June 30th, 2007

How Apple Will Use The iPhone To Take Over The Wireless Industry

by

Steve Jobs isn’t stupid. He knows that AT&T Wireless sucks. So why lock the revolutionary iPhone into a crappy network?

Because Jobs knows that everyone will buy an iPhone anyway, even if they hate the network. And that, as Umair points out, shifts all the power to Apple.

Apple will significantly improve the already revolutionary iPhone in subsequent generations, and lower the price, as they did with the iPod. With each new release, more and more people will look at Verizon and Sprint, who don’t carry the iPhone, and say, WTF!?

The real battle for control is between Verizon, which has hands down the best network, and Apple, which now has hands down the best handset. The tide will turn when die hard Verizon customers start switching in significant numbers to AT&T to get an iPhone. People like me, who stood firm on the network is more important principle, will crack under the pressure. There will come a tipping point, then, when the cost to Verizon of refusing Apple’s terms will be greater than losing customers to the iPhone.

What Apple really wants is to sell unlocked iPhones that can be used on any network — and I believe they will pull it off. Thus, Apple will do to the wireless carriers and other cell phone makers what they did to the music industry and makers of digital music players — they will completely take over.

From there, Apple will turn its attention to the last great battle — PCs. Once you own both an iPod and an iPhone, you’re going to look at your Windows PC and ask yourself — what am I thinking?

  • Tim

    I seriously doubt Jobs has any designs on taking over the mobile industry. Given its size that 1% percent figure is probably what Apple feels is the minimum necessary beachhead to establish its presence.

    Apple is all about experience. Yes, the iPhone is a nice, user-friendly phone, but more than that, it's one more compelling reason to buy a Mac.

    This is the brilliance of Jobs/Apple. They find ways to extend the Mac experience into new product categories with devices that are good standalone, but rock when paired with a Mac.

    The Mac is the core of Apple user-friendly marketing message, and every iPod & iPhone reflects and enhances that message.

    As more things go digital, they radically increase in complexity, and consumers are having increased difficulty dealing with it all -- hardware, software, service plans.

    That super-friendly, well-integrated product line is going to serve Apple well in the coming years, regardless of whether they hit some analysts' arbitrary market share numbers.

    -- Course, with PC iTunes and now Safari, what constitutes a "Mac" may soon completely change. ;)

  • Monday, July 2, 2007 - 3.0.017

    Stupid Is -- As Stupid Does - Part XVII

    Remember, in my world there are no stupid people, only human beings -- which means that we are each capable of saying and doing some very marvelous things in addition to some very stupid ones. The object is to increase the former at the expense of the latter.

    Since this is my web site, i guess that I have the power to make a little switch now and then -- the world is NOT all about our stupidities.

    Take Scott Karp's Publishing 2.0, where he speculates, "How Apple Will Use The iPhone To Take Over The Wireless Industry." 

    Jeremy Toeman responded with, "Why Apple will NOT Take Over the wireless industry."

    And Donna Bogatin piled on with, "iPhone Flash: Apple to 'TakeOver' Microsoft AND Google."

    Both Jeremy and Donna missed the real point, IMHO, where Scott wrote:

    "From there, Apple will turn its attention to the last great battle -- PCs. Once you own both an iPod and an iPhone, you're going to look at your Windows PC and ask yourself -- what am I thinking?"

    Now connect that with a couple of letters that I sent to Steve Jobs back in February of '06

    02/21/2006 - Will Apple Adopt Windows...

    02/25/2006 - How to Capture the DeskTop...

    And we might get a small glimpse of Mr. Jobs intentions. The PC DeskTop is up for grabs -- sooner or later, somebody will stake a claim -- why not Steve Jobs??

    The stupidity in this case is the the absence of any effort in that direction so far. The fear of Microsoft is wearing off -- slowly, but surely.

    And, naturally, I am here to help -- in any way I can. Hey, Scott, do you want to expand on your thoughts in this area??

    To be continued... naturally!!

    Doug Skoglund
    SandS Software, Inc.
    skoglund@pdmsb.com

    BTW: If you wish to discuss this matter you might check my off-line forums at http://nationalcomputerassocia...

  • What a great conversation. I’m with you on this 100%, Scott.

    I moved to at&t to get a Blackberry Pearl because Verizon didn’t have them. I would have moved to get an iPhone even faster. I was with Verizon since the late 90’s! While everyone says that the at&t network is crap, it has yet to impact me. Guess I’m not a power user – it’s good enough to meet my needs. I also bet I’m not that unique.

    It didn’t take me 10 minutes after hearing about the iPhone (and wrestling with MS Vista) to decide that my next machine will be a Mac AND I can’t wait until the day that I can lose my iPod in favor of the iPhone.

    That day will not be until next summer when the hype has died down, my current equipment is due for replacement, and Apple and at&t have worked some of the bumps out of the process.

  • I do not think Apple wants to sell unlocked iPhones unless they get a piece of the recurring revenue. The giant sucking sound coming out of AT T right now is monthly revenue for all service plans.

    Its true that Apple doesn't need AT T but they will gladly lock in users for long term revenue sharing.

  • Scott,

    Agree that it's *usually* a slow process for a company to increase its focus on usability, until it finally reaches the point of becoming a user-driven corporation (where not just the screen design and Web design, but the product strategy itself is driven by user needs).

    In my model of usability maturity stages, I call this later step stage 8, and Nokia is probably only at stage 5 right now. In my experience, it takes many years to progress through the upper stages of the model through natural evolution. (Whereas it's fairly quick to progress through the initial stages, since they are so primitive - but that's where most companies are right now, so that's why I am generally an optimist for huge growth in the usability field.)

    Usability maturity model: http://www.useit.com/alertbox/...

    However, my point in my previous posting is that we don't *have* to wait for natural evolution to take its time. If the CEO makes the decision to prioritize usability and truly drives that as one of the company's main goals, then faster progress is definitely possible.

    If *all* the other companies continue with business as usual, then yes, they are doomed. But they *could* change.

    And we don't have to rely on just Nokia - I am just using it as an example because I know that they have a bunch of good designers and usability specialists. There are several other companies where the CEO could decide to make usability job #1. (But of course, it can't just be a slogan; they have to spend the money and drive the company in the right direction. Considering the billions at stake, I think that'll happen in at least one company. Usability is cheap compared to 10% world-wide market share in mobile.)

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