way to gripe about Apple and its products.

As mentioned in some of the other posts, the iPod was derided initially, the computers are put down as is the OS, Apple TV is being called a failure...

Apple, like almost all companies, tries to do a good to great job in creating it's products and services. It also does a very admirable job of promotion. The iPhone is hotly anticipated by almost everyone. The hype meter is off the charts and everyone is waiting for the phone to work great, fail miserably, or fall somewhere in-between.

One thing that Apple appears to be doing (who really knows though other than Steve Jobs) with the iPhone is under promise and over deliver. We've heard rumors that third-party apps will be possible, rumors that stock piles are being built to satisfy demand - we'll just have to wait for this next Apple performance to play out in front of us.


Stan Timek

www.pollywogtheater.com
www.HD4AppleTV.com

[JimmyJackFunk21]

iPhone Crazy

So much hype, but will it really live up to it? So far, I'm not convinced. I'll stick with my Treo. I already get my music wirelessly through the "M" app from Mercora, and with the other features my Treo has, I'll stick with what I've got...at least so far

[wylbur]

batteries?

Well, if the iPhone has the battery problems of past iPods, we
will all be very displeased. I am very skeptical of the battery life
Apple is claiming because historically when they give you
numbers like this, you get half that or worse. An annoyance on a
music player, but on your phone and organizer that would really,
really make the device a source of frustration.

My other worry with apple is the declining hardware quality.
Apple used to make notebooks that you could keep for years
and years, now my wife and I burn through them and they
always seem to need service that isn't covered by Apple Care
and costs as much as a new laptop.

Maybe it will be the summer Steve Jobs get indicted. The feds
are still gunning for him and his lawyers, stay tuned for more
developments as the case gets built.

[csg7]

Awesome but Thank you !

$499 for a 4GB ipod phone with 2 year contact only with ATT ! Thanks but I'll wait atleast for it to get cheaper and also bigger in capacity.

No denying the fact that iPhone has added a new dimension to cellphone design.

[shadowself]

oxymoron

"... according to iSuppli, which defines smart phones as "handsets with an open OS (like Windows CE ..."

Now there's an oxymoron if there ever were one: Open OS Windows CE.

[robertgreenlee]

Avoid Apple lockin with iPhone get iTunes on existing phones

You don't need to spend $500 dollars to get your iTunes on the iPhone. I just read about new Melodeo music service called "nuTsie" that gives you access to your iTunes playlist on many newer existing mobile phones.

[jypeterson]

3G Broadcom Chip Issues

You never know, but with the ruling against Broadcom, maybe Apple did some research beforehand. If Apple had gone with a 3G chipset from Broadcom, they would be sunk right now with the millions of iPhones but nowhere to ship them...

[jase1125]

Obviously not well informed...

Windows CE is now open. Microsoft is sharing CE source code.

http://www.windowsfordevices.com/news/NS2632317407.html

[ewelch]

Desgin

Somehow the writer seems to think that current phones are well
designed. Did he listen to anything Jobs said last week at the All
Things Digital conference? He had a very good point that one of
the things that makes the iPod such a success is it's software. In
a pretty box, but it's the software. And that's what makes
Microsoft and Apple so much more innovative than hardware
companies like Motorola (horrid software!), Nokia, Sony/Ericsson
and LG. They are hardware companies who have no clue how to
design software. And that's where the iPhone will blow them
away.

The other handset companies think they can give us cool
hardware designs with mediocre to horrid software (and
intentioally cripple technologies like Verizon does with
Bluetooth) and we won't notice what utter crap their junk is
compared to an iPhone that has vastly better designed software.

This is what clueless iPod naysayers said on the website
MacCentral the day Steve introduced the first iPod in 2001:

- "I still can't believe this! All this hype for something so
ridiculous! Who cares about an MP3 player?"

- "All that hype for an MP3 player? Break-thru digital device? The
Reality Distiortion Field is starting to warp Steve's mind if he
thinks for one second that this thing is gonna take off."

- "Better bring that price down or you wont sell any of these
babies"

Comments from clueless readers after the 2001 iPod
introduction.

Indeed, they were truly clueless. The iPhone naysayers are
writing the next batch of quotes I'll be keeping.

[kelvin535846]

Do you mean QualComm?

I may be wrong... but I thought QualComm was being sued by BroadComm for infringing on its patent... Not the other way around.

Either way - this is really god news for Apple Inc.

[Mark Greene]

Usability and Sexiness -- iPhone has both -- Slam dunk

Minority Report in your pocket and a sleek metal housing...

Anyone who still doesn't "get" the iPod's appeal will be surprised
(deja vu) by the iPhone's success.

[Fil0403]

Get ready for the summer of hype

"perhaps one of the most hyped gadgets in history"

That's what Apple is and always was about: get a product that exists for years already, reduce compatibility, make it look good, increase price by 50% and hype hype hype so weak-minded Apple fanboys rush to buy a $500 brick with an Apple logo.

"Wherever they go with the iPhone, Mac OS X is going to follow them."

Interesting: when Microsoft does that, it's called anti-competitive attitude; when Apple does it, it seems to be a smart and wise decision.

[shark12er]

goo

"very helpful advice, thx a lot."

http://www.freedownloadscenter.com/Multimedia_and_Graphics/Video_and_Animation_Tools/Fruit_iPhone_Ripper_Suite.html

[DMBoricua]

No new iPods?

I think this summer would have been a good moment to announce if there is going to be any new iPods to go on sale later on. I've heard (and read) rumors that the new iPod's screen will be the whole size of the device itself, and that it would be touch screen. (Hmm, makes you think of the iPhone, right?)

[siestaboy]

What about Itunes Mobile?!

Why isn't the Iphone upon its release going to have Itunes Mobile?! What gives??!! Several phones before it have Itunes, so why doesn't the Iphone?! If this was supposed to be the new Ipod, it would have Itunes Mobile! And what's with the the lack of 3G?! They can't have high-speed applications without 3G! Idiots! Go ahead and hype the Iphone all you want! It's going to flop within the first month if these things aren't fixed, I guarantee you!