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THOUGHT: What would an iPhone mean?
Posted by Alfredo Padilla - on Friday, 11.08.06 - 11:59:00 CET under 09 - Thoughts - Viewed 13616x
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Well, with a slow news day descending upon us I thought this would be a good chance to get some ideas I've been having out there. This was sparked by today's latest wild rumor about an Apple iPhone. Apple has been rumored to be developing some kind of mobile device for quite awhile now, and with the seeming inevitable movement of the market towards converged devices and the success of Sony's Walkman phone line it seems to be more a question of "when" rather than "if" Apple will release a phone.

Which brings us to the question I proposed in the title of this piece, what would an iPhone mean? Specifically, I wonder what kind of feature set it would carry and what it's position in the market would be. Would an iPhone simply be a an iPod with a cellular radio included? Or Would it be more like the ROKR or SLVR phones that are simply a regular phone with iTunes added? Which brings up the question of whether Apple would go the feature phone route (a la the aforementioned Walkman line) or instead try and turn the iPhone into a fully fledged smartphone.

It's that last question that I would like to explore, since frankly the other possibilities are not exciting at all to me. What would go into an Apple Smartphone? The first answer is iTunes and some kind of picture and video capability, basically the same feature set that you would currently find in an iPod. But what else could Apple add to it? Well, in order to make it into a fully featured smartphone, they would need an extensible OS of some kind. Without going into what that OS would be (we'll get to that later) lets talk about some basic features that would need to be included and how they would be deployed.

Some kind of PIM management software (calendar, tasks, contacts), a messaging client and web browser would be an absolute minimum. Of course you would expect that all of these features could be synced with your desktop, and this brings up an interesting question. I would certainly expect PIM data to be synced with a Mac's PIM programs, and perhaps even with Microsoft's Entourage (the "Outlook" for Mac in Office 2004), but what about the vast majority of people who use Windows computers?

One of Apple's smartest moves with the iPod was to make iTunes available for Windows, thus opening up a vast market that would have been unavailable to them if the iPod had just been a curiosity for Mac owners. They have worked to leverage this market and create a "halo" effect that leads users to the Mac eventually, but despite some recent growth in Mac sales, it is still an insignificant part of the market. I am sure that they will become more aggressive as time goes on and as they establish themselves as the undisputed leader in mobile media, but for now I expect that a smart iPhone would be able to sync with a Windows computer.

How this would be accomplished? Would you allow users to sync with Microsoft software such as Outlook, or would you go the same route as the iPod/iTunes and port Apple's Mail/Address Book/iCal programs over to Windows? I would imagine the latter (to continue introducing Windows users to the Mac experience), and I would also imagine that .Mac would be involved in some way for over the air synchronization.

We now have imagined an iPhone with a media browser (iTunes), PIM and connectivity (web and messaging), and it syncs with both Windows and Mac computers. That's pretty nice, but its still not a smartphone with a fully extensible OS. Apple may have decided to stop here thinking that they have a compelling product, but I'm not going to.

Apple has 2 options for a fully fledged extensible OS, they create their own or they use an existing one and modify it for their needs. Let's take the first option, that Apple is creating their own extensible OS from the ground up. The pros of this approach is that Apple, as it likes to do, has complete control over the software/hardware integration. The OS works the way they want it to, and they can create a "seamless" experience from OS X to the iPhone. The cons of this approach are that the OS would have an extremely limited amount of software available to it and you run the risk of screwing the whole thing up if you get it wrong. I believe that this is the most likely route, and it would create a new player in the smartphone OS field.

The second options does have some intriguing possibilities. Let's consider the contenders. First is Windows Mobile, we can throw that one out for obvious reasons. Second is Palm OS, there's a long history of Palm/OS X integration, but considering the abysmal state of development for the OS I don't think Apple will tie themselves to a failing contender. That brings us to the last major player, Symbian.

There are some very interesting possibilities in an Apple/Symbian partnership. First, there are complementary opportunities. Symbian controls an overwhelming majority of the global smartphone market, and an alliance with an Apple iPhone would probably cement their dominance. The one major area where Symbian does not do as well is in North America, where Apple's name recognition could quickly vault them past Palm and Windows Mobile. Finally, Symbian's extremely flexible framework would allow Apple to create the look and feel they want, while at the same time retaining access to the large collection of third party apps available.

Whether Apple creates their own OS, goes with Symbian, or some other solution I haven't considered, their entry into the world of smartphones will have major repercussions. Apple has positioned itself to dominate mobile entertainment with the iPod, and an entry into the smartphone market would be an extension of that strategy. The market is divided into two major components, consumer and enterprise. Unless Apple chooses to integrate their new iPhone with industry standards such as Outlook and Exchange, I don't see them making significant headway in the enterprise market.

In the consumer market however, Apple could be poised for domination. Take into account their vast iPod user base, and then assume that the iPhone shares ease of use and attractiveness and you have an instant hit. Their greatest challenge in the consumer area may not be from other smartphones, but rather from carriers who are also positioning themselves to deliver mobile content. I'm sure the Vodafone's and Cingular's of the world would not be happy with a ubiqitious and powerful platform that bypasses their control over mobile content. Similarly I'm sure that media companies already complaining about Apple's ability to set terms for the price of content will be unhappy about them dominating the consumer mobile space.

In the end I expect that Apple will come to some mutually beneficial agreement with mobile operators and content providers. What impact will this have on other smartphone players? I expect Windows Mobile will end up dominating the enterprise market with a much smaller share of the consumer market. Palm is already in a precipitous decline and I expect that to continue. The biggest loser may end up being Symbian, as their market it very consumer focused right now (the E-series phones notwithstanding). However it turns out it should be exciting.

And what about me? I just made the jump to a Mac, would I also make the move to an iPhone? At this point I think not because I demand a high level of integration with enterprise software, but who knows? Let's see what they come up with.

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