NY Times Article: Apple Aims for the Masses With a Cheaper iPhone June 10, 2008
Posted by chetan in : 3G, Carriers, Smart Phones, US Wireless Market, Wireless Value Chain, Worldwide Wireless Market , add a commentThis article by John Markoff appears in today’s NY Times. I think Apple has done a pretty good job with the 3G iPhone launch. Steve Jobs is quite pragmatic and adjusts his strategy based on real data. Changing
the business model and pricing is testament to that.
Kimberly White/Reuters
Images from a Major League Baseball game were shown on an iPhone during Steven P. Jobs’s speech on Monday, when he revealed a new model of the phone, priced as low as $199.
Apple Aims for the Masses With a Cheaper iPhone
http://www.nytimes.com/2008/06/10/technology/10apple.html
By JOHN MARKOFF
Published: June 10, 2008
SAN FRANCISCO — Steven P. Jobs, chief executive of Apple, introduced a new cheaper iPhone model that navigates the Internet more quickly, expanded its distribution overseas and displayed a range of new applications and services in order to establish Apple as a major player in the cellphone industry.
Apple, the maker of consumer electronics and computer equipment, had set a goal of selling 10 million iPhones in 2008, which would establish it as one of the major smartphone makers in the less than two years since it began shipping the original iPhone. Apple has sold six million phones globally since its introduction.
Analysts said that Mr. Jobs, one of the world’s best product marketers, had largely accomplished what he set out to do and they welcomed the moves he outlined in a presentation before software developers on Monday.
“This is the phone that has changed phones forever,” Mr. Jobs said.
Mr. Jobs said the new iPhone 3G, to be available in the United States through AT&T beginning on July 11, will sell for $199 for the 8-gigabyte model and $299 for a 16-gigabyte model. He said the biggest barrier to people buying the phone had been price.
Analysts and industry executives said they believed the lower prices would bring in new consumers who had been put off by its $399 price. “The price is clearly correct,” said Mike McGuire, a research vice president at Gartner, a market research firm based in San Jose, Calif.
As widely anticipated, the phone will run on so-called 3G wireless networks that allow much faster Internet connections than the original iPhone. During a 110-minute presentation, Mr. Jobs went to some lengths to compare the speed of the new iPhone 3G to the current phone and to rival phones like the Nokia N95 and the Palm Treo 750. He called downloads “amazingly zippy.”
The phone, sleeker than the original, will also have built-in Global Positioning System capability to allow location-based services. It will also have a longer battery life in some cases, five hours for talking on the 3G network and 24 hours for playing music on the phone.
The announcements came on the opening day of Apple’s Worldwide Developers Conference, where several developers showed off software that turned the iPhone into a game console and a musical instrument. Others demonstrated programs that used the phone’s ability to locate its users on a map.
At one point during his demonstration, Mr. Jobs showed a tracking feature making it possible to watch on a Google map as an iPhone user drove down Lombard Street, the twisty tourist attraction in San Francisco.
Mr. Jobs also indirectly challenged Microsoft with a mobile Web service call MobileMe, intended to permit a user to synchronize a phone, calendar and contact information on the iPhone and multiple devices including PCs and other iPhones. The service, which will costs $99 a year and comes with 20 gigabytes of data storage, is similar to a service offered by Microsoft.
Apple’s obstacle in offering the new service is that its competitors, like Google, offer similar services for less. Google offers 10 gigabytes of e-mail storage for $20 a year.
Apple announced that it would begin selling the iPhone in 70 countries this summer; the current phone is being sold in six countries.
“Given the feature set, ecosystem partners, launch countries and the pricing of the iPhone, they are likely to hit the 10 million mark by September-October,” said Chetan Sharma, an independent consultant on the wireless data communications industry.
The company, based in Cupertino, Calif., announced on Monday in a regulatory filing that it would sell the 3G phones under different business arrangements in the United States. In the past, Apple shared service plan revenue with AT&T and other cellular firms. The second-generation iPhone will be sold without the recurring revenue streams and without the exclusivity arrangements it was previously able to command.
While trying to convince cellular carriers around the world that they should carry the iPhone, Apple realized that it needed to change the financial deal that it had with the carriers in the first six countries.
“We’ve changed our business model, from getting a cut of the future revenues to just a more traditional model,” Mr. Jobs said in an interview on Monday. “That’s enabled us to roll out around the world much faster.”
AT&T said it would subsidize the phones to attract consumers. Under the plan, unlimited iPhone 3G data plans for consumers will be available for $30 a month, in addition to voice plans starting at $40. Business users will be charged $45 a month for data.
By giving back the revenue to the carriers, which they may use for subsidies, Apple is hoping to dramatically increase its volume, as well as sell more Macintosh computers to iPhone users.
“It’s not about the iPhone,” said Charles Wolf, a financial analyst at Needham & Company. “There’s a tradeoff that Apple is making. The iPhone halo effect will be far more powerful than the iPod halo effect was. It’s going to stimulate Mac sales among iPhone users.”
Damon Darlin contributed reporting.
iPhone - The Saga Continues June 9, 2008
Posted by chetan in : Wireless Value Chain, Worldwide Wireless Market , add a comment
Source: Apple
As expected, Steve Jobs hit the ball outside the ballpark and then some (distance). $200 3G iPhone with launch in 20 countries (70 by year’s end), GPS, enterprise support, app store with open APIs.
If critics had any doubts about the 10M by 2008 number, well! case closed.
COM #127 over at WAP Review
Posted by chetan in : US Wireless Market , add a commentDennis over at WAP Review hosts this week’s Carnival. Good reads as always. Our MoMo Amsterdam post got the Post of the Week honors. Thanks a lot, Dennis.
San Jose Mercury News Article
Posted by chetan in : US Wireless Market , add a commentJohn Boudreau of San Jose Mercury News interviewed me for this article on iPhone
http://www.mercurynews.com/apple/ci_9527319
New iPhone unveiled today?
APPLE DEVICE SEEN AS A WORK IN PROGRESS
Article Launched: 06/09/2008 01:30:24 AM PDT
It’s not even a year old, but Apple’s iPhone is captivating consumers and competitors in a way no other cell phone has.
It has raised the bar on what callers demand from their smart-phones and inspired a host of copycats.
But the widely praised and wildly publicized gadget is still a work in progress, and most experts say it has far to go before it really transforms the wireless industry. Nokia, for instance, sells more phones in a week than Apple sold in 10 months, and experts say the iPhone’s high price limits its appeal.
“The publicity and hype around Apple and the iPhone is hugely out of proportion to their impact on the industry,” said Edward Snyder, a cell phone expert at Charter Equity Research.
That may change. Apple is all but certain to announce an upgraded version soon, perhaps as early as today, when Steve Jobs addresses a gathering of Apple software developers in San Francisco.
Apple watchers expect the new version to take advantage of a faster wireless network, dubbed 3G for “third generation,” improving what many consider to be the current version’s key flaw - its slow Web access.
“It’s clear they have to do 3G,” said Rob Enderle, founder and principal analyst at the Enderle Group, a technology consulting firm.
But even if that doesn’t happen today, Apple’s chief executive is sure to talk about new programs that will make the iPhone more like a computer for your pocket than merely a communications device.
And most analysts expect it to eventually become a culture-shifting product like the iPod, which helped change how the masses get and listen to music.
“They’ve done what they’ve always done - come up with something radically different,” said Ken Dulaney, an analyst with Gartner, a research firm.
IPhone’s influence
Even with plenty of room for improvement, the iPhone has also changed the way people use smart-phones, said wireless industry analyst Chetan Sharma. T-Mobile, for instance, reported that its German iPhone users devour 30 times more data than its other wireless subscribers.
“Every major carrier in the world has been trying to figure out how to launch an iPhone on their network,” he said.
For some, it has become much more than a communications device.
“It almost feels like you are looking at the world through this device - the sense of being able to reach through this device and touch all these things,” said John Seely Brown, former chief scientist and director of the Xerox Palo Alto Research Center.
“Think when this thing becomes blindingly fast - think what it will do,” he said.
Upgrades on display
The iPhone remodeling effort will be on full view this week as Jobs kicks off Apple’s Worldwide Developers Conference at San Francisco’s Moscone West. The five-day gathering for the first time features iPhone sessions for mobile-device software developers.
The iPhone’s future success will depend on these programs, said Tim Bajarin, president of Creative Strategies, a tech research firm.
“We did not see a real breakthrough with the PC until we saw products like Office, word processing, games - consumer-based software,” he said.
There is also plenty of speculation on other new features. Many users would welcome some sort of global positioning system and an upgraded camera.
But the iPhone, at this point, is more promise than market-dominating power. As of the end of March, Apple said it had shipped 5.5 million since its release last June. The company, which sold 1.7 million during the first three months of 2008, said it will sell 10 million iPhones this year.
But Apple faces a struggle to meet that goal, which is still just a small slice of the overall mobile phone market, said Snyder.
Still, Apple’s iPhone had captured 28 percent of the smart-phone market in the United States by the fourth quarter of 2007 - just six months into its launch - behind Research in Motion’s BlackBerry, which had 41 percent of sales, and significantly ahead of Palm’s 9 percent, according to research firm Canalys.
Perhaps the biggest hurdle the iPhone faces now is its cost. It comes in two models, an 8-gigabyte version for $399 and a 16GB version for $499.
AT&T, Apple’s exclusive U.S. carrier partner, reportedly plans to subsidize $200 of the cost of the next-generation iPhone for consumers who sign up for a two-year service contract.
“The iPhone is too high-priced to be mainstream,” Piper Jaffray analyst Gene Munster said. “We think in 2009 the price will be more mainstream. The iPhone is going to be huge. It’s just taking time.”
3G iPhone today?
Posted by chetan in : 3G, AORTA, Carriers, Mobile Content, Mobile TV, US Wireless Market , add a commentIn all likelihood, King Jobs will be unveiling the 3G iPhone today. Given the user behavior on iPhone, almost any company involved in mobile data and value added services has built an app for the phone even though the subscriber base is limited. The reason is user experience - many times better than anything else available in the market. Like this new service called vSNAX from Rhythm New Media - a mobile advertising company.
- vSNAX’s clip browser enables rapid browsing and channel surfing while still watching your selected clip in the background (swipe up and down to switch channels, swipe left and right on the thumbnails to view clips within the selected channel)
- vSNAX’s custom designed video controls pop up when you tap the screen while watching a video, tapping on the orange button on the bottom right brings up the clip browser
- vSNAX is ad funded by short pre roll video ads similar to Rhythm’s other services.
(Source: Rhythm New Media)
News from last week
Posted by chetan in : US Wireless Market , add a commentJust catching-up on stuff ..
Verizon’s acquisition of Alltel wasn’t that unexpected. It will be interesting to watch the big two go at each other - AT&T and Verizon. Verizon has now taken most of the major bragging rights in the US market. It will be hard for others to catch-up. Then there is the question of T-Mobile. Can it survive as is?
In another news, T-Mobile Sued its long time partner Starbucks of breach of contract for providing free WiFi services.
Mobile Monday - Amsterdam - Recap June 8, 2008
Posted by chetan in : 3G, AORTA, ARPU, European Wireless Market, Japan Wireless Market, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Speaking Engagements, Wireless Value Chain, Worldwide Wireless Market , 4 commentsOn June 2nd, Mobile Monday, Amsterdam hosted its 6th event and celebrated its 1 year anniversary. I must say it was done with such perfection that the event and the organization should serve as a role model for MoMos around the world. First of all, the sheer size of the audience was great - almost 450 people showed up, looked like anyone of importance in the mobile industry in Amsterdam was there. The event was sponsored by the likes of Vodafone.
Yuri Van Geest, Maarten Lens-FitzGerald, Marc Fonteijn, and others were generous hosts and made my trip worthwhile from start to finish.
With Doc
When I go to Europe, I am there for more than 1 wk but this was a quick turn around due to some other commitments back home. Got into AMS early sunday (jun 1), met with Doc Searls (of Cluetrain Manifesto fame) and Yuri was gracious enough to show us around the city which was just waking up. Festivities in anticipation of European Soccer Championship had already started. Got to hang out with Doc quite a bit and get some insights into his VRM (vendor relationship management) project, also the subject of his talk.
At Speaker’s Dinner with MoMo AMS gang and speakers
After a couple of hours of sleep that afternoon, headed to Maarten and Lori’s house for speaker’s dinner. Yuri and gang had lined up 10 good speakers on mobile advertising. Most of them were from Holland, one speaker from Spain, Russell Buckley of Admob from Germany, Antti Ohrling of Blyk from UK, and Doc and I from the US.
Btw, all the presentations and videos from the event are posted at www.mobilemonday.nl so check it out.
The majestic venue - Rode Hoed, Keizersgracht
The venue of the event was an old church with a three layered seating arrangement, pretty impressive setup. The first half of the program was in Dutch which us poor English (only) speaking folks could hardly understand but it was entertaining never the less. The second half was devoted to Intl speakers with Antti going first. As you might be aware, Blyk has turned some heads with its advertising-subsidized business model (MVNO). His message was simple - “give something of value to the customers, and they will respond with loyalty and yes, will be very open to advertising.” So far, they have gained 140K, a good 5-6 months ahead of schedule. After UK, the launch in Holland is coming soon. Btw, did you know, there are over 65 MVNOs in Holland and doing rather well.
Russell Buckley of Admob and Mobhappy delved into some of the case studies and stats from the Admob Ad-Network. Given the tremendous growth in the number of impressions on their network, the insights were quite relevant. I have been communicating with Antti and Russell virtually, so, it was great to meet with them in person.
Next, I was asked to present my thoughts on Mobile Advertising in Asia from our Mobile Advertising and how Asian market is evolving w.r.t. Europe and if there are some lessons we can draw from the various markets. Dutch are very keen on understanding their role in the global economy, places where they can differentiate and compete. I had off-line discussions with several individuals during my stay and the curiosity was palpable. They are always on the look-out to learn about new trends and technologies and in figuring out areas where Holland can add to the global growth. They were especially interested in discussing how the emergence of China and India is going to impact them. I also noticed that the Dutch seemed to be social-networkers to the hilt and reveled in being the twitter-nation. The number of social networking sites they are active on a constant basis - chirping, posting, streaming, joking, posing to various sites was just amazing. Social scientists and new social networking companies should head to Holland to do some primary research of trends to come in the space.
Video courtesy of MoMo AMS
Finally, Doc talked about VRM and his work in the space. Essentially, the idea around VRM is for users to have control over their profile and preferences and instead of companies deciding what’s good for us, we get to decide and ask for the applications, personalization that’s right for us. What a concept 
I had touched on the concept in my first book back in 2000 and other academics have been researching the space using bots and agents. Great to see the progress in the discussions and hopefully some actual implementations.
After a couple of days of rendezvous in Amsterdam, headed back to Seattle. The trick to surviving the jet-lag was never getting used to the AMS time, so even though I had to fly again to Chicago within a few hours after arrival in the US, I managed to avoid serious hangovers.
Overall, I must commend the MoMo AMS team for a job well done and in challenging other MoMos around the world to emulate them in organization and quality of the program.
COM #126 over June 3, 2008
Posted by chetan in : US Wireless Market , add a commentat tarekesber.com. Check out the best entries from last week.
MoMo Amsterdam - a smash hit
Posted by chetan in : US Wireless Market , add a commentGot back a few hours ago and still recovering before I get on a plane again tomorrow morning. Will be writing about the event in more detail over the weekend. Till then you can check out
