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October 19, 2009


Gibson Tang

Hi Tomi,

Great insight on the missing Nokia market share. As for Apple spreading it's product portfolio. Don't bet on it as Apple is not in the business of doing such stuff. To do that would introduce device fragmentation which is plaguing every other mobile handset manufacturer.


"Now, Apple, when can we see more than one model per year? Isnt' it about time to spread your product portfolio?"

Apple has two models - 3G and 3GS - still for sale. So obviously, you mean different form factors, as opposed to just different capabilities. And you think Apple needs to do this in order to reach a greater portion of the phone market. So let's look at what I think Apple thinks.

1. Let's start with "cheaper". At $99, there's not much further down to go, and by next June, the 3GS will likely be $99 (the 3G will be retired); someday they'll be at $49. But to really get cheaper, I assume you want a phone that doesn't require an additional data plan. Apple is not going to go there, because it's their view that over the next 5-10 years, billions of people will get a data plan (even those who use it just for voice data because data plans will be all that there is.) A huge billion-plus market is coming to them (and Apple doesn't care about the other billions who want low-margin, commodity phones).

2. Now on to "fashionable". Here, Apple's view is that, in between the annual hardware upgrades, the "fashionable" changes will be done through software, both in new OS releases, as well as in new apps. The iPhone keeps changing on a daily basis because of apps; one can stay fashionable by buying and installing the most "fashionable" apps. I would hope Apple has an OS release, like 3.2 or 3.5, before Dec, though they haven't been that good at interim releases in the past. Having said that, it's possible that they'll be more colors and memory bumps as the sales volume increases, as they did that for the iPod.

3. What about those who want different "sizes" or flip/slider/etc? Apple's view is that reducing the size of the screen or adding a keyboard will fragment the app space (and make the device less usable, not more). A larger "iPhone" is likely coming but it'll be able to run two types of apps - the current 480x320 apps and the larger size apps. Also, its one size is iconic and makes the iPhone immediately recognizable, though this becomes less important over time. (Apple is not interested in the non-smartphone space - i.e., phones that can't run additional apps and don't need a data plan. It's their view that over the next 5-10 years, billions of people will have or want a smartphone because the value of anytime/anywhere data will become obvious.)

Are there other reasons Apple should be spreading their product portfolio?


A note from the U.S.A. on "fashioable". Virtually every iPhone user I see has a cover over their device ranging from plain old black to a variety of multicolors and patterns. Also the materials vary providing for different tactile sensations.


Great post about Apple policies. I don't think they will develop a lot of products though, it is not their usual policy. Their policy is working for now and that's what really matters for them. Why to spread your portfolio if your product is working?

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Available for Consulting and Speakerships

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    Tomi Ahonen is a bestselling author whose twelve books on mobile have already been referenced in over 100 books by his peers. Rated the most influential expert in mobile by Forbes in December 2011, Tomi speaks regularly at conferences doing about 20 public speakerships annually. With over 250 public speaking engagements, Tomi been seen by a cumulative audience of over 100,000 people on all six inhabited continents. The former Nokia executive has run a consulting practise on digital convergence, interactive media, engagement marketing, high tech and next generation mobile. Tomi is currently based out of Helsinki but supports Fortune 500 sized companies across the globe. His reference client list includes Axiata, Bank of America, BBC, BNP Paribas, China Mobile, Emap, Ericsson, Google, Hewlett-Packard, HSBC, IBM, Intel, LG, MTS, Nokia, NTT DoCoMo, Ogilvy, Orange, RIM, Sanomamedia, Telenor, TeliaSonera, Three, Tigo, Vodafone, etc. To see his full bio and his books, visit Tomi Ahonen lectures at Oxford University's short courses on next generation mobile and digital convergence. Follow him on Twitter as @tomiahonen. Tomi also has a Facebook and Linked In page under his own name. He is available for consulting, speaking engagements and as expert witness, please write to tomi (at) tomiahonen (dot) com

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Tomi Ahonen Almanac 2009

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