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The Back Page - Apple Death Knell #52: The iPhone Will Fail

by
January 15th, 2007

Oh my. With all the hoopla surrounding the iPhone since its unveiling last week at Macworld, there was one tiny little benefit to its announcement I hadn't considered: The resumption of the Apple Death Knell Counter! Yes, folks, once again we can start adding to that list of chumps who has proclaimed imminent Apple failure. Though, to be fair, Matthew Lynn of Bloomberg proclaimed not so much the death of Apple, but rather that the iPhone will be a complete failure, marking Apple Death Knell #52.

Why, you may ask? Why, for a hodgepodge of bad logic, might-bes, jabs at Mac and iPod fans, and other seriously silly arguments that Mr. Lynn will likely wish to forget he wrote. Fortunately, we shall enshrine him in the ADKC for posterity's sake.

"The iPhone is nothing more than a luxury bauble that will appeal to a few gadget freaks," wrote Mr. Lynn. "In terms of its impact on the industry, the iPhone is less relevant."

While Mr. Lynn gives the iPhone its due for combining the iPod, a phone, and e-mail all in one device, he offered three reasons why that won't matter in the grand scheme of things. Allow me to condense and paraphrase:

Reason 1.) Apple is a johnny-come-lately to the cell phone market, and the established big players in this industry will fight Apple for every sale. In addition, needing a carrier -- say Cingular in the U.S. -- means that Apple will have to play nice with others.

"Yet Apple has never been good at working with other companies," he rightly stated. "If it knew how to do that, it would be Microsoft Corp." he incorrectly concluded.

I don't know about you, but I personally have a hard time giving serious credence to someone who uses faulty premises to reach erroneous conclusions. Apple is not Microsoft because they have two completely and utterly different business models and philosophies (Microsoft licenses in an effort to be everywhere, while Apple believes in the "Whole Widget" concept of controlling the hardware and software).

The fact that Apple can be a faithless dog to its partners, licensees, and developers has nothing to do with why Apple is "not Microsoft."

In the meanwhile, the fact that Apple is a newcomer to this market is a bona fide challenge to Apple and the iPhone. It is not, however, in any way whatsoever, a definitive reason that can only lead to the iPhone's failure.

Apple will also have to play nice-nice with some other large(r) companies , and yes, this too will present a real challenge for a company used to writing its own rules. Once again, however, to say that iPhone will fail because of this challenge when the product isn't even released and Apple already has a signed carrier is a stretch of logic, to say the least.

Reason 2.) Network operators will be afraid to sign the iPhone lest they piss off Nokia, Motorola, and the other big players in the cell market.

Chicken Little much, Mr. Lynn?

This is a serious case of illogical nonsense. For instance, Cingular has already risked the ire of these would-be bullies by signing up the iPhone. Indeed, the company did so without even having seen a prototype!

The reality of this bad argument is that if the iPhone is a huge megahit, the big boys will fight back with big incentives and (hopefully) new and (also hopefully) cooler phones.

Will they threaten their customers in some way for carrying Apple? That's an exercise of cutting one's nose off to spite one's face, and I personally doubt it will happen. Apple's price point and direct-to-customer model -- at least in the U.S. -- means that Apple's footprint into this space is not going to be huge (anything over 3% would be pretty darned amazing). The market will adjust accordingly, and the world will go on.

Reason 3.) the iPhone is a "defensive" product designed to protect the iPod from a mad rush of crappy phones that do a crappy job of playing music, and gosh darnit, such defensive efforts "seldom" work.

That's another non-argument that uses its own premise to justify the conclusion. Nonsense!

He added, "Consumers are interested in new things, not reheated versions of old things."

Perhaps Mr. Lynn hasn't actually seen the iPhone, but I personally think it's almost as revolutionary as Mr. Jobs said it was on stage at the keynote. This is subjective, but anyone trying to write off the iPhone as "reheated" anything should check the dosage on his happy pills.

At least in my never-humble-opinion.

He also muttered something about the price point of the iPod being too high for consumers, while business folks won't be able to get their companies to pay for it.

Well, I think we'll see some surprises there. If the iPhone leads to greater productivity -- something I think will be the case due to the fact that working e-mail and calendars doesn't suck on an iPhone -- Apple will have some entres nous into the corporate world. That remains to be seen, but I don't see the price point of the iPhone being a real hurdle to hitting 1% market share in its first year.

Make sure you read the full column from Mr. Lynn for yourself, but in the meanwhile, it will live on in the ADKC.

began using Apple computers in 1983 in a high school BASIC programming class. He started using Macs in 1990 when the Kinko's guy taught him how to use Aldus PageMaker, finally buying a Power Computing Power 100 in 1995. Today, Bryan is the Editor of The Mac Observer, and has contributed to the print versions of MacAddict and MacFormat (UK).

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Observer Comments

Show: Subjects Only | Full Comments
View Name:Guest
Subject: Is it really a phone?
View Name:Guest
Subject: hear hear
Close Name:horvatic Posts: 99 Joined: 27 Jun 2003
Subject: Apple was late to the MP3 party and now there #1

Mr. Lynn apparently forgot that Apple was late to the MP3 party and now there iPod and iTunes Stores are number 1. Being late to the party doesn't mean anything and there was plenty of MP3 players when Apple released the iPod and just about everyone was writing that Apple would fail here too. Well Apple has analyized the weaknesses in the market and then now they have developed the iPhone. So to declare a product a failure before it has even been released in this case is nonsense. Now if you were talking about the Zune everyone knew that would be the case.

View Name:Guest
Subject: Buttons
Close Name:luxxter Posts: 3 Joined: 18 Nov 2003
Subject:

I'd like to see what Mr Lynn had to say about the iPod when it was first unveiled.

View Name:Guest
Subject: Killer App for Apple's Phone
Close Name:Bosco Posts: 966 Joined: 03 Jun 2002
Subject: What a total poopie head!

Mr. Lynn is a poopie head. For now anyway. But if he turns out to be right about anything, he'll just be a footnote on the death knell counter. Sucks to be him.

View Name:Guest
Subject: iPhone
Close Name:coaten Posts: 2944 Joined: 10 Oct 2001
Subject:

Thankyou, Richard. When you opened your comment with "From an email..." my heart sank, but then you showed how nicely a rebuttal can be done over the wire. Good on you. Too many Macsters go the other way, using vitriole, and it's not good for the rest of us.

I know, I've done it.

Close Name:Bryan -   TMO Staff Posts: 7325 Joined: 11 Jun 2001
Subject:

Aye, that's a great note, Richard. Thanks for sharing it here.

Close Name:coaten Posts: 2944 Joined: 10 Oct 2001
Subject:

I agree with one of his comments: "How about a phone with fewer gadgets but better at making calls".

Agreed. How nice would it be to have Apple's iPhone interface for just making calls? With few features it would be cheaper to produce and surely it would have a market? I hear this "I just want a phone that makes calls" lament every week from a new source.

Close Name:Bosco Posts: 966 Joined: 03 Jun 2002
Subject: If you just want to make calls...

Get a "Jitterbug". Looks like a super easy way for the non-technical to just make calls. And probably be happier than the rest of us that have the patience to screw with these gadgets, future iPhone included.

Close Name:Dirt Road Posts: 1227 Joined: 24 Oct 2002
Subject: Not sure

At this point, I'm not sure the iPhone — at least the first generation — will succeed. You can get a Blackberry, or similar competitors, for $199 with a 2-year contract; the iPhone looks like a better gadget, but 2-1/2 to 3 times better?

No third-party development, huge price tag (upfront and ongoing), unproven durability (although I don't expect that to be a problem), and the good old value proposition, are going to be factors after the initial run. On the other hand, there could be features that we haven't seen yet that could change the equation.

Close Name:mahuti -   TMO Staff Posts: 363 Joined: 09 Jan 2003
Subject: Key

You know, for me, the ichat scrolling is a big sell. I like the idea of using txting with the ability to see what I wrote.

The thing I'm most worried about with the iphone is nobuttons slick screen. I had a phone once without buttons and it really sucked. Here's why;

1. Constantly greasy face made it hard to read. It's not like my hands or ears are covered in oil, but they make a slick faced phone pretty greasy in not time.

2. No tactile feedback. Without REAL buttons, It makes it very hard to do things without looking at the phone. I try not to be an obnoxious cell phone user, but sometimes you just gotta take a call in the car

3. More difficult for text entry. Without buttons it makes it tough to txt very fast because you can't slide your fingers across to the next button. With buttons you have to press them a bit before they activate, with touch sensitive screen, it's easier to "press" a button, therefore you have to remove your fingers after each press, rather than just sliding them around.

Apparently this tech is pretty sophisticated, and they've done some new stuff with the touch screen, but I guess the proof is in the pudding. I'm definitely anxiously awaiting the iphone's release, but still, you'll have to color me skeptical.

View Name:Guest
Subject: The major cut to the jugular is . . .
Close Name:Bosco Posts: 966 Joined: 03 Jun 2002
Subject: More on Cingular

My problem with Cingular is personal. My 80-some year old grandmother is a Cingular subscriber. Why? Because it's the old AT&T and she didn't figure out 20 years ago that you trust AT&T as much as you trust anyone other company, i.e. as far as you can throw them and only as much as you need to. So they called her one day and offered her a free RAZR with supposedly no commitment and no additional fees. Then the bill came. Then it took her two days and repeated phone calls to "the manager" (read: "the guy in the next cubicle covering the other guy's ass that day") to get it resolved. And she still had to pay to ship it back. So guys, that's why I hate Cingular . But I won't let my grandmother become a Sprint customer, because I'm sure I'd hate them just as much in a couple months .

Close Name:Jonkun227 Posts: 238 Joined: 02 Mar 2004
Subject:

The biggest disappointment in all of this, for me, is that the service issues are not any better. I had been holding out hope that Apple would rescue me and countless others from the demons of the cell phone industry. No such luck.

I have been with T-Mobile since it was Voicestream. (I praised T-Mobile for eliminating Jamie Lee Curtis as a spokesperson.) I had fantastic customer service for many years.

Then we signed my wife up. Over the phone because the website was down for service and I hate cell phone stores. It took 6 months of hour-long weekly calls to customer service (who has time for that?!?!) to get what we were promised from day one. And now, because we've protested so much, my value to T-Mobile has dropped and I can no longer get even remotely acceptable service, much less the exceptional service we used to have.

I've been using a Nokia 6010 (basic among basic phones) for 2.5 years, hoping for Apple to release something worth buying. Given that we're stuck (costs as much to get out of our contract as to continue service), and that the iPhone likely won't be available to me for at least a couple years, I will settle on a Blackberry. And an iPod. And a camera. And 3 chargers. And all sorts of software. And a host of usability issues.

Disappointing to say the least.


- Jon

View Name:Guest
Subject: What is entrez-nouz?
View Name:Guest
Subject:
Close Name:mahuti -   TMO Staff Posts: 363 Joined: 09 Jan 2003
Subject: entrez-nouz

entres nous might be neologism for "new entries" I'm guessing.

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