4 posts tagged “iphone”
Yes. Yes. YES, the iPhone is finally out. Nearly the entire IT industry came to a grinding halt as Steve Jobs announced the iPhone officially. Alongside some of the moust highly receptive praise from the analysts, comes the near certain barrage of doubts. We all know that fame begets criticism, and I'd like to share with you a piece from one of my favorite industry rags and stomping grounds of crazy-man Jim Cramer, The Street.
As much as I'd like to send out a big NYC boo-yah to Kaas, I've found several shortcomings in his argument. The vast majority revolves around a very myopic view of the product lifecycle, and it's phases. Just like enterprise software roll-outs, you cannot expect everything to make the first iteration, not just due to bandwidth limitations, but it's not practical from a feedback perspective, as you need to hedge your bets and adjust your strategy based on the success of each phase.
High selling price spells limited marketing potential.
An 8GB iPod nano and a high-end handset with similar features to the iPhone would retail for under $300, so the planned pricing implies a 100% premium for device integration and "the coolness of all things Apple."
First, I'm not sure where he's getting his numbers. I think "similar features" is a stretch, the size of the Grand Canyon. Industry experts (you know, consumers?) agree that the benefits of usability are priceless. I don't know of a single phone that is more usable than the iPhone.
Granted, the iPhone is not cheap - for now. Like any product who's price is governed by evolving hardware, you're going to see prices fall - quickly. It's no guess that the highly proprietary (read: low production volume, demand and hence high cost) LCD touch screen is taking the lion share of the handsets cost. Expect this price to halve by next year. This is an old concept, and I won't waste time repeating it. Just look at the evolution of iPod pricing over the years.
2. Why not target the corporate market?
One word: Blackberry. The last thing Apple needs to do as an emerging entrant in a completely new market, is make it obvious to the current market leader, that its going for it's throat. I blogged on the business vs. consumer segmentation prospects for the iPhone earlier, and still feel that Apple is not yet poised, or flat out even interested, in the business user sector. Microsoft and the stodgy B2B crowd usually beat Apple to the punch, simply becuase I don't think Steve Jobs and the rest of the Apple bunch love to serve that market, they love consumers, and each market has a separate set of expectations.
Now, that's not to say that Apple won't ever go there. However, I don't see Apple recreating BlackBerry type functionality. I would love to see them partner with Google Office. Just a wish, here.
More post upcoming on this topic.
Interesting how just weeks ago, before the fed rate pause, analysts were hammering Apple's price target down to 60. Some even had worse sentiment not mentioning, becuase it simply shows how narrowminded analysts can be. In fact, I love playing against the analysts advice. I love gaming analysts. Opportunity is found in what the market is not paying attention to, or has got all wrong. I ask myself if any of the analysts assigned to Apple even own an iPod or really are inspired by the business model, the process, the creativity. One of my biggest rules to investing is to only invest in tangible companies: one's you have first experience with, be it on a consumer or professional level.
I guess I can't blame the analysts, as they have to play risk-averse ball in order to appease the masses. No one wants to lose their retirement on tech (again) right? I don't have to play no contact, however, and if the anlaysts had picked up on the subtle clue in the quarterly report given by the Apple CFO that the iPhone was indeed a reality, you could have caught Apple at low 60's.
Now, Apple does happen to be up 8% in two days since the announcement of the iPhone, and the analysts are of course, upgrading after the stock has already gone up. Thank the analysts when the stock pulls back as most would after such a rally (hint: if I bought Apple at 50, its recent 52 week low, I would consider selling at 72, lest I be considered greedy. You can't beat 50% in 3 months on a blue-chip).
I set my target price for Apple at 75. I'm going to play hardball and ride it out to 85 just to save commissions on the sale. I strongly believe in setting targets for stock plays, as opposed to Index funds. Set a goal, score and go home. Don't expect lightning to keep striking in the same place indefinitely. Same goes for any gamble. That's why I've never lost money gambling. I wish I could say the same for the stock market. :)
And yes, I'm even more excited about the iPhone! My mobile contracts about to expire and my beloved SE t610 is on it's last legs after 3 years of dutiful service.
I guess you have to be careful what you wish for. My buddies at Engadget report on a quote from the Q3 earnings call I listened to yesterday from CFO Peter Oppenheimer:
"As regards cell phones, we don't think that the phones that are available today make the best music players. We think the iPod is. But over time, that is likely to change. And we're not sitting around doing nothing."
Not a big surprise to the Apple following, but this is a considerably firm public statement regarding direction from management, which for Apple, is rare.
On a side note, Apple stock rallied in after hours trading, making for aboot a 13% gain in 2 days. Incidentally, I bought Apple stock at 60 and was a inch away from doubling down when it hit 50 a share. Had I been a more seasoned investor, I think I would have taken the plunge. At least its good to see that my fundamentals are inline. Next time!
We have yet to be offered a true contender for a highly consumer-friendly MP3 Phone. Apple needs to do this. And they need to get on this one... now. I'm really disappointed that Motorolla beat them to the punch with the V3 RAZR. Playing MP3's on your phone old hat?
Absolutely, Motorolla's V3 RAZR is not new, but it combines an already market-proven phone with a convergence idea that is golden. It trumps Cingular's play with iTunes, since its not iTunes that's going to sell cell phones. iTunes didn't sell me, or anyone, on the iPod at the first glimpse. Sarcastic voice, fist-shaking: "It's the design and interface of the product you fools!" The marketing, people, the product marketing... not tech. Someone please tell Microsoft that in regards to their magic WiFi bullet. I swear to god, the white earbuds have done more for capturing initial audiences than any other feature of the iPod, as it is immeidately recognizable. It's the Bently logo on your MP3 player's hood. Will the V3 dominate? I'm not certain that 1 commercial of a dude on a treadmill is going to rock the USA. Trendsetting consumers don't pay attention to cell phone commercials, becuase, well, they come off like car commercials, and we're all trained by the age of 3 to completely ignore those on a subconsious level. We do live in America, right? What makes people buy consumer electronics? By and far, things that are adopted by the uppoer crust as having adequate cool factor.
Edit: Schomer raises a good comment about iTunes solid synchronizing capabilities having sold him on the sexy iPod (two points for alliteration?). Granted that this is a good thing, I think this more or less fulfills a customer's expectation more than exceeding one. I think grandpa would expect the synchronizing feature to work seamlessly, it's just such a fundamental requirement to any nontechnical person who can't appreciate the engineering feat.
I think Apple did however exceed everyone's expectations on making MP3 player's and other tech paraphernalia sexy, which is critical for consumer products. I guess the real question is to counter Schomer's point, would the iPod have taken control of the market to the extent it has if it had iTunes, but had as lackluster an appearance and usability as an iRiver? I couldn't disagree more
Market Trendsetting
There's something to be said about convergence and the market forces... I know it's not as big a deal to most middle-Americans who can stuff several items in their pockets if only for the morning and afternoon walk down the driveway to their car. But for urbanites on the move, the thought of being able to haul around one less piece of techmass in their suit pants on the subway is priceless. Elitest, yes, but priceless. ;) And we know from the cultutal dynamics of capitalist nations that the elite trends are often mimicked by the masses.
So, where are the problems for the V3? Not having a true competitor, I think the V3 will continue the bestselling trend of the RAZR. But the tipping point question is:
Is Motorolla really monetizing convergence as much as an Apple inspired iPhone would?
In this case, the consumer benefits more than the corporation, in the long run. Only Apple has the potential to benefit from convergence to such an extent to build synergies with music ordering, as V CAST is a joke compared to iTunes. I don't think there's any customer loyalty being built from a lifestyle standpoint. If someone comes out with a smaller, sexier phone and a challenging cell provider has equivalent support, I don't see a compelling reason why the elite will stick with the provider (assuming that cell phone coverage becomes a commodity over time, which it will. Go to Europe for proof, this is is not a long term competitive advantage.)
Grand Unified Lifestyle Theory
Now, on the other hand, if you tie in the lifestyle choices, the marriage to iTunes for your pod-casts, music, etc. you create glue. You stick the consumer to your service because there is a value add outside of the hardware itself. Obviously, this is highly dependant on what Apple can bring to the table in terms of an integrated electronic lifestyle. Given that it's common for consumers to not have a ShackleBerry, the lack of Office features on a mass consumer phone developed by Apple is not troubling. I'm of the faith that there will always be a divide between work and play computers, evidenced by console gaming vs. business machines.
Can Microsoft compete in this space? Sure, they can provide competitive forces, but given their recent track record of failing (read: Microsoft Live) all they will do is keep Apple on it's toes, perfecting their existing model, while Microsoft realizes they still operate like a enterprise software vendor. Untill Microsoft develops core values that recognize (and actually cater to ) the consumer mind, I think they're SOL.
I think what's more intriguing is the long term prospect of adopting a more (gasp) Web 2.0 mindset when developing consumer products. No, I don't think WiFi is here yet, we need better data plans in the US. But the prospect of incorporating aspects of iLife and iTunes on your cell phone are promising. I think if Apple can leverage this trend by realizing that they cannot limit to iLife, but instead should work this angle to leverge best of breed web applications, much in the same way Vox has (shameless plug!)
Why not have Flickr house your cell phone wallpapers? Why not have your cell phone photos immediately sent to Flickr instead of sitting on your phone memory? Why not support mobile photo/video blogging (really support it, that is)?
Failure to Launch
As far as failing to move on the iPhone, who knows why. I do know that it's unfortunate that Apple didn't partner with Motorolla... just think of a white, iPod-esque RAZR as the Stage 1 iTunes phone. Why would this be better than Cingular's push? Well, the phone Cingular pushed stinks... it's an outdated clamshell. That's not iPod-sexy enough to make someone change cell phone plans and jump contracts, not by a freakin' mile.
For now, I guess we'll have to sit on our hands, as perhaps Apple is focusing on their Windows MediaCenter counterpunch. Controversially enough, I'm a big fan of MediaCenter, despite the occasional freezing up, that is, of course. :)
