iPhone, Apple's Empty Hype Machine

The hype is in full swing over Apple's iPhone, with media and investors alike buying into it as the messiah of gadgets. But does iPhone really compare to Blackberry? Nasdaq shook yesterday with competitors falling, while Apple's stock surged by 8.3% - proving investors are a fickle lot.

After Job's announcement of iPhone, Apple's stock took a $7.10 jump to $92.57. Meanwhile RIM stock took an $11.16 skid to $131. Even Motorola, Nokia and Palm took a small hit. But is Apple's first entry into the mobile phone market a true competitor to the Blackberry Pearl?

It's easy to see why people get excited about a story like Apple's Chief Exec Steve Jobs demonstrating iPhone. It's an intriguing story about a sexy femme fatale of a gadget (iPhone) threatening to assassinate an established master of its domain (Blackberry). Heck, if that were a movie trailer, starring Milla Jovovich toting dual Glock 18s wearing tight leather, I'd put it in on my must rent list when it came to DVD. But make no mistake, the story is fiction. In the real world Milla Jovovich probably doesn't know what to do with high-powered weapons and despite my best efforts doesn't even know I exist… but back to the iPhone.

Sure it's sexy with its wide position sensing touch-screen. Yes, it can do push email too, lending some real brains to its beauty. But it's an esoteric entertainment machine that costs between $499 and $599. Haven't we learned anything from the mobile phone market? People don't care how much senses-numbing technology you pack into a cell phone. The mainstream is looking for lowest common denominator value. The real financial backer of Smartphone technology is not the individual Cingular subscriber, but business. Not very many businesses are going to decide employees need a high priced entertainment machine to stay connected to the office, especially a first generation effort like iPhone. iPhone is essentially a Smartphone with a few messaging features. Let's not get carried away! Nobody is going to toss their Blackberry onto the street while switching to iPhone.

Soon the markets will settle down. We'll all catch our breath. By mid '07 we'll see that market penetration of iPhone pales in comparison to that of RIM's upcoming projects currently codenamed Indigo and Crimson.

6 comments
Posted by Wayde on January 11,2007 at 10:35 AM
Hey Apple boys.

I am not dissing Apple. I am positive that iPhone is a groundbreaking product and more linear follow up versions will sell like hotcakes. As for iPod comparisons; what sells more? iPod Video, Nano or Shuffle? Products further down the price spectrum tend to sell more.

I am however, cynical about the markets reaction as evidenced by Nasdaq. The market isn't moving as it is because Apple (as HertzDoesMatter believes) has built another monument to its artistic integrity - the market moves because it believes the mainstream consumer will be deeply affected.

Thanks for stopping by!
Wayde
Posted by Thomas on January 11,2007 at 3:00 AM
"Soon the markets will settle down. We'll all catch our breath. By mid '02 we'll see market penetration of iPod pales [sic] in comparison to that of Creative's upcoming projects currently codenamed Nomad and Zen."

"Soon the markets will settle down. We'll all catch our breath. By Christmas '06 we'll see market penetration of iPhone pales [sic again] in comparison to that of Microsoft's upcoming projects currently codenamed Zune."

Different products, same (i)Tune.
Posted by Nathan on January 11,2007 at 1:39 AM
I agree with "the mainstream is looking for lowest common denominator value". Sure.
But what does it have to do with the iPhone? Nothing.
"Common denominator"... What's iPhone's nearest competitor? What you compare it with? What would you have compared the iPod with, when it was first launched?
They're not selling "an expensive cellphone", but a luxury one, if you insist on seeing only a cellphone in there. Huge effort, by the way.
Nokia has cheap phones, and then they have the trendy, expensive ones. Same as Sony-Ericsson or anyone else. Compare the iPhone with those, compare the features (try it), then write an article.

I'm sure "Nobody is going to toss their Toyotas onto the street while switching to Ferrari". Unless you wanna get rid of your Ferrari in exchange for my Toyota :)

Cheers.
Posted by HertzDoesMatter on January 10,2007 at 6:39 PM
Congratulations on cashing in on the buzz by posting about the iPhone despite having little to say.

Your brash generalizations are as empty as a bowl full of apple-centric hype.

Who cares what the mainstream is looking for? Apple has never catered to the main stream. They've always featured high brow, visually stunning surprisingly expensive equipment. The mainstream success accomplished by the iPod is by bringing the masses to them, not compromising their own product goals.

Thus, as mentioned in some of the better hit-seeking commentary out there, this will just be the beginning. They will follow their plan and market to the slim segment they want. When everyone else is clamoring for it, they'll release it for everyone else. If not, they'll fail. But for none of the rediculous reasons you lured a web full of unfortunate readers here for.
Posted by Gadget Pro on January 10,2007 at 5:49 PM
They said similar things about the iPod several years back.  Gee what has happened since then?
Posted by Matthew on January 10,2007 at 4:05 PM
What everyone is neglecting to mention in their iPhone reactions are that this is much, much more then a phone. Sure, the iPhone is expensive when you compare it to other smart phones, it is not simply a smartphone. People are going to see this and demand more of their smart phones until the point where what we now know as the smart phone becomes a phone/mp3 player/internet device hybrid like the iPhone. In time, having a gadget like this will be standard. Technology is always evolving, and the iPhone is not just a new phone, its the next step in personal technology. If you remember, there was a time when $300 was too much for an mp3 player. What did apple do? They made the iPod, which is more then an mp3 player and it is now more or less standard issue. I suspect the iPhone will evolve the same way. By packing more into the phone, apple has raised what is acceptable as a price for a standard consumer phone.