iPhone - The most successful orphan...ever?
22/10/07 20:42 |
Apple
We love the
iPhone.
But is it in danger of becoming an orphan? Could one of the most revolutionary mobile computing devices in decades become stuck between a battle of profits and control?
We think it might, here's why...
But is it in danger of becoming an orphan? Could one of the most revolutionary mobile computing devices in decades become stuck between a battle of profits and control?
We think it might, here's why...
If there is
one thing mobile carries and Apple have in common it
is that they both are good at control and making
profits. What happens when two companies that excel
in these areas clash on terms for a product
release?
We don't know the full story, but what we do know paints a picture that isn't as pretty as you would expect for what is a enormous product for Apple.
Originally, we speculated that carriers would clamour to be the 'one' in each respective country that Apple was to sell iPhone. However, it appears that even stellar sales in the USA can't give Apple the edge they need to muscle in on the carriers.
But why? Presumably these companies WANT to sell the iPhone, surely they want in on the huge sales that will come from it. Apple know this. Apple know that where ever they make the device available, there will be hordes waiting to hand over their money.
The iPod business model is fantastic, but the carriers do NOT have the same problems the music and film industry has. Apple can muscle them around because there is simply no other way to compete on all the levels iPod/iTunes forces you too. Yes, iPhone is going to be big. But me, as a carrier, I already have 5 other phone manufactures that are happy to play ball the way I want. Why do I need Apple? Sure they are a cool brand and I'm going to get millions of new customers from this one device. Why do I need to bend and stretch for them and then have them take a big chunk of my 'safe' monthly subscription revenue? I already control this arena, the profits are mine.
Verizon weren't game enough, AT&T saw the light. But by all reports they have taken a big hit on contract profits to accommodate Apple's demands. It's paid off for them in a huge way with people switching to AT&T just to get iPhone, as expected. Although we didn't see it early on, this has always been a gamble for Apple. About 6 months before the iPhone was launched, we guess that it became obvious that deployment was going to be a difficult, uphill battle. By this time though, they had past the point of no return.
Keeping in mind the relatively slow uptake of the iPhone by new carriers (take France and now Canada as examples) and the limits placed on iPhone sales by the telcos that have already signed up, the number of iPhones Apple COULD sell if the device was carrier independent and the virtual guarantee of stellar sales on the iPod Touch - the future is getting pulled in every direction except the right one.
Apple created a baseline when they signed on with AT&T, this committed them to creating similar lock-in deals in the global market. It's impossible to sell an unlocked phone in other countries while locking contracts still exist in others, this is far from ideal. The danger in this situation is the iPhone could become increasingly isolated as a product compared to similar technology in like the iPod touch and our predicted Multi-Touch Mac which can be sold, unlimited by third parties.
We hope it isn't, but it just might be - the most successful orphan, ever.
Zillatron and Broadmier
We don't know the full story, but what we do know paints a picture that isn't as pretty as you would expect for what is a enormous product for Apple.
Originally, we speculated that carriers would clamour to be the 'one' in each respective country that Apple was to sell iPhone. However, it appears that even stellar sales in the USA can't give Apple the edge they need to muscle in on the carriers.
But why? Presumably these companies WANT to sell the iPhone, surely they want in on the huge sales that will come from it. Apple know this. Apple know that where ever they make the device available, there will be hordes waiting to hand over their money.
The iPod business model is fantastic, but the carriers do NOT have the same problems the music and film industry has. Apple can muscle them around because there is simply no other way to compete on all the levels iPod/iTunes forces you too. Yes, iPhone is going to be big. But me, as a carrier, I already have 5 other phone manufactures that are happy to play ball the way I want. Why do I need Apple? Sure they are a cool brand and I'm going to get millions of new customers from this one device. Why do I need to bend and stretch for them and then have them take a big chunk of my 'safe' monthly subscription revenue? I already control this arena, the profits are mine.
Verizon weren't game enough, AT&T saw the light. But by all reports they have taken a big hit on contract profits to accommodate Apple's demands. It's paid off for them in a huge way with people switching to AT&T just to get iPhone, as expected. Although we didn't see it early on, this has always been a gamble for Apple. About 6 months before the iPhone was launched, we guess that it became obvious that deployment was going to be a difficult, uphill battle. By this time though, they had past the point of no return.
Keeping in mind the relatively slow uptake of the iPhone by new carriers (take France and now Canada as examples) and the limits placed on iPhone sales by the telcos that have already signed up, the number of iPhones Apple COULD sell if the device was carrier independent and the virtual guarantee of stellar sales on the iPod Touch - the future is getting pulled in every direction except the right one.
Apple created a baseline when they signed on with AT&T, this committed them to creating similar lock-in deals in the global market. It's impossible to sell an unlocked phone in other countries while locking contracts still exist in others, this is far from ideal. The danger in this situation is the iPhone could become increasingly isolated as a product compared to similar technology in like the iPod touch and our predicted Multi-Touch Mac which can be sold, unlimited by third parties.
We hope it isn't, but it just might be - the most successful orphan, ever.
Zillatron and Broadmier
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