No people lining up in front of AT&T stores

  • Opinion – One week to go for the iPhone, and at least so far, there aren’t any tent cities forming in front of AT&T and Apple stores in my neighborhood. If you are caught among the hype and the doubt of Apple’s iPhone, here’s a very subjective reality check on what to expect when the phone goes on sale.

    If you are somewhat interested in the iPhone, then there is a good chance that you have signed up for iPhone email alerts. That means that today you have received a link to a 20 minute marketing video, disguised as “guided tour”, in your inbox; and if you have watched this video about this “revolutionary” device with “amazing features” then I bet that you are already prepared to buy the iPhone next Friday.

    The guided tour video is yet another example of Apple’s marketing talent. I cannot remember any IT marketing campaign that has been so flawlessly executed than Apple’s iPhone efforts (not to confuse with Apple’s PR, which has been so overwhelmed with iPhone requests that it has been unable to answer our questions for the past three months). Gee, yes, after watching that video, I am ready to dump my Blackberry Pearl in a heartbeat.


    Hold on a second: That Blackberry Pearl is a sad story in itself. It was the first phone I bought purely by marketing hype and not by research. That phone turned out to be everything else but great - that “Pearl” trackball is the reason the phone was replaced twice within less than a year, the OS is unstable and slow, the import features for the address book are a pain in the you know what and the battery cover and hinge are among the worst ever designed. And I haven’t even talked about the near useless array of buttons RIM calls a keypad.

    So, shouldn’t I have learned my lesson? Or is the iPhone a safe bet?

    Is the iPhone too expensive?

    Much has been written about the iPhone’s price tag of at least $500. Would you pay that much for a phone? Well that is probably the wrong question to begin with.

    A little over half a year ago, we were introduced with a game console that costs $600, which is 50% more than the most expensive game console before it and twice as expensive as what Americans used to pay for game consoles. More than 5.5 million people around the world apparently had no problem shelling out that much dough for the PS3. It is a plain fact that many people in this country don’t think about affordability in the first place. Here, you buy first and then you figure out that you have bought something your credit card may support but you actually can’t afford.

    Common sense suggests that $600 is a ridiculous price for a device whose main purpose is to make phone calls. But then, we know that pricing isn’t an issue and we should not expect consumers (and Ebay traders) to be deterred by an amount that could buy two Blackberrys or at least two iPods.

    Features: Why hasn’t anyone done this before?

    Feels a bit like a deja-vu. If you look back in time and see which devices have made Apple a successful company, then you notice that it really isn’t innovation that makes Apple stand out. Instead, Apple profits from mistakes others have made before. It happened before with DVD drives and it happened with the MP3 player, for example. Now the iPhone just feels like Apple had a long hard look at today’s cell phones and came up with some solutions to make a smartphone a much more functional device.

    There is the combination of two key mobile devices we carry around today (cellphone, MP3 player) and there is a user interface that is, considering what we have today, nothing less than stunning. Really guys, why hasn’t anyone before come up with the idea to let the user choose which voicemail to listen first to? It is simple things like that, that will help Apple to differentiate the iPhone from what is out there.

    I will go one step further. The combination of features (phone, music, Internet) and especially the way Apple has managed to integrate web-based functions such as Google Maps comes very close to what Intel has proposed to be a Mobile Internet Device (MID) and the next big growth area for the company. If you are vendor planning to develop a MID, take note: The iPhone is the device to beat.

    In fairness, Apple will have to learn its lesson most likely as well, just like any other vendor. That touchscreen may look nice, but many who have used a touchscreen phone before know what it means when that touchscreen stops working. Imagine that touchscreen to die while you are traveling abroad. Screw that music and video content on the phone, but there needs to be a backup to enable users to make phone calls without that touchscreen.

    How to shoot yourself in the foot

    Apple wouldn’t be Apple, if there wasn’t somewhere something that just doesn’t fit into this perfect picture. In the case of the iPhone, you don’t have to look that long. How can an incredibly smart product planning team could come up with such an incredibly dumb idea for a market introduction?

    First, we learned that the phone will only be sold through its stores and AT&T. Then we learned that there is a SIM card that cannot be exchanged. AT&T store representatives today told us that “there will be a way to unlock the device,” meaning that you will be able to use it with other carriers. But, we were informed, that wouldn’t matter anyway, because you can’t get the iPhone without a contract anyway.

    Really, guys, who came up with that ingenious idea? Is that a test how far Apple brand loyalty goes? How many users are willing to ditch their current carrier and are willing to pay either a penalty or two phone bills just to enjoy the iPhone? In terms of plans, AT&T will charge at least $40 for basic phone service, plus, if you choose to, a data plan, which will cost you somewhere between $20 and $40 per month extra. Expect to pay at least $100 per month to take advantage of those fancy features Apple shows us today.

    Even if the one-carrier strategy alone is probably enough to kill most of the potential iPhone sales in the next months, it is a safe bet that there will be lines in front of Apple and AT&T stores. So, if you really want this phone, make sure that you get in line early to beat the Ebay crowd. There is no doubt in my mind that, if you are already an AT&T customer, if you like your iPod and if you believe that a cellphone should do more than just making phone calls that you absolutely will enjoy the iPhone.

    The recommendation for everyone else is to stay calm, wait until the product hype has died down (10 million phones scheduled for the next 12 months should be plenty of supply) and Apple has come to its senses and begins offering the phone through other carriers as well. Especially when we hear rumors that there will be a second-generation iPhone later this year with some enhancements and twice the integrated Flash memory.

    Or, you just skip the whole iPhone hype and remember that there some other decent phones coming our way.