July 13th, 2007

iPhone Is Not Competing With Blackberry (Yet)

by Scott Karp

I presented at an internal conference for the interactive division of a major media company this week, and among all the conference attendees, I didn’t see a single iPhone. Not one. It was wall-to-wall Blackberries, including many Blackberry 8830s, which have only been out for a month, so it’s not that they aren’t buying the latest devices. And this wasn’t a group of old school execs — these were tech savvy digital media professionals. Yet nobody had run out to buy an iPhone.

It makes perfect sense, though. They are all on an enterprise Blackberry server, and the iPhone clearly didn’t provide enough incentive for them to go off the corporate grid.

But I don’t think this a failing on the part of Apple or iPhone. The first generation iPhone is not intended to compete with the Blackberry. It’s intended for early adopters, Apple fans, and independent creative and tech professionals, i.e. Apple’s core users. Apple has already show that this group is capable of buying A LOT of iPhones — and they are willing to pay A LOT. And as for the AT&T network, this group would have bought an iPhone even if it only worked by connecting with a piece of string.

By not focusing on business users, Apple was able to focus on developing iPhone’s core innovations, e.g. full touch screen, full web browser. But that doesn’t mean that Apple has no interest in the business market (or in the market of price sensitive consumers). I would guess that future generations of will be designed with more business appeal — the big challenge will be breaking the lock that Blackberry enterprise servers have on business users. The first step is probably to woo business Treo users.

A few notes on my favorite topic of iPhone’s network limitations. First, I realized on this trip what a deal breaker it is not being able to use the iPhone as a tethered modem. At the conference, the hotel’s WiFi was locked behind an overpriced pay wall, so I just used my Blackberry as a modem through Parallels — which was nice and zippy on Verizon’s EVDO network. At the Atlanta airport, I discovered that WiFi is only available through individual providers for $8 and up, so again I used my Blackberry.

The notion that iPhone can simply “hop” onto WiFi to escape the slow AT&T data network is tempered by the reality that doing so means taking out your credit card more often than not — a raw deal if you’re already paying for Internet access through your wireless carrier. (I’m writing this in Panera Bread rather than the Starbucks down the block because Panera has free WiFi.)

That concludes this week’s iPhone reality check.

Comments (4 Responses so far)

  1. weds an advanced GPS module, a digital magnetic compass, a microprocessor, and a “fully ruggedized display” to provide near-real time situational awareness information. Finger Alarm Clock Blackberry is NOT Dead [IMG] clipped from publishing2.com I presented at an internal conference for the interactive division of a major media company this week, and among all the conference attendees, I didn’t see a single iPhone. Not one. It was wall-to-wall Blackberries, including many Blackberry 8830s,

  2. Publishing 2.0

  3. Scott,

    Good to see you providing a balanced appraisal. There was so much iMania at the outset - I feel many people lost touch with reality.

    Apple is a latecomer in a crowded market. The carrier issues are prohibitive, and much of the business world (the group who buys and uses web data the most) will be EXTREMELY slow in moving over to a new technology; even one that’s better. Look how entrenched AOL was/is among the older demographic.

    I’m shopping for a new phone and will likely go w/ a blackberry Pearl - its smaller, on a faster network and great fit for my needs - email and text browsing. Plus I want a tactile keyboard.

  4. For every Mac success, there’s at least one flop. Mac Minis and Apple TV more recently.

    I predict an iPhone will come out soon without the hard disk for music. Why would I want to dock my phone in a $300 Bose Sound Dock only to have it ring every 5 minutes?

    Maybe the best use for a $600 mobile phone that doesn’t even have a detachable battery and costs another $600 each year to keep running:

    http://youtube.com/watch?v=ihpxJI4hRjQ

  5. Hardly a balanced appraisal, Scott, what with loaded phrases like “this group would have bought an iPhone even if it only worked by connecting with a piece of string.”

    Personally, I’m very happy with my iPhone and use it to access my email through our office Exchange server, no problem. The Safari browser works great, even through the AT&T network. Sure, it could be faster, but it’s not that slow. The big difference, of course, is the UI: I actually prefer to get my email on the iPhone, it’s that easy to use, and ease of use–the pleasure of use, actually–is what will sell these by the boatload.

    Regarding the iPhone’s success or failure and your “reality check”, only time will tell whether you know more about product design, development and marketing than Apple.

  6. It’s funny how high-bandwidth 3G connections suddenly got Really Important for smartphones - since almost everyone I see using BlackBerry phones are using them for just plain old text messages and email most of the time.

    Most of the high-bandwidth uses for smartphones don’t work on those “fast” phones, due to the tiny screens you find on most of them. Video? You’re kidding, right?

    The Pearl mentioned above by Doug has a 240 x 260 screen, a half-keyboard (with “real” keys smaller than the virtual ones on an iPhone), and doesn’t have high-speed wireless at all - no 3G or Wi-Fi…

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