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« Open letter to Apple: The killer App is not voice nor music | Main | SecondLife Hype? Or a sign of things to come »

January 10, 2007



i dont actually want a phone (im far to important to be contacted)
i do want a portable os x based website viewer, emailer, camera, ipod, game platform etc


Thanks for a very insightful analysis. Your original post and your responses certainly reveal not only your broad and deep expertise but also your energy, humility, and friendliness. Refreshing.

Just a couple of thoughts to add:

Jobs said "first full year in the market" when referring to the 1% or 10M, so that's CY2008. (The slide also showed 2008.) So it's still a bit ambiguous, but Apple's counting could include from 12 to 18 months of US, 12 to 14 months of Europe, and 9 months of Asia, assuming Apple meets its ship dates.

With that, it's also likely that Apple will reduce prices in Oct-Nov (pre Christmas) 2007 on these announced models and/or add upgraded models, at least upgrade flash capacities). The iPods will certainly be upgraded by then, and as this is the "high-end" iPod, it would have to be upgraded as well. And there will be another price drop and capability upgrade before 2008 is out.

With Apple's "fan" base (and iPod and Mac ecosystem tie-ins), lots of people are more likely waiting for the price to fall below a "magic" threshold such as $400, than comparing prices with other smartphones.

Sleeper Service

Excellent article there. I think the design factor is what Apple are banking on; having dominated the mp3 player market with the iPod they're now looking to merge that device with a mobile communications device and have produced an aesthetically pleasing hybrid to do so.

However, I remain unconvinced by the device itself and it's ability to actually deliver against the more experienced phone manufacturers and the speed of technological development in this market. For example, although the device looks pleasing I wonder about its fragility given its size and open screen. In addition, whilst a touch screen sounds like a good idea, the damage caused by finger grease and scratches will soon mount up. Is it safe to assume that Apple will sell replacement screens at a sensible price or are we looking at another iPod battery replacement scenario?

Looks like a case of form over function to me.


Every last one of my co-workers have iPods, cellphones (smart or not), and a few have Sony PSPs for movie veiwing more so than playing videogames. I think Apple shouldn't have named it iPhone because that is the least of its allure. I was sold at Album Flow and 3.5 screen.

Tomi T Ahonen

Hi radiomoscow, mark, Sleeper Service and listenclose

Thanks for dropping by and posting the comments

radiomoscow - you say you don't want a phone as you are too important to be contacted. You must be kidding or else a very lonely person. Even those who refuse to have a business/work phone, have a mobile phone today to reach their kids and spouses. Every economically viable person on the planet has a mobile phone (and 10% have two), although many of
us hate the phone, so we don't "want" a phone, life today without one is impossible, except for the hermits and truly lonely people perhaps.

But on your point of not having the slot for removable memory and connecting to a PC instead. You must be looking at this from an American viewpoint. In the rest of the world it is not automatic that you have a computer (even if you have internet connection). The total population of mobile phones outnumbers personal computers at more than 3 to 1 - and the gap is growing in favour of mobile phones every year. Yes, if you own a PC, you can synch with it. But what if you don't? If your new smartphone (iPhone perhaps) is your only web access device - over half of internet access in Japan, South Korea and China is from people using a cellphone, not a PC. Now this lack of removable media is a serious drawback. Not fatal, but serious. Like I said the removable media is a bigger problem in Europe and Asia than in America.

Then on cloning, radiomoscow, you are very right. I did not mean - although it was not clear in the original posting, it is more clear here in the replies - that anyone can clone the Apple intuitive iPhone user interface. Only the hardware, the look of the device. But that new LG model looks eerily like the iPhone already. This BEFORE they try to clone it ha-ha. But you are right, the Apple UI will be safe for at least a year, and rest assured, Apple will be releasing ever more clever user interfaces to the iPhone, like they do with the Mac. This is the future for Apple.

mark - "humility" ha-ha, hardly, that was very funny. But yes I appreciate the other comments thank you. We take our blogging very seriously here at Communities Dominate. If you feel strongly enough to post a comment, we - Alan and I - want to make sure at least one of us replies to everyone. We do want to practise what we preach ha-ha, with our book promoting engagement with communities...

To your points mark. Yes on the 2008 fiscal year, I have heard that elsewhere, so they have more than strictly 12 months from the June launch of the iPhone in 2007. That makes the 10 million easier. If you count three linear growth rates from June 2007 to May 2008 with my assumptions, then the rate of sales of iPhones in May 2008 is 1.9 million units in that month (each following month selling more per month than the previous, so in the 12th month we sell much more than one twelfth of the total shipments in the year)

If we move those "goal posts" to the end of the FY of Apple, ie end of September, it definitely gives much better chances, as that extends the back-end when all three markets have iPhones. Yes, makes reaching the 10 million significantly "easier". Meanwhile, since my original posting, as I've mentioned here in the responses, the sticker shock is worse, as the 500/600 dollar Cingular price was
after subsidy, meaning the SIM-free price is somewhere in the 800 to 1000 dollar range. This is seriously expensive cellphones, and the worldwide current market for so expensive phones does not sustain 10 million units. It may be like Maybach discovered entering the race vs Rolls Royce and Bentley, that the total market was not big enough at that extremely high price to sustain the initial target sales figures. We'll see. Apple has a history of pushing the envelope for how much people are willing to spend on a given technology, so its not beyond their ability.

On reducing prices and adding models, I am sure this will have to happen during the first year of the sales of iPhones. They will hear this from every carrier they talk to outside of North America, not only what I happen to ramble on here at our blogsite. Its clear from reading hundreds of comments by Asians and Europeans, that for all the excitement in America, the iPhone is less so in the rest of the world, which is more addicted to their phones and do appreciate how the recent phone models have adjusted to meet their needs.

A good example is the camera. I can understand a touch screen for voice, texting and browsing. But for taking pictures? You have to "poke" at the screen to snap a picture. Bad. That is why high end cameraphones have introduced camera oporation buttons to the side of the phone - they then are on top of the gadget when you use it in camera mode. Bear in mind, last year Nokia sold more musicphones than Apple sold iPods, but Nokia sold twice as many cameraphones than musicphones... Most users value the camera more than the MP3 player, even in the most advanced digital country in the world, South Korea. Recent survey again found camera features number one, while MP3 functionality was fourth on the list of what users wanted.

mark, on the fan base. Good point. I would suggest, that if the fan knows the iPhone will shortly become available on his carrier (mobile operator) network, yes, they will wait. But they won't wait a year. If someone in Asia this summer for example wants an iPhone, learns it will be released in say February, they will go and get an upgrade to their current phone now, and worry about hte iPhone next year as their NEXT upgrade. The problem being, that the target customer of the iPhone - someone willing to pay 500 dollars for a phone - is very addicted, very high-spending, and for that customer it won't be the first smartphone. This summer they'll pick up the Nokia N-95 for example which has a 5 megapixel camera, optical zoom, Carl Zeiss optics, built in flash, is 3G, has DVD quality video recording etc etc etc. The iPhone will seem like a bargain-basement model with no flash, no optical zoom, no 3G etc etc.

An important point to bear in mind is that one or two new models during 2007 is totally not enough if Apple wants to sell 10 million phones or more per year. The big boys in the industry release a couple of phone models per month. Not in the 500 dollar range, but certainly, if Apple's iPhone starts to gain traction in this price range, ALL of the big boys will release MORE models into this space, after all its easier to push up your profits selling 500 dollar phones than 50 dollar phones..

Yes, Apple has to release new phones, I'd say they will release one new model for European launch and one for the Asian launch, and then speed up product development so that by 2008 we'll see something like 6 new models per year. That would sound reasonable for this industry, and not beyond Apple's abilities, but not in line with what they've done recently with the Mac or the iPod.

Sleeper Service - good points, I agree with you. Am afraid the screen replacement issue may be significant. Nokia tests its phones to survive multiple drops from a pocket (don't try this at home ha-ha, and I won't guarantee anything). But yes, modern cellphones take horrible beating - and in your pocket you have your keys and coins etc. Will that big flashy screen remain so for 18 months? But they are not alone in this, many modern phones get ever bigger screens and not all users want clamshells.

I'm actually more concerned about this lack of removable battery thing. I believe this will soon be changed with subsequent models. Apple doesn't understand the travelling road-warrier type who may need two extra batteries to get full use of the phone before it can be recharged again... But they are hearing this at very many discussions already and am sure they will adapt to this.

listenclose - interesting view point. Did you notice Nokia doesn't call its N-series "mobile phones" anymore, they are "mobile computers". Maybe it should have been the iComputer or the iMac perhaps?

Thanks all for writing

Tomi Ahonen :-)



Thank you for very interesting, thoughtful, and in many parts fascinating comments about iPhone and mobile market in general!

I have to agree that it would be very difficult for Apple to compete in this cut-throat market where new models of mobile phones packed with all possible and impossible features introduced almost daily. But is Apple trying to? I suspect that it's not exactly the case.

In other words, iPhone is not going head-to-head with the "best of breed", iPhone IS the new breed. Rather then competing in the "featureset dimension" (even though iPhone offers a pretty impressive set of features) Apple is making inroads into a mobile phone "killer UI". “Bad UI” is probably the biggest factor, which stands in the way of mobile phone makers not selling many more phones then they have already sold.

There could be several reasons people would want to buy iPhone. Personally, if I would buy one in the future, the "killer UI" would be the ONLY reason, with all features being more or less similar to competitors (give or take few megapixels ;-).

I would venture to say that for many users of an “average hi-end mobile phone” the ability to interact with an increasingly complex set of features using much more fluid, intuitive and easy to navigate interface would probably worth more then all the features iPhone is still missing at this point.

Tomi T Ahonen

Hi GoodApple

Yes, I very much agree. Its a bit like a Porsche vs a Mercedes S Class. The S-Class is overloaded with every possible luxury. But if you really enjoy driving, you'll sacrifice on some of the silly and some of even the practical (2-seater vs sedan) but what you get is fantastic driving experience.

I am very sure, for its intended functions (lets ignore SMS text messaging) the way Apple imagines cellphone users use their phones - or Apple imagines that usage will evolve - this is BY FAR The best phone. You could not expect anything less from Apple after the massive jumps to the industry they made with the Lisa, the Mac, the Newton, the iPod and iTunes, etc. Of course it will be the best.

But the caveat - Apple is looking at cellphones - and smartphones - with a distinctly American and IT-focused view. It may do very well in America where smartphones are mostly of the RIM/Blackberry, Palm, Treo etc variety. Those are a puny tiny negligable periphery of the much larger smartphone market in Europe and Asia - where top end phones cost more and users replace those very expensive phones more frequently.

It may well be - I honestly don't know - that Apple is very well aware of the European and Asian preferences and has already taken this well into account in its planning. After all they sell already in those markets and the iPhone subcontracting is in Asia. If so, then the next releases, the European model(s) for the fourth quarter and the Asian models for the Spring 2008 will be significantly more advanced than this first USA model, starting with 3G obviously, which adds a lot to the cost, size, weight, battery drain etc to the phone.

My worry is that Apple hasn't done its homework well enough - or perhaps, it has been guided by myopic experts from North America who still think the Blackberry will convert the world. I wonder if Apple knows that Nokia's Communicator - the first phone ever in that price range of the proposed iPhone and twice that of the Blackberries - has sold more every year since 2001 than all Blackberries ever sold? It has a massive following in the corporate world outside of America, and it is radically different in form factor from the PDA-family business-oriented smartphones popular in America.

And then there is the N-Series. I do think when people put them side to side at a Cingular store next June, and they see that for just about the same money they could get an N-95 with its 5 megapixel camera and flash, and its optical zoom (and Carl Zeiss quality lens), its DVD quality video recording and playback on your TV, plus 3G plus speakerphone plus full WiFi plus memory card slot plus interchangeable battery, if you are already a Nokia user and therefore know its menu structure etc, this will be a rough sale for iPhone, even if you want the cool device. It gives up so much in this price range. Or if you're into SonyEricsson then the choice is really the top-of-the-line Walkman phone, the W950i. An awesome phone again packed with tons of features and ability.

No, not all will go for it, of course many who love Apple would have it no other way. And many will want to have it for its appeal and image. Others will want to try it because of frustration with all current phones. But many of these existing phones have strong loyalty. Try to get a Nokia user to borrow a friend's non-Nokia phone and see how hostile they become...

But yes, I agree with you, what Apple hopes to do with the iPhone is what it did with the Mac, at once making all DOS-based IBM-compatible computers obsolete, and forcing Microsoft to copy the Mac operating system and release Windows. Or what Apple did with the iPod, making the Walkman (remember Sony was pushing the minidisk at the time) obsolete. Now Walkmans are SonyEricsson musicphones that mimick the iPod... Yes, they want to move the goalposts and make the iPhone the prototypical next generation phone. They may well accomplish it.

If they ensure that the iPhone is one of the world's best SMS texting phones, and that its texting can be done single-handed and blind, then really they may have cracked this problem. The rest will fall into place, knowing Apple. But if they haven't - ha-ha - being Apple and obsessing with the UI and wanting to conquer the world, I am pretty sure the iPhone version 2 will be an SMS texting masterphone. Too many of their returned phones in Europe and Asia will scream that message loud and clear and Apple will listen...

My two cents very late in the night, or actually its already morning here in Hong Kong

Thanks for writing GoodApple

Tomi Ahonen :-)

Wolf Fernlund

First of all - A very good article.

However, I have some points that I think should be added:

Steve Jobs was talking about taking 1% of the total global market in 2008 which he equalled to 10M units. He definitely didn´t mean just the introduced models (4GB + 8GB) but the whole iPhone family (including not yet introduced models). So in order to analyze this prediction we also have to speculate on future models and product extensions.

One fundamental difference with the iPhone (and iPod) is that the concept is PC-centric. I e you MUST have a PC (or Mac) to use the product. This is different from nearly every other (smart)-phone on the market. There are some drawbacks with this but there are also a lot of advantages:
- As soon as you put your iPhone in the charger (and the computer is nearby) you could get sync, software updates, backup of your data etc. This means that you really don´t need separate memory cards because everything is handled by the PC application (iTunes). The only problematic situation would be if you fill up your memory while travelling...but you could of course then delete some already backedup photos, music...
The update function is extremely important for iPhone. No other vendor has this system in place (although some vendors have tests going on with specific models, like Sony Ericsson). Today when you go to the service center with a faulty phone, the first thing they do is to upgrade to the latest software version. In a lot of instances it solves the problem! Allmost all smartphones have been riddled with software problems in the beginning of the life cycle. iPhone will eliminate of lot of these costs and problems for the customer (and reseller and manufacturer).
Of course Apple can also get increased revenue if they can offer extended functionality in a (for the customer) easy way (iTunes One-Click).
If battery capacity increases in the future (you don´t need to charge the phone as often) it is fairly easy to use wifi for the same functionality.

As one can se from Jobs demo you can assume that the iPhone has by far the most capacity (both CPU-power, screen and graphics) of all comparable devices. Combine this with the easy software upgrade mechanism already in place and the result will be very interesting developments. Among other apps we could (should?) see:
- GPS (either built in depending on the hardware) or via Bluetooth GPS-reciever (already today there are units similar in size to two lumps of sugar...), why not built-in in the headset? - I haven´t seen this yet...
- IP-telephony, both via cellular and wifi (Skype, SIP etc).
- Much more advanced camera functionality.
- Video recording.
- All kinds of more corporate centric mail and sync features
- Games! The demos so far indicate capacity on par or exceeding the Sony PSP.

A special application area is (as you Tomi have stated elsewhere) is SMS. So how easy can SMS (or any text input) be with the iPhone touch keyboard? First of all, you have to watch the screen all the time. It is unclear how many users with a "normal" keyboard don´t watch the screen on their it´s hard to judge if this is a big negative factor... The power in the iPhone gives some good advantages though, we have to see how much Apple will implement. First of all you can use the whole screen for typing (even widescreen mode), this decreases the need for typing precision. You can also use some predictive types of typing help that continually guesses what word you want to write depending on context. Conventional T9 is not needed because you only have one character per key. One-hand operation is not (at least theoretically) excluded. iPhone has probably the potential to provide very good typing capabilities, we have to see how this works in reality. Typing with a conventional phone numeric keyboard requires quite a lot of training to bring up the speed. Number dialing seldom requires typing as the iPhone in most cases will present the number on screen already (phonebook, received call, sent call, external directory, included in mail etc). To conclude I think that the iPhone UI in total makes it easier to type text and there will of course be anysize Bluetooth keyboards for the hardcore typists.

So far I haven´t seen any info regarding what radio-chips Apple is using but they will probably be able to get the must current designs. (Even though the volumes are relatively low in the beginning it´s a golden opportunity for a chipmaker to introduce new designs). Also remember that Apple is extremely cash rich with a big war chest they can (and will) use to secure deliveries of strategic components. (In the past they did it with flash memory and LCD-panels among other things.) A deal like this could include new memory chips, batteries, GPS-chips, hard disks, radio-chips (e.g. 3G/GSM with low energy consumption), high def small LCDs or OLEDs, etc. This could in some instances lock out the competition. Several of these parts could also be used in future iPods which would increase the volume (attraction) for the supplier even more.

So what kind of product portfolio hardware extensions can we expect? Steve has already helped us with this since the iPhone at the MW keynote was positioned as a iPod/Phone/internet device. So what permutations of these three will there be:
1. *iPod/Phone/internet device* A hybrid 3G/GSM as already announced by Steve.
2. *iPod/internet device* The second one is easy. Throw out the GSM parts, leave everything else and you have a new highend iPod that can be introduced worldwide instantly (no lengthy phone certifications).This new iPod would have som very interesting new features compared to the existing iPods:
- A supreme gaming platform
- Wifi handset to use at home (or att wifi-hotspots)
- GPS navigator with external Bluetooth GPS-dongle
- Email, WWW via Wifi
- A screen with bigger size and higher definition
- Still and video camera
- etc etc
All together a very interesting concept for the new highend iPod.
Of course, without the GSM chips it would be easier to fit a (today up to 100GB) hard drive.
3. *iPod/Phone/internet device* iPhones with more flash memory (16 and 32 GB). Apple is in a dominant position already as the most influential flash RAM buyer in the world...
4. *iPod/Phone/internet device* An iPhone with a hard drive (up to 160 GB within a year) instead of flash.
5. *iPod/Phone*A smaller formfactor iPhone without web, mail and wifi but with the same UI on a 2.5 inch screen. The price could be half of the current model...
6. Accessories: A Bluetooth QWERTY keyboard, a Bluetooth GPS receiver, a combined GPS/headset, etc

One of the largest dilemmas the existing handset industry has today is the following: Hardware features are getting cheaper and cheaper to put in the phones BUT the complexity of usage increases to an extent that people don´t use them. (Personally I have had radio, mp3 playback and videorecording features om my last 4-5 phones but I have NEVER used these features - the usage threshold is just to steep...) The current industry doesn´t seem to be able to solve this in an effective way.

This is also why I think the industry statistics is flawed. Nokia is NOT the biggest seller of mp3 players in the world. Most of their customer didn´t buy the mp3-function (ie were willing to pay extra for it) and most of them don´t use it. In contrast, almost 100% of iPod-owner did buy and are using the mp3-function. To same extent this is also true with camera and video functions. It is a big difference what you have and what you use in your phone - with the current products.

The iPhone UI will solve this dilemma by providing extremely low threshold to use new features.The feature usage ratio on iPhone will be much higher because of the lower usage threshold. Hence a much higher perceived value on iPhone...

Apple has one strength and that is to show customers things they didn´t know they wanted. Very few people in the world expressed their need to have ALL their music in their pocket before the iPod. Today a lot of people think it´s very important...In the same way the iPhone will introduce features and applications that the market didn´t demand before but later will seem selfevident.

To summarize: I am very confident that Apple will sell more than 10M units during 2008.


It looks like one of the biggest (perceived) iPhone drawbacks - questionable usability of a touch-screen keyboard for SMS - could be overcome by using a technology from Immersion Corp. Interestingly, the first mobile phone maker to incorporate this technology is Samsung with its newest SCH-W559 phone (for Chinese market):

Also, very interesting is the comment by Stuart Robinson from Strategy Analytics:

"We believe that market conditions are almost ripe for an explosion in touchscreen phones, and that by 2012 as many as 40% of mobile phones could be using some form of touch sensitive technology," said Stuart Robinson, director of the Handset Component Technologies service at global research and consulting firm Strategy Analytics. "The integration of any technology that improves ease of use will be important for market adoption, and Immersion's VibeTonz technology certainly fits that description."

If such a rate of touch-screens adoption in mobile phones (40% by 2012) would be proven correct, Apple is indeed years ahead of the competition!

Below is the PR by Immersion:

Wednesday January 17, 8:30 am ET

SAN JOSE, Calif. (BUSINESS WIRE)--Immersion Corporation, a leading developer and licensor of touch feedback technology, announced today the new Samsung SCH-W559, the first touchscreen-based mobile phone in the world to use Immersion's VibeTonz® System to provide tactile feedback ( for touchscreen interactions.

The SCH-W559 uses a large 260,000-color QVGA LCD touchscreen display to replace the traditional mechanical keypad as the primary input mechanism. Users receive confirming tactile cues when they press graphical onscreen controls, and they can customize the response by selecting one of five feedback profiles for these cues.

Immersion's VibeTonz System allows touchscreen-displayed buttons to feel more like mechanical keys. VibeTonz tactile feedback can also help improve usability in situations where controls are obscured by fingers or washed out by glare.

"We believe that market conditions are almost ripe for an explosion in touchscreen phones, and that by 2012 as many as 40% of mobile phones could be using some form of touch sensitive technology," said Stuart Robinson, director of the Handset Component Technologies service at global research and consulting firm Strategy Analytics. "The integration of any technology that improves ease of use will be important for market adoption, and Immersion's VibeTonz technology certainly fits that description."

The new phone is being sold by China Unicom, the third largest mobile operator in the world with 135 million subscribers. Designed to roam globally by working on both CDMA and GSM networks, the SCH-W559 includes handwriting recognition, Bluetooth technology, 1.3 megapixel camera, and audio and video playback functions. VibeTonz capabilities in the phone also provide full-fidelity vibration tracks synchronized with eight preloaded ringtones. Vibe-enhanced ringtones enable personalization and add an element of fun to phone use and can help identify callers in noisy environments.

"Implementing keypad functions in a touchscreen has allowed Samsung to give its customers a first-class multimedia and messaging experience in a remarkably light and slim handset," said Hunbae Kim, Samsung vice president. "As the first to integrate VibeTonz technology for touchscreens, we're giving users the reassuring sense of interacting with a real keypad, supplying gentle touch feedback that unmistakably confirms each of their actions. As far as advanced mobile interfaces go, it offers the best of both worlds."

"Our VibeTonz System can provide mobile device manufacturers with an inexpensive enhancement to touchscreen operation," explains Immersion CEO Vic Viegas. "It also provides a platform for a wide range of additional features that can add fun, engagement, and improved usability to mobile devices."

Since the first VibeTonz-enhanced phone was introduced in April 2005, VibeTonz applications for mobile devices have multiplied. VibeTonz tactile feedback for mobile device touchscreens, announced in June 2006, is only the latest application. Mobile games are more fun and exciting with touch feedback similar to that found in console games. Tactile cues for user interface features, like call dropped, key press, and ringing and busy signals can make phone operation easier and more intuitive. VibeTonz effects accompanying ringtones or music are like turning up the subwoofers. And VibeTonz alerts that can vary from a reverberating gong effect to a subtle tapping can be more discernible and memorable. An enabling platform, the VibeTonz System opens possibilities for a fuller, more multisensory user experience -- for example, for a loved one's message to arrive feeling like a beating heart or for a movie trailer to draw you into the exciting motorcycle chase by letting you feel engine acceleration.

About the VibeTonz System (

The field-proven VibeTonz System, comprised of VibeTonz Mobile Player and VibeTonz SDK, delivers a broad range of touch feedback effects to make user interface features, applications, and downloadable, multimedia content more intuitive and engaging. Embedded in mobile devices, VibeTonz Mobile Player exerts precise, high-speed control over the vibration actuator to produce tactile effects with unprecedented subtlety and dynamics. VibeTonz SDK provides cross-platform APIs and a suite of authoring tools for making development and customization of touch feedback effects fast and easy.

Tomi T Ahonen

Hi Wolf and GoodApple

Thanks for visiting and posting your comments.

Wolf - good insightful analysis, thank you. I am pretty sure Apple is aiming to include a range of iPhones before the first year is up and they are almost certainly tied into the scheduling for European and Asian launches. I agree with you on those points. We'll see what forms they take.

The issue of adding GPS and 3G and upgrading several items as you mention, push this phone MASSIVELY up the price range not to mention adding weight and size, and draining battery endurance. Or then requiring even bigger battery which again adds weight and size. Soon the phone is as bulky as the Nokia N-80 ha-ha...

Apple has a serious drawback in achieving the cost savings to the iPhone in that its total production run is puny compared to the big five. Thus the component costs - and the enormous amount of programming required for the software side of each smartphone - where phones five years ago were 80% hardware and 20% software, modern phones are exactly the opposite, 80% software and 20% hardware - so for a run of 10 million phones per year they get much less cost-savings on the various components (radio, camera, battery, CPU, etc) than someone like Nokia which sold over 300 million phones last year of which 140 million were cameraphones and 70 million were musicphones.

Not that Apple can't do it, but rather that with such a small production run, the marginal cost of adding new components is considerably more expensive than for one of the big five to add the same ability. All small suppliers suffer with this. It is simply the nature of the global scale of this incredibly rapidly changing industry.

On the iPod (vs Nokia musicphones) argument, you probably strongly believe what you wrote to be true, but just the very last few months have brought about several surveys of consumer behaviour which prove your assumption to be misplaced (or more likely perhaps, out of date). I'll discuss it in a moment when Apple releases its iPod numbers. But yes, all survey data now prove that the majority of musicphone owners do use them to listen to music, and the total worldwide installed base of musicphones that are used to listen to music, exceeds the total installed base of iPods by more than 4 to 1. No, it really is true that musicphones - most of them, obviously not all - are used to consume music. But that is not really part of this discussion, and if you do feel compelled to argue it after you've read my iPod posting, please join me there in comments and we can continue the discusion there.

GoodApple - Very interesting view, and you may be right. But note that touch screens and stylus screen PDAs and cellphones have existed for years. They are the darling of the American IT press (and like I have joked about it, perhaps reflect the influence of Star Trek Next Generation) but in real use, in mass market phones - which outsell PDAs more than 100 to 1 - they have so far never managed to capture the affections of the end-user.

That being said, if ANYONE can make it happen, I'd say that is Apple. In some ways the iPhone is a grandson of the Newton, perhaps more than a son of the iPod. And the Newton was definitely ahead of its time.

We'll see...

Thanks for writing.

Tomi Ahonen :-)


Moi Tomi!

Like most I'm fairly impressed by the iPhone. Still a lot of questions remain about battery-life, third-party software support (a dealbreaker for many if none would be allowed), reception, how well the touchscreen will work and price once it hits the Old World. And while Jobs on stage can claim the most preposterous things, in IRL the iPhone is far from the most advanced phone out there and many of its potential customers will notice so.

To be honest - I believe the iPhone will sell badly. When the iPod was released in 2001 it more or less lacked competition. The main competition, the Nomad, weighted almost three times as much. And the flash-based competition was only in the 32-128 MB range. So a pocketable DAP with a 5 GB drive hit a close to perfect spot. And no brand-loyalty had been developed so snagging customers was easy.

The situation for the iPhone is very different as it will come to a market already dominated by large players with a huge and quickly evolving lineup. But what else is important to notice is brand loyality. Nokia, SE, LG, Motorola, Samsung etc already have their customers, will Apple be able to convince them to drop their $200 handset for a $900 handset (with cost of plan included)? I don't think so.

So - why did Apple release such a bloody expensive phone? They could easily have put out a copy of a W800i or similar phone and priced it at less then half what they ask for the iPhone.

I would say they did it to make a splash. And a splash it has made. It has put Apple on the map as a phone manufacturer and Apple knows that the future of the DAP is spelled P-H-O-N-E.

Once this is done it will be much easier for them to sell a less expensive model. Much the same way the original iPod made way for the Nano and Shuffle, the two models making up for ~70 percent of all iPods sold. Well, that's my take on the iPhone.

Now, take my hand and let's travel back to year 2000 and the Ericsson R380. A phone which by the way failed because of its lack of third-party programs. Still - I believe it's a close to perfect design for smaller Smartphones. The normal keypad made it easy to use, and the flip-design allowed for a large screen. The screen was also protected during normal use by the keypad.


More thoughts on UI…(I guess, having spent few years developing mobile phone software I’m more obsessed with UI rather then with how many iPhones Apple would sell in a year, he-he).

Most smartphones on the market implement conventional Windows-like interfaces where controls and options appear on-demand and usually after extensive digging through multi-level menus and key-presses. So, today’s “smart” phone/PDA is only as smart as a person using it. To a degree, this is right for any hi-tech device but the rigid and non-adaptive interfaces of many phones and PDAs (including touch-screen ones) leave users wanting something…And here comes iPhone.

Judging by the presentations ( iPhone has an adaptive, intuitive and “smart” UI in the sense that it’s always a step ahead of what user would possibly require in any particular situation. Another thing is that iPhone UI (again, from the presentation) is amazingly fluid, you have a feeling you are really surfing it, not dragging by it. Add some nice touches, such as multi-touch zoom, automatic portrait-to-landscape feature, proximity sensor, ultra-sleek shape (well, you can make your own paper version of iPhone to get a feel:, and you have a device people would want to own as a replacement phone, as a better iPod, as a second phone etc...

Though it may change in a few years from now, touch screen is probably the only way Apple could realize its "killer UI" paradigm on a mobile phone. Of course, nothing is perfect. We shall see in a year but it’s quite possible that by introducing this (most likely iconic) device and triggering the “me too” response from big five (especially if iPhone sales soar), Apple will radically transform the way users interact with a mobile phone in the nearest future, at least until some new and even more intuitive means of interaction emerge.


A few interesting iPhone tidbits...

1. It looks like the iPhone actual retail price is $499/$599 without subsidy, not $900-1000 Tomi was assuming.
"Cingular is expected to sell the Apple iPhone at full price, without the kind of discount subsidy commonly seen in the mobile-phone business."

2. Given iPhone 50% margin we should see Apple dropping iPhone price agressively.

"iSuppli estimates the 4Gbyte version of the Apple iPhone will carry a $229.85 hardware BoM and manufacturing cost and a $245.83 total expense, yielding a 50.7 percent margin on each unit sold at the $499 retail price," said Andrew Rassweiler , teardown services manager and senior analyst for iSuppli. "Meanwhile, the 8GByte Apple iPhone will sport a $264.85 hardware cost and a $280.83 total expense, amounting to a 53.1 percent margin at the $599 retail price."

"With a 50 percent gross margin, Apple is setting itself up for aggressive price declines going forward," said Jagdish Rebello, PhD, director and principal analyst with iSuppli.

3. Analylsts estimate that iPhone sales goals are reacheable.

"Shipments of music-enabled mobile phones will rise to 618.1 million units in 2007, up 39.9 percent from 441.7 million units in 2006, iSuppli predicts. By 2010, shipments of such phones will increase to 1 billion units, as presented in Figure 1. iSuppli defines music-enabled phones as those supporting music file formats, and not necessarily as those tailored specifically for music playback. Thus, this number is much larger than the total available market for music-oriented handsets like the Apple iPhone.Apple’s goal is to capture 1 percent of these unit sales, which seems attainable, according to Rebello."

Apple to sell 12 million iPhones in 2008 at reduced price

4. Here is some talk about iPhone UI. This is almost entirely corresponds to what I was trying to convey...

Apple Ushers in Era of the Fluid UI

5. The iPhone-like device from LG.

Prada To Compete With Apple's iPhone

SEOUL, South Korea -- A new phone could be perfect for fashionistas who might find something from Apple too common.

South Korea's LG Electronics said it will have a new Prada-branded phone in stores overseas next month that uses a buttonless touch screen that resembles Apple's upcoming iPhone. Like the Apple product, you'll have to dig deep into your wallet to pay for it. LG's Prada phone is being produced in partnership with the Italian fashion brand. It's set to go on sale first in late February for about $780 in Britain, France, Germany and Italy, and in Asia in March. It resembles the Apple iPhone, with a no-button interface on a touch-sensitve screen that covers most of the face. The Apple product was launched this month to great fanfare, though it will not be available until June. It will cost $599 for a model with the same eight megabytes of internal memory as the LG.

Tomi T Ahonen

Hi Håkan and Good Apple

Thanks for the comments, and great to see you back Good Apple with so much more

Håkan - I am more and more starting to agree with your view as more info is coming out on what all the iPhone lacks. Jobs was quoted in the press saying that the OS X operating system is not the full OS X but one limited and adjusted for the phones. The OS people out there say this is a surefire recipe for early teething troubles with this, like we saw when Microsoft's Windows OS was ported to the phone. All the more so, as the iPhone project is illustrating a horrifying range of items of evidence that it is a rush job - ie most obviously not even owning the name and yet rushing to announce their first-ever phone 5 months before it even ships.

Other recent discoveries include that it does not support 3rd party applications and users cannot install their own apps, all must be Apple iPhone apps. And its WiFI is crippled (ie no VOIP, no Skype etc).

And you are right, when the Mac was launched the competition on the PC world was an industry that was immature, even IBM's effort was founded on the idea that you studied years at university to learn to operate computers. The Mac had a field day demolising that paradigm and making the PC so user-friendly, you did not have to go to school to operate an extremely complex machine. Brilliant.

The Newton came into a more-or-less virgin market of digital calendars and pocket calculators and pretty well inventing the modern PDA. No competition there.

And when Apple introduced the iPod, that market was dominated by global electronics giant Sony, but at that point Sony had its eyes elsewhere, having concluded there was no relevant money in the portable music business, giving lip service to its minidisk, and focusing on Playstation and PSP, as well as the prospects of its brand new partnership with Ericsson to the much larger phone market. Again the iPod faced no serious competition.

In the phone business you have the big five, and each has stated that the phone is central to their future. And on the periphery about 20 smaller phone makers which tend to push the envelope in innovation and design such as RIM's Blackberry, or in Japan for example NTT DoCoMo - the incumbent mobile phone operator (carrier) is the biggest phone designer and specifies what it then orders from the Sanyos, NECs, Sharps, Panasonics and Sonys who build the devices to NTT DoCoMo's specs.

And there is massive interest from the biggest players in several other industries including the PC industry (eg Microsoft), internet (Google), TV (BBC), music obviously all four global giants, videogaming (EA) etc etc etc. So this is not a dormant backwater industry with puny opponents, this is a very hot industry with very many global marketing brands already in it - think of Disney and its telecoms ventures, Virgin Mobile etc.

Finally there is intensity. The design for a phone takes about 18 months. The lifecycle for a phone is usually 6 months, often even shorter. You have to design into a moving target where essentially two generations of your competitors will shift the game before YOUR product finally hits the streets. That is why so often the major brands falter - and then again recover. Like Nokia missing out on clamshells, and now Motorola finding its Razr slipping out of fashion. What was cool last year, will suddenly also become "so last year". So yes, Apple will find this market much harder than any it has entered before, and the competition much harder.

But here is another vital lesson from Apple. THEY GET IT. They KNOW within their hearts that they have to lead in user ease and satisfaction. Apple won't survive (with its bloated American West Coast IT salary levels in industries typically run by thin margins) - UNLESS it achieves exceptional leadership in its user interface. That delivers the passionate Apple loyalty and it in turn translates into the higher margins (and ultimately higher prices) that Apple consistently charges vs its competitors.

I am certain, that no matter how "incomplete" the first edition of the iPhone may be, the next iteration of the iPhone will be MUCH better. And we should think of this more like the Lisa, not the Mac. The real revolution is in the next salvo from Apple. Watch out for that phone, after Apple has been in this game "for real" and actually talked with the operators in the significant 50 countries for its market.

Good Apple - very good points. I agree with you that the UI is the most important contribution that the iPhone will make and in the long run that is much more important than what exact level of sales the iPhone gets. I do think its pretty pointless to go deep into speculation what the UI can and can't do, before it is out there for us to try it out. I am giving Apple the benefit of the doubt, they have been brilliant at this before, no reason they can't be brilliant at it again. I've said many times the achilles's heel could be a bad SMS text messaging experience - which would doom the phone overseas and cut in half what it can sell in its first year, but even on that - I am certain it CAN be done on a touch screen phone, and the company that could do it best is Apple. That feature does not need to be "better than on the current crop" as long as it is not significantly worse. The other parts of the iPhone shine, so as long as they don't neglect SMS, this is a very compelling device.

I am - like essentially all of us in the phone industry - most interested to try one out and see for myself. Use it for a couple of weeks. Then we can make an honest evaluation of how intuitive and ground-breaking it really is.

For all its simplicity, there are some serious questions about a "buttonless phone" - ie camera function. The trend now in phones is not to remove buttons but to add them. Rather than the soft keys and varying the functionality of what exists, high end phones are adding buttons to the SIDE of the phone, to enhance user experience. This minimizes camera shake when snapping a picture, and provides a much more comfortable picture snapping experience (pressing the shutter on the "top" of the camera, when the phone is held on its side for camera use). My Nokia N-95 has five dedicated camera/video/zoom/flash buttons on its side. When you snap pictures, you don't want to be forced to look at a screen to find soft buttons.

Beyond camera use even more so now with digital TV tuners in South Korea, Italy, Finland etc. When you viewing digital TV (PVR functions like on your TiVo or Sky+ to pause live TV etc) - which is why the Nokia N-95 is a double-slider, one set of controls when you slide it one way (keypad), and another set of controls when you slide it the other way (TV).

All that being said, I am CERTAIN that of any touch screen interface, Apple's will be the one most user-friendly, with the best experience. But I am pretty sure they will have to "reintroduce" a couple of more buttons in subsequent iPhones ha-ha.. Time will tell.

On your second posting. Fascinating info on the subsidy, that Cingular's deal with the iPhone breaks the industry norm. Good news in some ways obviously, meaning the real street price is much less than I thought - but I've seen other analysis suggesting otherwise. We won't know for sure until we get the first phones on the market, SIM-free. The lower the real price of the iPhone, the better it will sell obviously. At 1000 dollars it goes against very powerful superphones (eg N-93) and fights for a tiny market. At 500 dollars (SIM-free) it sits in mainstream smartphones, where its feature set is competitive and nearly 10 times more devices are sold at those price points.

On the "analysts say it is reachable" ha-ha, yes we'll find lots of analysts saying lots of things about the iPhone - and I'm obviously one of them. iSupply is a legitimate outfit, but it is very IT-centric and America-centric. I'd be more interested in what the experts in the phone industry are saying - Informa/IDC, Gartner, Ovum, Yankee etc. If you look at the recent other major thought pieces by experts in telecoms, handicapping the iPhone's chances, they tend to fall into the view that for America this phone is a major threat, but in Europe and Asia it is only lukewarm.

Consider Japan. In my recent breakdown of the musicphone market, I found that 15% of the total musicphone users are in Japan. Japan is gadget-crazy and their consumers are very fashion-conscious so they will easily flock to what is the newest, brightest and best. Over 20% of Japanese already carry two phones like in Europe. Apple is a beloved brand in Japan as is the iPod.

You would think the iPhone is set for Japan (apart from there being no GSM in Japan so we need either a CDMA version or a WCDMA ie 3G version or both). But the future of mobile phones already exists in Japan. There was a story on TV on one of the news channels (I think CNN, could be CNBC or BBC) where they asked Japanese consumers what they thought of the iPhone. No dramatic excitement, nothing like in America.

But here is the killer. In Japan all three mobile operators (carriers) support Felica the mobile payment system. You can pay at over 75% of all points of purchase using Felica in Japan already. All subway train ticket points, vending machines (Japan is vending machine crazy), convenience stores, petrol stations, sushi bars and hamburger restaurants, hotels, airlines, everything. ALL take Felica. Any modern phone in Japan has Felica. Of course. It is that convenient, you couldn't imagine a phone without it.

Now going to the iPhone would be like stepping into the stone ages, like someone offered a cellphone which only worked with a wired connection to the wall...

So you think Felica is easy? Three problems. One, it is yet another radio unit that needs to go into the phone. Weight, size, cost, battery life etc penalties. Then there is the integration with the phone and the payment system. This is rather complex integration into the OS of the phone. Have a guess who controls this, NTT DoCoMo. So suddenly Apple has to yield control of parts of the OS to an operator (which also insists on end-to-end control). Oh, and yes, it means paying a license fee to DoCoMo for every Felica phone sold to operators on any network in Japan.

Yeah, Felica is an absolute deal-breaker for the 47 million in Japan who consume music on their phones today in considering the iPhone. Mind you - Apple will have to do this, like I said, Apple can't really imagine 10 million sales worldwide without including Japan.

Ha ha finally on the LG Prada. I did suggest in my original blog post that the LG Chocolate phone was particularly suited for launching an iPhone clone (in form factor obviously, not in user interface) and here we go. I thought they might get it out by June, but they are already launching next month... And the Chocolate is such a hot musicphone that in America it propelled LG to number two and is the best-selling musicphone with Carphone Warehouse, Europe's largest phone outlet, etc. So this is not like the clumsy Motorola Rokr, this is a seriously popular musicphone already. Toss in iPhone looks, and the mass market won't really "need to understand" why an iPhone user interface is so much better. LG has almost a year to win the hearts of European and Asians who like what the iPhone looks like...

And yes, it won't be the only clone iPhone..

But again, you are right, the big story is the advances in the UI, and how big that lead will be, will only be known for sure in June (assuming it ships on time. I am VERY concerned about all this urgency and lack of completeness to the marketing, not at all like Apple's usually slick marketing machine).

Thanks for writing

Tomi Ahonen :-)



Thanks for your very informative reply!

Sure, we should wait an see how iPhone would stand against competition in 8-10 months from now. I bet Jobs and the gang understand the mobile market well enough to do an appropriate adjustments to stay competitive, e.g. reducing price, let's say to $399/$499, and adding few "missing" features before the end of the year.

BTW, press already touting LG's Prada as the "look-a-like" and "touch-a-like" phone, which beat Apple to the market and I guess similar models from Nokia, Samsung and the rest not far away, so Apple should watch out!


Interesting Business Week article

The Real Genius of Apple's iPhone

Word is the newly announced phone from Steve Jobs will transcend superficial design and deliver user-friendly function and limitless adaptability

by Jessie Scanlon and Helen Walters

Apple's (AAPL) introduction of the iPhone on Tuesday (see, 1/10/07, "The Future of Apple") underscores the lesson Motorola (MOT) learned with the Razr: A sleek, sexy design can create lots of buzz and drive sales, but without smart, usable interface design, consumers will end up angry and disinclined to buy your next "hot" mobile-phone offering.

Design has nominally been a priority of cell-phone makers for a while now, at least since Nokia took the No. 1 spot in the market, thanks, in part, to its focus on color and style. Samsung played the design card in its rise. Then came LG, with its "Chocolate." But design, as these companies have embraced it, is little more than styling. It is design in the service of product lust, rather than user experience.

In truth, the handset makers aren't entirely to blame for the poor customer experience so typical of the mobile-phone industry. Not only do the carriers control the buying experience (something Nokia is trying to change, see, 6/28/06, "Nokia's Ritzy Flagship in Chicago"), the services, the network that determines the speed and kind of services that can be delivered, and the customer service, they also flex their muscle when it comes to the handset. By the time the handset makers and the carriers have fought out the fine points of a design that will work with the network, and the services that will drive revenue, the user's needs have long been forgotten.

Ready for a Friendly Phone
Now Apple must join with one of those very carriers, and its choice, Cingular, has already proven somewhat controversial with customers unimpressed with its existing service. And while Apple undoubtedly retains the upper hand, the partnership requires Apple Chief Executive Officer Steve Jobs to loosen his famously tight grip. Apple won't have the end-to-end control it has with the iPod, and when the iPhone goes on sale in June, consumers will still have to contend with the typical cell-phone experience: the unappealing store, the confusing plan options, the two-year contract, the less-than-stellar customer service.

But intuitive UI (user interface) and consumer-focused design is something that Apple does know all about—and seems to have retained control over. The navigation system of its iPod was both radical and defiantly simple—and it is with this same philosophy in mind that Apple has mounted its charge on the cell-phone industry. For some, it hasn't come a moment too soon.

"Finally we have what appears to be a cell phone designed for ordinary human beings, not just for children with incredibly thin fingers, brains of scientists, and better than 20-20 vision," says London-based designer Malcolm Garrett, creative director at the Applied Information Group. "Able to build on its proven strengths, Apple has taken the route of adding mobility and connectivity to an established and thoroughly considered operating system to give us a phone, Web browser, and media player that works well for each function."

Mac Operating System
"The clever, context-based navigational system cuts out irrelevant choices and provides the intelligent and gratifying user experience we have come to expect from Apple," agrees Jakob Trollbäck, creative director of New York-based design agency Trollbäck + Co. "By eliminating intermediary input devices such as keyboard or stylus, control has become tactile again. My Blackberry Pearl has 29 keys and you need to use complicated sequences involving modifier keys to do just about anything. Getting rid of them all in one swipe, the iPhone has an interface that is digital in every sense of the word."

Incorporating the existing Mac OS X operating system into the unit is a major step forward, one which Adaptive Path President and usability expert Jesse James Garrett reckons will provide a major headache for competitors. "Apple has been able to work backwards from its own OS, making adjustments to work on a smaller screen," he says. "This is not functionality that you can tack onto the existing phone operating systems out there. That has to be very troubling to the competition because it's going to take them years to develop similar technical sophistication. Mobile-phone Web browsers are uniformly awful." The iPhone, of course, uses Apple's own Safari browser.

Fluid Function
While for now, the functionality is not as extensive as some of the existing smart phones or MP3 players on the market—a reflection of Apple's preference for simplicity—it's clear that the device has the potential to be developed in many ways.

"Its perfectly ambiguous form can take on just about any personal-sized functionality," says Pentagram partner and interaction design specialist Lisa Strausfeld. "It's a truly chameleon device that, in theory, can become something new years after you purchase it. On a more pragmatic and even environmental note, one can now purchase a new phone, camera, PDA, MP3 player, or fill-in-your-personal-size-device-here through a simple software download."

There are a lot of neat touches that will also likely be influential. Sensors in the handset detect when the phone is in use, freezing the screen and preventing an overactive ear lobe from ending a call. Other sensors can alter the landscape of the screen, to make long-form reading less strenuous. In fact, many of the more revolutionary design aspects of the iPhone are—in hindsight—quite simple, provoking the much sought after 'Why didn't I think of that?' envy so often prompted by a genuinely good idea.

Sign Language
One of the biggest challenges the designers faced was how to provide a suitably sized usable keyboard—something every PDA or smartphone maker has struggled with. Apple bypassed the need for a button-based keyboard by providing virtual, on-screen QWERTY keys instead—and incorporated various tricks to enhance the typing experience, such as predictive spelling and what MIT Media Lab professor John Maeda describes as the "hover-expand" behavior of the keys.

"Each key can remain small and within an orderly grid at first glance; then, by hovering your finger, the on-screen key is made bigger so that you can see it better," he explains. "It's a fairly simple idea and probably not brand new, but definitely a step forward in the awkward task of typing on a tiny virtual keyboard."

"The multitouch interface is a breakthrough," adds Jesse James Garrett. "We've seen interfaces like this done as research projects, in academia, but this is the first time that someone has brought it to a consumer product. In [Jobs'] demo, the functionality they showed only scratches the surface of what could be possible."

Opening the Field
"Scratch" is the operative word here, and concerns have already been raised about the practicality and durability of the iPhone's large, unprotected screen (and how to keep it clean). Questions also remain unanswered about the compatibility of a phone (for which battery life is paramount) and a music player (which is often used for hours at a time). Putting the two together could significantly limit a device's lifetime.

"With so much technology packed in and with all its sensors and multitouch screen, there's a lot that could go wrong," says James Tindall, a British Web site and software developer and designer. "But it's clearly a radical step forward. For me, the iPhone is a Phone 2.0. Like Web 2.0, it just does everything it should do, in the simplest, clearest, most intuitive way possible."

One thing is for sure: The gauntlet truly has been thrown down. No doubt between now and June, when the iPhone is released, competing cell-phone, smartphone, and PDA makers will be scrambling to come up with devices that have the look, feel, and functionality of Apple's offering. Let's just hope that the hardware makers and carriers alike grasp the power of user-driven design and great customer experience. Like the music industry before it, the cell-phone industry needs a shakeup.


Here is the awesome article (IMHO) about iPhone...

"One thing the analysts do agree about is that, whether the iPhone is a media device, a regular phone, a smart phone or something else entirely, whether it will sell by the boatload and won’t sell at all, it’s very design will change the nature of devices we’ll use in the future."


Here is the brilliant unbiased article about iPhone UI by Bruce Tognazzini, who worked at Apple for 14 years and was a founder of the Apple Human Interface Group.

The iPhone User Experience: A First Look


"Who’s talking?
Bruce Tognazzini was hired at Apple by Steve Jobs and Jef Raskin in 1978, where he remained for 14 years, founding the Apple Human Interface Group. He has been a harsh critic of many of Apple’s later innovations, including the notorious round mouse (“farcical”) and the Macintosh Dock (see: Top 10 Reasons the Apple Dock Sucks). He is almost as stingy with his compliments as his partner, Don Norman. That makes this particular column, largely positive, most unusual."

"I have yet to get my hands on an iPhone—frustrating! (You can imagine Bill Gates’s frustration. He probably has a cadre of engineers ready to take it apart, put it back together with a couple of screws missing, and paint it brown.)"

"The industrial design is brilliant. Apple has created another piece of high-tech jewelry. Some fogies of advancing years have suggested the initial price point of $499 is too high. They fail to understand: The “cool” of owning this phone, particularly for the early adopters, is worth an easy $497, bringing the phone itself down to $2 even.

For those who might doubt such a high value of cool, consider the self-winding Rolex, which sports 1/10th the accuracy of a Timex at 1000 times the price. With Rolex, the technology is grossly inferior, and still people will pay thousands to own it. With the iPhone, the technology is clearly superior."

Tomi T Ahonen

Hi Good Apple

Nice articles, thanks. Do you want to come over to the Communities Dominate blog and post for us regularly, ha-ha...

Seriously, we really appreciate it. Very good hunting of relevant additional dimensions to the story.

Tomi :-)


Hi Tomi,

Thanks for your proposal. I'd love to but not sure if I have much time...

Here is an article, which echoes your comments about iPhone tough sell in Japan:

Sorry iPhone, Japan's Not Impressed


BTW, I spent a few years at Nokia as a Software Engineer, so we have something in common ;-).

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