OK, so my colleagues are prone to a little Apple bashing, but let’s not overlook the revolution Apple has begun in the telecommunications industry. The same knockers probably thought the iPod was a blunder of magnanimous proportions when it first appeared and the idea that Steve Jobs could convince the sedentary and archaic music industry to change its distribution habits of a lifetime seemed farcical, at best. Hmmmmm, didn’t he do just that? By designing a blindingly simple and reasonably sexy device that connected easily to a PC, which in turn could download music at a reasonable price instantly, Apple tackled a market it had no previous experience in and within three years became the second largest retailer of music in the USA and the largest seller of music playback devices in the world.
For those of you that have any doubts that Apple cannot replicate this success again in the telecoms market let me give you some good reasons why you’d be wrong. With Apple it’s all about the user experience. The iPhone is not primarily a phone it’s an iPod with phone capabilities. Making calls is a doddle on any device, big deal, it’s what else you can do with it that seems to matter now. Just like Netscape stealing the march on Microsoft years ago, Apple worked out that mobile computing was all about having a browser that allowed full screen viewing of a web page with the ability to zoom in to areas of interest using two fingers. In fact, you do everything on an iPhone using what God gave you. It’s a tactile and visual feast. Pressing a keypad is so old hat. Only people with Blackberries stil dig that mainly because they are stuck in corporate contracts and can’t swap easily to the new world. It looked like a gimmick a first but for many of those that got used to iPhone’s digital dexterity have gone on to buy Macbooks with the same interface.
In a remarkable first attempt at partnering with a telco, Apple convinced AT&T to share their revenues with them! Hell’s bells, that’s a first and even though that revenue model has since been superseded with the old tried tested handset subsidy, it still broke new ground. And what about getting the telco to change its voicemail system so that the iPhone could make better use of it? Another first?
I digress, the iPhone is a beautiful device with a good operating system (compare it with Microsoft Mobile if you have any doubts) and, best of all, every application that runs on it uses the same basic user interface. You don’t even have to think when you try a new application because it works just like all the others. The iPhone spawned a whole plethora of applications that people gave away free because it was cool to do so. With the launch of the ‘legitimate’ sales channel, the App Store, developers have happily provided Apple with 500 iPhone applications, 200 of which are given away free. The community is burgeoning and the reason is that Apple will only keep 30% of the revenue after doing all the work designing a beautiful device, setting up a proven sales channel and delivery mechanism, marketing it so effectively and collecting the money. Telco attempts to market content have been disastrous, a best, (with the notable exception of NTT DoCoMo) and many still insist on keeping u to 70% of the revenues themselves. No wonder the good developers are jumping ship. Now Apple is selling not only music but applications direct to the telcos’ own customer base better than they ever could and they are not getting any share of the revenues.
The lesson for device manufacturers is equally edifyng. Apple came out with one mobile smart phone, PDA, or whatever you’d like to call it. They upgraded to a faster version but the basics remained the same. Even people that had bought the original phone can update the operating system online instead of having to take to a service centre for upgrading. The software for iPhones works on all iPhones. There is very little to choose when a consumer buys an iPhone, basically the memory it contains. Compare that to that the thousand odd models and operating systems that other manufacturers thrust onto us every other day.
Simplicity is a wonderful marketing tool. I was the quintessential phone geek for years. My handsets had an average life of three months before I got bored or annoyed with them. My iPhone is going into its eighth month of service and the only move I will make is to the 3G version. Ask any iPhone user and you’ll likely hear the same story. Apple will sell 10 million of this single model phone this year. Probably more if it can produce them. I’m wondering what Mr Jobs will think up for the next generation, after all, he managed to reinvent the iPod for at least five generations and kept the sales going throughout. For the rest of the market he is providing the sort of shake up it needs. Don’t think they’re not worried? How many iPhone killers have you heard of lately?