Open letter to Apple: The killer App is not voice nor music

Dear Apple Inc

(UPDATED AND CORRECTED 12 Jan 2007)

So we now know the iPhone will launch in America in June on Cingular's network, and in the fourth quarter in Europe, and in Asia in 2008. It will cost 499 dollars for the 4GB model and 599 dollars for the 8GB model (Update: subsidised prices for 2 year contract). A big bright colour screen of 3.5 inches is very big for a phone. With the iPod music functionality and a 2 megapixel camera (and I believe it is a 3G phone It is not a 3G phone), it is slim, slick, sexy.

Apple's Steve Jobs was bragging about how much this phone is better than the existing crop of smartphones, and drew parallels to how the Mac changed everything in the PC world. A significant part of that is the lack of traditional alphanumeric keypad. Instead the iPhone will have an intelligent touch screen. This may well be the biggest change in mobile phone user interfaces in years.

I wish Apple all the very best with this venture. But I don't want Apple to fail in its quest by not understanding this market. Thus this open letter to Apple.

You are entering the mobile phone market. A market where 950 million handsets were sold last year, and a market which is fiercely competitive and profits are hard to come by. The market is very fashion-oriented, with new models released monthly. The development cycles are long and hitting the right mix of feature set, weight, battery consumption, cost is challenging. I am sure you have researched the market well before joining it, but am afraid you may have been blinded by being based in America - the laggard in mobile telecoms - and having your roots in the IT industry, which is almost diametrically opposite to the telecoms industry among engineering sciences. It may give you great competitive advantages to approach the industry from a fresh angle, but I hope you understand what makes this industry tick. People do not replace automobiles every 18 months, nor laptop computers, digital cameras, plasma screen TVs, Playstations... nor iPods.

But the mobile phone replacement cycle is 18 months and shrinking. Your target market - those who can afford a 500 dollar phone - are the addicted ones, who have two phones and their effective replacement rate is 9 months (and shrinking). The most widely used gadget on the planet, the mobile phone has one particular aspect to it, which makes it so very appealing. And that is not well understood in America, and it is usually totally misanalyzed by those whose background is the IT industry.

There is only one killer application in current (2.5G/3G) mobile phones. It is not voice calls. It is not music. It is not the camera function. The only killer app is SMS text messaging. Ever since Nokia first released its global messaging survey in 2001, to operator studies from the UK and France in 2002, to customer surveys in Malaysia, Singapore and Indonesia in 2003, onto South Korea and Japan; to the university study of phone addiction by the Catholic University of Leuwen in Belgium; and even now proven by the first American survey of SMS usage by ComScore Media Metrix - every scientific survey on the topic verifies that SMS text messaging is addictive. And that heavy users of SMS prefer text messaging to voice calls. Already more than half of British total population prefer communicating via SMS than voice on their mobile phones.

To draw a parallel. Apple obviously knows the Blackberry. Many call it the "Crackberry", as in crack cocaine the drug, because its users become so addicted to it. They find two powerful benefits - speed and privacy in their Blackberry usage, and they discover a concept we in the industry call "reachability". But here a valuable insight. Using e-mail wirelessly on the Blackberry is definitely addictive, but at a very mild level. It is not like crack cocaine, more like smoking cigarettes or marijuana; the MUCH MORE ADDICTIVE service is SMS text messaging (which can be done with a Blackberry of course, the Blackberry does do SMS as well). The "crack cocaine" heavily addictive communication service - much more addictive than wireless e-mail on a Blackberry - is SMS text messaging. That is why those who have never tried SMS - American executives - fall in love with the Blackberry. But that is also why European and Asian executives are lukewarm to it. European and Asian executives are already addicted to the much more potent service - SMS text messaging.

If the Blackberry is addictive because it is fast and private, and offers reachability. It is at its peak effectiveness when the other person also has a Blackberry. There are only about 6 million Blackberry users in the world. Now consider SMS text messaging. It is faster than the Blackberry, it is much more private (no corporate e-mail servers) and offers reachability of course. But its reach is 2.7 billion people. If your wife doesn't have a Blackberry, you can still reach her via SMS. If your kids don't have Blackberries, you can get a similar experience of two Blackberry users exchanging e-mails, if you use SMS with your kids (or wife). Now consider the opposite effect, for all who don't have Blackberries, THEY can achieve the "Blackberry benefit" already today, using their basic cellphone and SMS.

Also, do not for one moment listen to any experts who make comparisons or parallels with e-mail. SMS is not the dumb little brother of e-mail. E-Mail is last decade's communication method. Clumsy, slow, formatted. SMS is the next generation of messaging. Young people in South Korea say nobody uses e-mail except to communicate with their elders. Young people in America say, e-mail is so last year. No matter how much you may understand e-mail and perhaps wireless e-mail, that is not how SMS is used. Don't make parallels from e-mail, but rather research SMS usage. It is the most powerful time-management tool BY EXECUTIVES from Japan to Scandinavia to Israel to Italy to Britain.

So Apple executives, as you consider the iPhone and are finalizing what it will do and how, first study the addiction of the Blackberry. Then go and study the addiction of SMS text messaging.

Then understand. Those customers you are fighting for - who are cool enough to want an Apple, wealthy enough to afford the iPhone, and as addicted to cellphones to want a 500 dollar smartphone - this is a segment who is already addicted to SMS (remember that already even in America, 42% of Americans are already using SMS).

So my point is this - going without a keypad is a bold, brave move. Many will applaud it, others will doubt it. I want it to succeed. So please, Apple, make sure your SMS text messaging ability is as good as the current crop of top-end phones. Recognize that SMS is used by busy executives who carry a laptop briefcase in one hand and operate their phone in the other hand as they hussle from the elevator to the cab; and by college students who send secret messages to their friends in class, with the phone out of view. Your iPhone will need texting ability that can be used single-handed, and without looking at the phone.

Make sure your iPhone is at least on par with top text messaging phones out there today. You have six more months to accomplish that. But please, Apple do it.

If you don't , I am afraid you will fail. Voice is NOT the killer app for current mobile phones. Neither is music; neither is the camera feature; neither is video. The killer app is messaging, specifically SMS text messaging (and very rapidly also mobile IM ie Instant Messaging, and other collaboration such as mobile blogging). Understand that those phones that are not good at messaging are going to be returned to the store by dissatisfied customers, and the mobile operators will be forced to substitute alternate phones. You don't want phones returned because of poor texting, as Nokia learned with its unconventional keypad designs in 2003 - and rapidly corrected this colossal error.

To use an analogy, imagine driving a car (1.8 billion people on the planet already KNOW how to send SMS text messages, in fact twice as many people as who drive cars). Everybody knows the pedals of the car, the accelerator and the break. You don't have to look at the pedals to move or stop the car. Now, consider if BMW released its new supercar, but the driver always had to LOOK at where to place the feet? You couldn't look at the road when you aimed your feet. Because people are accustomed to how driving works - and moving the car is the killer app for the car, not its sound system - we all expect every car to have its pedals in the familiar way.

But if you make sure the iPhone is very good at messaging, then your users will also remain loyal to the iPhone.

Our industry needs innovation, and Apple is nothing if not innovative. Only I wish your cleverness in the user interface did not kill the goose that lays the golden eggs. Do not make this a bad texting phone, please. We need Apple in the industry to foster competition in innovation.

Yours Truly

Tomi T Ahonen   :-)
four-time bestselling author and expert on mobile phones and their services
lecturing at Oxford University on mobile services and convergence
and a lifelong fan of Apple

THREE  RELATED POSTINGS:

UPDATE FROM JUNE - I've done a major revision of the market analysis, now with break-down of the regional sales as well as quarterly projections, at this blog: Crunching the Numbers for iPhone

I have posted a long analysis, handicapping the chances for Apple to reach its aggressive 10 million unit sales in the first year, with contrasts between the American, European and Asian markets. That analysis is at:

http://communities-dominate.blogs.com/brands/2007/01/handicapping_th.html

I also wrote on the striking similarities between the recent award-winning large-screen variant of the LG Chocolate, which is eerily similar to the iPhone. See my blog and links to pictures of the two side-by-side, at this posting:

http://communities-dominate.blogs.com/brands/2007/01/creepy_iphone_i.html

Comments

[Fidel Guajardo]

Here is my take on three future killer apps for the iPhone:
iShopper,
iPlacer,
iGuide
http://fidelguajardo.blogspot.com/2007/01/iphone-killer-apps.html

[Tomi T Ahonen]

Hi Fidel

Thanks for visiting and posting the comment. Yeah, I think we have a lot of fascinating application potential with OS-X - and the Apple developer community. I think some of your apps might need GPS, and so far I believe (but don't know) that the iPhone won't have GPS in it, at least the first version. Eventually most cellphones will have GPS of course, as they are now starting to roll our models with GPS built in. And even before GPS there are many location-based technologies of lesser location accuracy that can be used to deploy such services. These depend on the cellular network, like Cingular, to detect the location.

Thanks for visiting and commenting.

Tomi Ahonen :-)

[Maurice]

Very good.

Its quite cute how americans think there mobile phone system is not a 3rd world one.

Rgds Maurice

[Tomi T Ahonen]

Hi Maurice

Yes you are so right. Thanks for writing

Tomi :-)

[radiomoscow]

it seems apple have turned crude smsing into a simple fast effective tool superior in everyway to all other phones
smsing in its current form is broken. apple have fixed it

look at the demo of smsing on apples website, then you may wish to rewrite your open letter
reviewers who tried the phone all say the keyboard is very easy to use although lacking tactile feeback

[Tomi T Ahonen]

Hi radiomoscow

Thanks for writing. As far as I have seen so far, the iPhone SMS is designed to work using two hands. And it seems to be difficult to operate blind (ie without looking at the phone)

We have to wait until we get to use one to know for sure, but a very strongly echoing theme in European and Asian reviews of the iPhone the past week has been that it must have good SMS - that it must be able to be done single-handed, and blind.

If that new interface can do that, it can be a huge hit. If not, the iPhone will disappoint severely outside of North America.

Thanks for writing

Tomi Ahonen :-)

[Guderian]

Hi Tomi,

I think your wrong. I'm european and your claim, one can SMSing blind on an european phone is nothing but a joke. Instead you need a magnifying glass to see the three or four micro letters next to the numbers. I don't know anybody who memorized the letters position. So that he or she can write blind SMS. Virtually everyone is looking on the phone while SMSing. And I even doubt that it is absolutely necessary for market success, that it's possible to type single-handed on an iPhone. Everyone has two hands, also when you're not at home.

Don't forget Apple is NOT producing cellphones like Nokia does. It actually presented an iPhone. Meaning in this case the mp3 Function IS the killer application. The providers won't make money with it, but Apple will. And consumers will want to have an iPhone because of Music not because of single-handed blind SMSing. And providers will do what customers demand.

[Gabriel]

I do agree with Tomi. Lots of people sms 'blind' or 'semi-blind' (I am in, if that helps at all, "Asia"). I suffered grave withdrawal symptoms when switching from an alphanumeric phone to my smartphone with built in qwerty keyboard and would certainly factor that in my considerations when purchasing a new one in the future.

Here are some points:

1. Yes. SMS is a killer app in that it is widely used and drives hardware sales becos of its use. No sane phone comes out with a phone without SMS.

2. The alphanumeric interface of SMS is preference #1 for most people. mini-Qwerty is 'passable' and sufficient compromise for smartphones (i eventually got used to mine)

3. However, smartphone users have needs beyond sms'ing, depending on how 'smart' they really want them to be (from pro office users synching with their calendar online to younger adults who just want "phone + music." I guess Tomi's point is that the majority of the iPhone's target market is the latter category, and that means the sms interface is of supreme importance. To which I agree.

Gabriel

[RAMSES]

Hi, I am European, having lived in China for more than 5 years. In China, 90 % of my media communication was by SMS, 8 % by email and 2 % by voice. In China you don't pay for receiving SMS but you do need to pay for receiving voice calls (as in many markets in Asia). In China you can send 10 sms for the same fee as 1 minute voice call. SMS can be done privately in public, voice call can be heard by anyone around you. A very popular application is a small sticker that you can paste on your screen, that avoids people can read your screen from aside. All signals that SMS is far more important than voice. The position of the letters is perfect, I never need to watch my keyboard when I type messages. I can type with one hand, while I drive car, or when I am in a meeting, and my phone under the table. I hate the applications with qwerty keyboard, as I always have to look for the letters. Actually, I hope that manufacturers of cell phones develop short cuts for popular key combinations, eg. the "smileys". So, I completely support Tommi's point. SMS is the BEST option on my phone.

[Tomi T Ahonen]

Hi Guderian, Gabriel and Ramses

Thank you for writing. I think you three are a perfect sample of what is out there. Some don't use SMS (still a little under one third of all mobile phone owners don't use it at all) or use it only limitedly.

Then there are those who do use it regularly, but aren't really texting blind. They do pick up rather fast the keypad alphabetic arrangements though.

And then are the heavy users who do a dozen SMS per day or more (one third of Korean youth average over 100 SMS per day, in Britain its 10% of the youth who do that)

Guderian - i understand your feeling, you clearly are not yet addicted to SMS. But there is now academic study of the addictiveness of SMS text messaging, after the first such study came out by the Catholic University of Leuwen in Belgium. Numerous studies since have proven it. There is an increasing part of the population who use SMS very heavily. You are not like that, obviously. And perhaps your peers are not either. But absolutely, definitely, according to all published surveys and studies in Europe, it is a universal trend among the youth, that they perfer SMS to both e-mail and voice calls. So while you are not like that, very many others are. Over 85% of Europeans use SMS text messaging (more than twice the number of people in Europe who use e-mail). Toss in addiction, and very rapidly the usage grows. And when you start to send more than one per day, you learn the keys...

I understand Guderian, that you are not like that yourself. But I have given several studies that prove SMS use and addiction. If you claim this is not true, can you provide me one study or survey which supports your view? Or can we accept that the majority is not like you are?

Then Guderian, on music being the killer app. It isn't. To upgrade from a 79 dollar iPod Shuffle to a 500 dollar iPhone, you won't pay that money to REPLACE your music experience. It can be done for a tiny fraction of the price, just as well, with the iPod shuffle. There has to be a reason to buy the iPhone with the iPod funcitonality, and that is the more costly - and necessary - connectedness that cellphones provide. Voice and SMS. Sorry, again that is the case. If you don't care about connectivity and just want music, you'll buy the iPod.

Gabriel - yes we both agree :-) But here just a thought I've suggested many places. Regardless of how good or bad the SMS functionality happens to be in the first iteration of the iPhone (and it may be as good as existing phones, certainly Apple is capable of doing that) - the SUBSEQUENT iPhone models will rapidly gain in this area. Apple will hear from every one of some 200 mobile operators when they talk to them, that every one says "oh, how is SMS on this phone" - and if the first model is not good, it will be one of the biggest reason for returned phones - and cause operators to complain. So Apple will fix it fast regardless, and keep improving this vital feature.

Ramses - Thanks ! Nice summary of the role of the mobile phone in China today. You'd find very similar thoughts with your peers in South Korea or the Philippines or Indonesia etc.

Thanks for writing

Tomi Ahonen :-)

[Mikey-VH]

Tomi, get me out of this shithole Finland. Been working with killer apps for 3 years. That means, they've been around for 3 years. It's the companies who don't even open their doors to listen what I have discovered. And believe me 3 years is a long time to stair in the mirror..
One thing about R&D process is always left out of conversations - it's the creative minds ability to produce a working consept. That little detail is my specialty. My little list of consept designing could be:

- What you're eating is what you'll produce
- silence has every answer ready
- take your time - prefer taking it outside society

I'm ready. Are you?

+MVH

[AC]

Tomi, I sincerely hope that Mr. Jobs and co. receive your letter!

As an avid Mac user one of the killer apps I'm always on the lookout for is a means to back up my texts onto my computer. The only one that's worked for me is this one:

http://www.macmedia.sk/pa.htm

Maybe Apple will see fit to offer SMS backup on the iPhone. I personally think they're missing a huge opportunity to offer over the air sync of PIM data through their .Mac service; I wrote about it on my own blog for anyone interested:

http://acurrie.wordpress.com/2007/01/10/iphone-not-quite/

[nick w]

i use www.peekamo.com to send and receive sms txt messages. they have a web based inbox that I can manage by txt msgs. they use real SMPP to send messages, and its free to send and receive messages form peekamo.com

check it out.

[Tomi T Ahonen]

Hi Mikey, AC and nick

Thanks for dropping by and posting the comments

Mikey - I hear you. Must be nasty now in winter. Hang on, some day they will understand..

AC - thanks, and very good point about PIM.

nick - thanks, good to hear about peekamo

Thanks for writing

Tomi Ahonen :-)

[Averie]

I enjoy reading ur blogs now. Thanks for ur work.

What I expect more of iphone are the TV connection as they are doing in Japan and the MSN or other instant messaging services.But seems IM applications are not incorporated in iphone. (it possible to install it yourself?)

For SMS, from the demo from apple's website, it is possible to do it with one hand. But you can't move your eyes away from the screen.

[Tomi T Ahonen]

Hi Averie

Thank you for commenting

Yes, we have to see what the iPhone ends up actually having and how it ends up actually performing. Be certain that Apple will on introduction already be remarkable in its usability, and I'm more interested in the second generation of the iPhone after they learn from users and THEN push the envelope even further.

On user-installed applications, many experts of the mobile space have looked at early descriptions of the operating system and its compatibility, and say the iPhone is not a "real" smartphone, in that it will not allow completely user-installed applications. Apparently there seems to be a limited set of closely controlled Apple branded add-ons.

Also Apple's approach to mobile operators seems to go very deeply into the operator's processes and data such as with the voice messaging they discussed. This would also mean that some network applications like IM would be more controlled than perhaps on a PC or another smartphone.

But I'd say lets see. Apple is now getting a massive amount of feedback from the operators they are talking to, and various experts and pundits, so some of the early assumptions and even statements from Apple can change. Lets see what the iPhone really is, and we'll find out in June.

Thanks for writing

Tomi Ahonen :-)