Perspective: The Apple phone flop

I just looked at the calendar and realized that:

(a) It's only a few weeks to Macworld, where Apple Computer is expected to release a smart phone similar to the BlackBerry, and:

(b) I haven't antagonized Apple fans in a while. It's my birthday this week, after all, and I need to get more fun out of turning 45 than just counting the new moles on my back.

So, anyways, Apple is slated to come out with a new phone. Reports say that it will have a slide-out keyboard, 4GB or 8GB of storage, and work on CDMA or GSM cellular networks. It will start at $249 before subscription rebates.

And it will largely fail.

Initially, of course, it won't look that way at all. As with any Apple product release, it will be ushered into the world on a wave of obligatory gushing. "It's the greatest advance in communication since cave painting," some will proclaim. "Like Star Trek, but without the clingy Qiana shirts."

The iPod looks like it may turn out to be a non-repeatable experience

It's predictable. If Apple got into medical devices, people would come out of Steve Jobs' speech proclaiming "The iBag is the easiest, most user-friendly colostomy device I've ever encountered."

Sales for the phone will skyrocket initially. However, things will calm down, and the Apple phone will take its place on the shelves with the random video cameras, cell phones, wireless routers and other would-be hits. Remember the Mac Mini? It was supposed to ignite a revolution for small computers. It didn't. The flat-panel iMac? Some predicted that Apple's price tag would drive other prices higher. Whoops.

Why won't the Apple phone succeed? It will be a great piece of hardware that, if I wasn't the cheapest man in North America, I might buy. The entire strategy, however, 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.

Single shot?
But the iPod looks like it may turn out to be a non-repeatable experience. Look at the historical record. When the iPod emerged in late 2001, it solved some major problems with MP3 players. At the time, such music devices came either equipped with a nominal amount of flash memory--like 64MB or 128MB--or a large 2.5-inch hard drive. Sony, the once-king of portable music, remained in love with portable CD players.

Apple opted to adopt the 1.8-inch hard drive, a piece of hardware spurned by other manufacturers. That was the world's mistake. The 1.8-inch drive let Apple put a huge amount of storage--the real problem with MP3 players--into a small form factor. The first iPod sported 5GB of storage, or nearly 40 times as much as the upper crust of flash players. The company even locked up supply of 1.8-inch drives for a while, so no one could copy it.

The iPod also conquered the problem of small screens and cheesy navigation. With its newfound popularity, the company was also able to get music publishers to agree to its terms.

Unfortunately for Apple, problems like that don't exist in the handset business. Cell phones aren't clunky, inadequate devices. Instead, they are pretty good. Really good. Why do you think they call it a Crackberry? Because the lumpy design and confusing interface of the device is causing people to break into cars? No, it's because people are addicted to it.

Samsung has scoured the world's design schools and hired artists on three continents to keep its phones looking good. Motorola has revived its fortunes with design. KDDI, a Japanese carrier, has a design showcase in the teen shopping area of Tokyo just to be close to trends. And Sharp doesn't skimp when it comes to putting LCD TVs on its phones.

Apple, in other words, won't be competing against rather doltish, unstylish companies like the old Compaq. The handset companies move pretty quick and put out new models every few weeks.

Second, Apple has to face the issue of trust. Music players are fairly easy. Songs come out of memory and must be amplified. With cell phones, consumers care mostly about quality of service. Who, really, doesn't expect a new company to conquer all the static and connection issues with their phones? Granted, Apple will use contract manufacturers to assemble their phones, but designing these phones takes experience and talent. And the cell carriers are far deeper into it here.

So when consumers get to that counter at CompUSA, they will debate buying the Apple phone, and even hold it up for a look. But when they whip out the credit card, they'll probably opt for a Motorola.

Biography
Michael Kanellos is editor at large at CNET News.com, where he covers hardware, research and development, start-ups and the tech industry overseas. He has worked as an attorney, travel writer and sidewalk hawker for a time share resort, among other occupations.

More Perspectives

[pjianwei]

What a sad way to turn 45!

You must be pretty sadistic to want to have abuses greeting your birthday. I know you want it, you explicitly said so but it still unable to get it why you want to stir the hornet nests.
You are facing a group of tech/music users who are as powerful as the evangelists politically (at least before this year).
I predict maybe you will get more than 100 birthday greetings. Happy birthday anyway, stay strong in your beliefs, right or wrong.

[rcardona2k]

Let the thing come to market first!

What's with all the print against products before they hit the
market? It isn't like Apple is following some lame marketing plan
from Redmond where they pre-announce, pre-hype some abstract
nirvana. All of the iPhone's buzz is hallucination-induced drivel
from the blogosphere, so don't indulge yourself in the mudpit like
a sow and take the highroad for your 45th birthday. Maybe you
can focus on making the rest of your birthday, um, happy.

You really are a jerk!

You sound like you're an authority pontificating your
opinions...what business did you build to qualify you as an
authority. Ideas are cheap and so are yours. You give Cnet a bad
image.

[news_reader]

Mission accomplished!

These replies are fantastic! This is the best article I have ever read on CNet.


"I haven't antagonized Apple fans in a while."


I'm still laughing at that line. Apple fanatics take themselves so seriously!

[tomhound1969]

the article was light on facts

but reading the Apple Phone Flop article was sort of like listening to a pre-game show (think football) where guys sit around a table and speculate about who will win the game. Sometimes the reasons they give make little sense and are based on what one player did ages ago, but it's fun for what it's worth.

[the Otter]

I don?t even own a cell phone.

There, I?ve admitted it. I?m a total geek?a work-from-home,
cross-platform, custom application developer that doesn?t even
have a cell phone. And why? Well, frankly, I don?t need it. My
wife?s been bugging me to get one for a while?in case of
emergency, she says?but the fact of the matter is that she, I,
and our kids spend over 95% of our time in the same building
(be it home, Church, etc.). Furthermore, we get a discount on
our high-speed internet by maintaining a $20/month, unlimited
calling plan on our land line. Why would I replace that with a
$60/month plan that would require me to keep track of daytime
minutes, etc.?

All that having been said, I?m very interested in the so-called
iPhone. If all it does is the same thing every other cell phone
does, I?ll happily ignore it, just like I?ve ignored every other cell
phone. The word on the street, however, is that this thing will do
a *heck* of a lot more than every other cell phone does.

As rcardona2k said, let the thing come to market. Neither you
nor I nor just about anyone else knows what the iPhone/iChat
Mobile/iCantBelieveItsNotCingular is going to do. Give it a
month?or more; goodness knows, people have been predicting
this thing for *years*?and then tell me what you think.

Oh, and btw - I?m at least somewhat interested in a Mac mini for
the kids, too.

[mhersh]

Mac Mini

They're great. I have two of them.

[Predrag Vasic]

Once iPhone is out, yo'll probably get one

If apple does with this what they did with their hardware and
software over the past 5 years, you'll definitely finally get a
cellphone (to your wife's delight).

These will sell like iPods, because they will essentially BE iPods
(with a phone chip). I doubt that $250 is a realistic price. Still,
they are likely to make a royal killing and take quite a decent
share of that market (at least in the US).

They'll probably be sold where iPods are sold. Therefore, rather
than being a new entry in the crowder cellphone shelf, they'll be
one of the four iPods on a special pedestal, above all other MP3
players. Essentially, they'll be introduced into the field where
they're part of the dominating brand, and will leverage that
mindshare.

Apple sells 12 million iPods in a quarter. If only 1/4 becomes
iPhone's share (3 million), most Americans will have seen one or
known someone who has it within six months of its release
(even us tech dorks know more than 50 persons around us).
This has an excellent chance to eclipse RAZR.

[Cuco Mejias]

We'll find out soon enough

if the phone will succeed or fail. Mr. Kanellos is a pundit and his job is to prognosticate. Notice how he shields himself from the possibility that he's wrong by stating that the phone might be successful initially, but only as a result of fanboyism and not because it might actually be well designed. Heaven forbid! So this story is now bookmarked and if Mr. Kanellos is wrong I'll be sure to let him and his readers know.

[edguzman]

Is this Guy for real!!!

What are you, Bill Gates's nephew or something. The iPhone will be a hit because like the iPod it will do what it is supposed to do. My friend unlike you Apple does get better with age!!!

[pilaa]

Touche!

Very well put my friend!

[melevy]

It may not be a hit, but it probably won't flop

Apple doesn't have to reinvent the wheel. Cell phone chipsets are available from a number of manufacturers, they don't have to design the phone from the ground up.

[mhersh]

Yeah...

But, I think they're trying to approach this in a "reinvent the wheel"
sort of way. They know that current phones suck and they want to
make a massive improvement over existing models, raising the bar,
so to speak. Aside from the cellular components, well, even
including some of them, I guess (talking about the ceramic casing
patent), they really are building this thing from the ground up.
Remember, Apple designs every aspect of their machines.

[backonmac]

a very nice phone, but reinvention unlikely

If the reports out so far are correct, this is an iPod and a phone. Now, if it ends there... it's a very nice product for mobile phone and music users interested in a merged device. The world will have one of the world's best industrial designers setting its skills at the merging of two favorite mobile devices that have been merged before but never in a realllly nice Apple sort of way.

If it's "realllly nice" -- great. It will probably rank up there with the coolest phones available when you go shopping for one. But unlike the iPod, it won't blow every other similar product that came before it out of the water.

Part of this is because the iPod wasn't merging anything, it was reinventing something. (The mp3 player.) Here, if it's all about clever merging, great... but that's not reinvention. However, if in the process they turbo-charge one or more aspects/features of the merged devices, then we could be surprised.

Otherwise, I'd expect a svelte Apple iPhone that will have the same sort of look and feel the iPod has that sort of makes you want to have it, touch it, use it.

[kirkules]

Some people find pissing off others entertaining; Just ignore this article

So you want to spent your 45th watching Apple fanboys and girls
(maybe) get all twisted in a knot. We should all just ignore this
article and by lunch all those laughs you were expecting from
people foaming at the text will be so plentiful Birthday lunch at
Mickey D's will seem overwhelming.

[stucarius]

I was hoping for better

I thought when I saw the title I might get a decent run down on the hazards Apple will face in this simi-new market. Instead al we got was a really thin argument that "seemed" to be based more on a dislike of Apple.

Having 30 years in the industry I can assure you the impact of all the products you just marginalized is huge. How can I take commentary that considered the iMac a failure seriously?

Come on CNET you can do better than this for columnist. If you are going to criticize Aplle, and there is legitimate ground there, at least let it be some one who knows what they are talking about. This guy seems more like some one who just stumbled his way into this most recent gig.

Jeff Stuckey
Atlanta Georgia USA

[djcaseley]

I'm content

Firstly, you can't quote seemed. It looks wrong and adds no value.

Secondly, I know a good dozen people who own/owned the bondai blue iMac or the eMac. Never seen or heard of a flat iMac outside a store.

This guy is a professional writer, you're obviously not. I'm entertained by the piece, you're not, and it's your reply that's going to entertain him! Everyone's a winner. Except you Jeff.

[JimUrban]

Pluck it First

Rumor has it,if you cook it properly,
that crow you're fixin' to eat.
Tastes just like chicken.

ENJOY


Jim

[Thomas, David]

LMAO - Vintage Kanellos

I rmember this guy saying the same thing about the iPod about
5-6 years ago. Obviously this guy has personal issues (maybe
financial) that make him show is butt in public.

Personally, I have no reason to believe Apple will come out with
a phone. A lot of us want them to, but that sure does not
translate into it being so.

More to the point though. Hypothetically, if Apple were to come
out with a phone, we all know that the current decision makers
at Apple would not do so without it being a compelling product.
Oh, I hear the nay-sayers. But the same nay-sayers are going to
repeat the same crap that they spewed about Apple, they have
spewed for years. Historical cases in point:

a. Both Microsoft, and IBM, did a white paper study and
concluded that Graphical User Interfaces provided no benefits to
increasing ones efficiency. This was between 1983-85. Of
course, we know what they were doing secretly now.

b. The iPod had no market-place. I think we should find an old
article of Kanellos's for this one :-)

c. Apple doesn't make serious computers for business
applications, but they are great for graphic, and animation. This
argument has always been my favorite, because it is so
unbelievably stupid. Come on, what takes more raw power to
do, crunch a spreadsheet or fractal-analysis?

OK ... c is a mere rant, but it is true.

Anyways, I guess I'm not flaming M.K. After all, that's what he
wrote he wants anyway. Ahh, but I do wish it were true, that an
Apple phone was here. Because everyone knows one thing,
unless S.J. gets senile, it won't be released without at least a few
truly redeeming qualities on which a hat can be rested upon.

[ajbright]

Erm

while I feel the swipe at the Mini and the notion that just because a Mac has a built in LCD monitor, all LCD monitors will rise in price, were somewhat pointless and off topic, the rest of the article seemed to make sense to me.

It didn't say that an Apple cell phone would be a bad product - it didn't say they wouldn't sell in good numbers. It merely suggested, in a manner determined to aggravate Apple fans, that a cell phone produced by Apple would not have the same floor-wiping success that the iPod had in the MP3 market.

The reason being that several good products do exist, and are being continually updated, by businesses whose main focus is this market.

Sony lost the ball big time on the MP3 player market, more or less handing it over to Apple. Everyone else arrogantly decided to push any old crap out the door, without any media support to speak of, and for some reason were surprised when the elegant, simple to use, well supported iPod crushed their products.

If Apple do produce a phone, I'm sure it will be as well received by Apple fans as their other products, and I'm sure it will be a very cool, very elegant piece of engineering. However it won't have the same advantage over phones as the iPod had, because people actually like the existing products.

The only way I see Apple wiping the floor is if they introduce a phone that offers something revolutionary, yet intuitive to understand and use, feature or capability that current phones do not.

What that could be, aside from relieving the user of the need to rely on old-style wireless communications and allowing cheap or free broadband wifi phone calls I don't know. If it did that, though, I would see Apple's phone dominating the market providing the infrastructure is in place to support it.

[natmacmondo]

iFone

You make many good points and I often wonder why Apple is bent on producing a phone and probably a connected multimedia handheld would be a much better option.

Trouble is, your contribution to this debate is emotional rather than rational/logical. What is it that threatens you in an alternate computing platform? Perhaps you would prefer that everyone be miserable when the get a "error 106136472 - OK?" message from XP (can't wait to see what the messages will be in Vista).

[djcaseley]

Re: iFone

Computers aside, you said: "I often wonder why Apple is bent on producing a phone and probably a connected multimedia handheld would be a much better option."

Look out for the v2. With the iTV, the high-processing power of the top-of-the-line Mac machines and market saturation of the iPod brand, Apple are heading for a Apple-branded media & computing experience in and out of the home. The first iPhone will be for nought more but brand recognition in that market. Give it a few years before it really kicks off.

[dragonbite]

Glad somebody said it

Even if I don't agree with 100% of your thinking, I'll gladly pull up a plate of Crow with you if it comes to that.

Instead of seeing this as an attack on Apple, the fanboys should look at it as a compliment on Apple's observation of the NEEDS of the market and not jumping into an already mature and happy market (at least in the part that they would be getting into).

Also, Apple has long had it's roots and influence when it comes to multimedia (music, movies, graphics, etc.) and other than fancy styling, music and video is already in phones so their impact is already subdued.

I hope to hear something better than an iPhone announced.

[HansBots]

music and video is already in phones .........

Yes but (almost) none of them can use them with iTunes

[jpsalvesen]

Yup!

There's enough fanboys around that Joe Average will get to see one when the fanboy says "hey, look what i got!". And if Joe Average likes what he sees, he may very well buy one.

Also, I like how the old fogey forgot to mention iTMS regarding the iPod breakout story. And iTunes. Usability was part of the reason why Joe Average got himself an iPod.

[mhersh]

Put down the crack pipe...

You're an idiot. There are two things that are going to sell this
product, it's design and it's software. These are two areas that no
one can compete with when it comes to Apple Computer. I have
one of the top-of-the-line Motorola phones, but I'll throw it out the
window in the middle of the interstate to replace it with an iPhone.
These phone guys don't get it. Their designs are tacky and their
software is as enticing as a graphing calculator. If it's coming from
Apple, you can count on seeing a product that's sleek, sexy and
extremely functional.

[jl878524]

You're way off base

There are always gadget nerds who have to have the ultimate device, but most consumers don't care that much about their cell phones. I'll use whatever cheap product gets bundled with my cell service.

[timeforhell666]

Fanboys, PFFFT! Happy B'day Mike-heres a present for you.....

******** hell you fan boys just want me to renounce my
Appleness! Now, I'm a mac boy at heart, been using them since
the Apple IIe in Primary School and at home since 2001, and
have been through 7 Apple computers to date. But the way you
guys rave on sometimes!! Shut up and smell the facts!!!

This guy is a well respected member of the online media
community with far more experience in the tech industry than
*MOST* of you biased nerds, and he is giving an opinion based
on facts and history that could possibly be valid. He isn't saying
"Apple is the DEVIL!!!" and preaching Gates a God, he isn't even
saying the iPhone will be bad. If you look past your immature
biases you will see that Apple isn't entering a niche market,
rather one of the biggest globl industries of the modern world.
And it ain't gonna be a tough cookie to crack, which could
ultimately spell its doom, reguardless of product quality. Exactly
the picture Mike is trying to paint.

Mike, mate, nice to see you stickin ur neck out there for a few
Fanboy axe swings; they've taken the bait so revel in their
hysteric rants, and happy birthday, btw!

By the way, my brand new MacBook Pro 2.33GHz 15" is in the
mail, Apple number 8 for me, so don't write me off as a windoze
user, I've been rebelling since before you knew what an iPod
was.

[Sboston]

Right on!

I'm not a Mac user, but I found your post dead on. :)

Happy Birthday Mike!

[Fleek1116]

Thank you

Thank you for actually reading the story before you started bashing the author. I have an Ipod, I'm on a macbook right now, but Mike makes several good points without bashing Apple's name in the slightest. I'm right with you timeforhell.

[elranchero]

dude, you forgot something

Steve Jobs has lots of connections with Disney.
Disney has a TON of experience now with Cellphones.
I was just listening to a podcast about that yesterday.
Disney has this GREAT cellphone offering - but nobody knows
about them. For some reason, Disney isn't marketing them like
they could... If you're a parent, check out Disney's cell phones.
They offer lots of control

[dewalt25]

not the greatest...

Their ESPN Mobile did largely fail

[alexgp87]

not disney...

im pretty sure if apple wants to sell phones to the same crowd it sells its iPods it will have nothing to do with Disney. ipods sell more to the hip cool young crowd that do not care much of technology or disney and do not think of disney as cool. disney is for kids, they dont want that.

[rbiz]

Wow!

That's an aweful lot of insight for something that was a rumor
until just a few days ago.

I'm a Macintosh "fanboy" (can I be a fanboy at 48?), but I am
skeptical that Apple will fair much better than anyone else has in
the cell phone market. I believe their only real hope is to offer
fully featured PDA/Phone, even then, its been done, not all that
well, but its been done - As has the cell phone in general.

There are many practical features that could be included, but I
doubt that they will be included in the initial release of the
iWhatever.

I don't believe that their success or failure with iPhone will have
much to do with the iPod.

[shuffm]

But - what other features will it have? Integration? Ease of use?

Apple products are status symbols. Macs and iPods are sexy. Right now, consumer trends are showing that people are spending the money for high-ticket, unique, and premium items. iPods have changed the way people look at Apple, which is leading them to buy Macs...driving them to consider and purchase other Apple technology. The iPhone could be the Blackberry for the artistic and stylish set...and of course Mac users.

Apple hardware has always been easy to integrate with whatever it chooses to work with. When they come out with something, the quality is good, and it usually works.

Apple products have always been very easy to use, too. Ease of use combined with seamless integration...that may really drive people to look at and purchase an iPhone. If Apple can take some of the confusion, interoperability, and problems that people have with phones and hand held devices...maybe they've got something.

Now, I have read very little and speculated very little about what the iPhone might be. If it is an iPod with a phone and some hand held capabilities...it would surely sway would-be buyers from similar devices like Palm, Blackberry, or MP3 Phones.

What other features do you think it will have? In a year, if I can sync my iPhone, iTV, PC or Mac...and who knows what else...iPhone could be a big deal.

My cell phone sucks. I really only want to use it to make phone calls...and it barely accomplishes that task. I tried using a Palm a few years ago, but I found it was more time-consuming and more trouble than it was worth. My Franklin Covey binder is much better, and syncing the thing with Windows and Outlook was a royal pain.

At this point, I have no desire to own a cell phone AND a hand held device. I can barely keep from losing my cell phone...I'd need a utility belt. I own and love my iPod video....and now...I'm going to need a new cell phone. Would I like some extra features? You bet. I've been doing some text messaging...a keyboard would be great. But, I really don't need a Blackberry. Maybe something simpler is better for a lot of people, and there's a niche here...especially in the consumer arena.

Look, there are some good points in this article, but cell phone makers, MP3 makers, and hand held makers have not been getting this right. People have all sorts of problems with their cell phones. Other MP3 players are garbage. People love their Treos and Blackberries...but they're not perfect either...especially the Treos. A lot of problems.

Finally, Apple is the best positioned of any hardware, software, or media company when it comes to distribution of entertainment. If any of those elements play a significant role in the iPhone, it will be hard to bet against Apple on this one.

Question: is it believed that they will also offer calling plans and possibly have an internet phone - like pricing model?

[bikejuggy]

welcome to logic

thanks for shedding some logic on apple-maniac fans that seem to think apple is everything. i luv and respect many apple products as much as the next guy, and i agree that their lock-down market share with the ipod/itunes structure will help the iPhone suceed... but its not going to be magical. apple will really need to SOLVE A PROBLEM in the phone industry if they are going to be successful in this market. it looks like that problem could be bridging the phone/mp3/video player interface (which isnt really a problem b/c people have already combined these functions!)... but other than that its not very clear what apple will add to the market.