I was discussing with Thom today about the failure or success of Apple’s coming “iPhone”. Readers must realize that this is not a case where Apple must get 80% of the market like they did with the iPod in order to be “successful”. Even a 10% in the next 2 years would be a big success in the cell market.
To achieve this though, Apple must offer features not easily found on other handhelds because music, pictures and movies won’t really cut it because other handhelds offer that too, even in a very ugly way (e.g. even the SonyEricsson Walkman phones are a joke compared to the usability and sound quality of an iPod).
One idea would be to offer mobile TV, just like MobiTV and SprintTV currently do. This could be an iTunes-controlled service where customers can pay something like $0.99 per month per TV channel they want to subscribe with. Then, via a well-optimized h.264 streaming feed the user would be able to view that channel on his iPhone via EDGE/3G or WiFi (I wish Apple would support Bluetooth PAN too). In essence, Apple could become the “next generation cable TV provider”.
Then again, according to a new survey people don’t care about media-on-the-go and they mostly want “smart” GPS functionality (e.g. “locate a pizza restaurant closed to where I currently stand”). So even if Apple starts providing lots of of cool media content, would that be enough to spark interest?
In my opinion, where Apple must innovate in terms of hardware is not on the shape and form of the iPhone but on the battery life. You see, if you count on streaming media and local video/music playback in order to make a buck, the user would think twice of doing so because draining the battery for something like this instead of talk time doesn’t worth it for most. So before all these cool features are served, Apple must truly innovate and create a new kind of battery technology. Li-ion with 5 hours of talk time or 10 hours of music or 3 hours of video simply won’t cut it. And then of course, most people don’t have unlimited EDGE so streaming can be a problem too when on the go (let alone that depending how far away you are from a cell tower EDGE’s speed can vary from 8 to 22 KB/sec — and bear in mind that 16KB/sec is barely enough to stream a medium quality video).
One important point of the success or not of an Apple phone would be carrier support. Carriers are the forces who mandate what gets accepted by the mainstream consumers or not. If they manage to get either Cingular or Verizon in US and Vodafone in Europe the iPhone dpt should be on its way to become profitable in the next few years.