The IP Development Network Blog

"Nokia N95. It's what computers have become", so say Nokia in their promos.

They could however just as easily used "It's what music players have become" or "It's what cameras have become". Heck, they could even have said "It's what mobiles have become". After all, that's still what it is. A phone.

The iPhone is a phone too. But it's a launch product that needs some razzmatazz to break the mould. It is a statement of intent not for one, but for two new companies hoping to establish themselves in the Mobile Phone world. New AT&T need a visionary statement as much as Apple do, in what for both companies is an attempt to reshape the status quo.

As this is the US market, the headline is the price for the iPhone itself ($499 or $599). If this were Europe, the price would quickly be subsidised down by the networks in exchange for a 12 or 18 month airtime contract. For example, the Nokia N95 retails online in the UK for around £400 (nearly $800), but if you buy airtime (from O2 for example) by paying £25 a month for 18 months, you can get the N95 for half price. Pay £50 a month for that period and you can have the phone, gratis.

I would not be at all surprised to see AT&T go down that route in their launch too. The currently published headline price is teasingly high, painting the image of a quality piece of consumer friendly electronics. If you could get the iPhone (with a contract that you need anyway) for half price, it feels like a steal, right?

After a period of time (after the Christmas sales perhaps), expect to see the core offering reduced further in price and a higher spec device appearing at the old, higher price point. That's how computers have evolved and as Nokia reminds us [the phone] "is what computers have become". Or should that be the other way around?

Apple may be portraying the iPhone as a new market entry, which it is into telephony, but are no doubt aware that it is also a replacement for the iPod. The data pricing plans are still a hindrance, but the Sony Walkman series of phones are clearly attacking the iPod's core market and have been for some time. I highlighted this threat in a research piece last year. Apple could not afford not to have an alternative if / when these barriers are removed. Who controls these barriers...? AT&T for one.

What price (in AT&T's bundle) unlimited free data "calls" to iTunes...?

The iPhone will probably not do well with Crackberry users, who will simply not have enough time to spare in between emails to switch over. Where the iPhone could do very well is in the anti-blackberry market, where consumers want mobile data to mean "fun" and not "work".

I think the iPhone will do particularly well in the US where the above phenomenon is at its most acute, and also because for once (in mobile at least), the iPhone is something that was invented here. Americans like their own brands best.

So how will it do in Europe if / when it arrives? Debatable perhaps, not least because of the issues of embedding technology with so many different network partners. The competition is probably already more intense, what with the Prada and the HTC already being available, there is time for others to be ready when Apple comes to market. There is certainly cause for some scepticism that the iPhone's initial targets will be missed.

It may also depend on whether Apple can find network operators as desperate to make a statement as the new AT&T is, or whether the iPhone will just end up on page 33 of their catalogues. H3G perhaps? But their coverage sucks, so why would you?

Which brings me back to earth with a bump. This is still a phone. It will still be used predominantly for 30 second calls and it will get dropped, flushed down the loo and chewed by the dog. Insurance? Add £10 a month onto your plan.

Hearing all the buzz around the iPhone this week has reminded me that once a market reaches maturity, the brand and the package are all that count. But a phone is a commodity and commodities are about brands. It no longer matters whether the product A is better than product B because in fact, it is often impossible to tell which is better.

So many features and so little time to compare and prioritise... As long as they both work, the brand wins. Apple are good at branding, but then so too were Virgin.

In the end, what matters is that you trust the product and you buy it because it looks, feels, sounds and smells good. It reinforces your view of yourself and your position in the social hierarchy. Think washing detergent.

Touch screen interfaces? The little blue flecks that confirm that what you are getting is not simply cheap white powder...

Labels: iPhone, N95

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# posted by Jeremy Penston @ 6/06/2007 06:20:00 PM 0 Comments

Wednesday, 6 June 2007

Little blue flecks