iPhone 2.0: An Unexpected Miss

Rob Enderle

Apple does a brilliant job of controlling the message that surrounds its products.

 

However, the syncing capability that was going to make the iPhone 2 capable of moving into business is apparently delayed until September, and the iPhone itself won't show up until July. And Apple just made fools of the folks that bought the first iPhone.

 

Apple virtually never does this, and you have to wonder what caused the delay. 3G technology isn't new, and the primary new feature we were all looking for -- the integration with ActiveSync -- was even later. It must have been a real problem for Apple because they were calling it "Active Stink" during their launch event, which I sat in on remotely.

 

I've been doing this for a while, and I know it is common for people having trouble with a Microsoft technology to call it names. But in my experience, the result is generally further delays because it really pisses off the folks you need to help you get the job done.

 

Is Apple Having Execution Problems?


 

Now, it was a little unclear what exactly will be available when the phone actually arrives because Mobile Me, which appears to be a copy of Microsoft Mesh (don't you kind of wonder if this is late because they basically ripped Microsoft off), won't show up until late July, which means that a lot of the capability for this already late phone won't show up until after the phone itself arrives.

 

A piecemeal product release like this is really unusual for Apple, which is kind of famous for releasing complete products. Mobile Me is to the iPhone what iTunes is to the iPod and, now that we know what it is, it's hard to believe the two products would be released separately. And it is particularly weird that the target release dates are close but not identical.

 

It suggests Apple dosen't want to couple the products and that Mobile Me may have a lot of work still to do, also suggesting the late July date may be an unreasonable target made to contain the risk that it may actually show up much later. By defocusing the market on Mobile Me, Apple can allow it to drift late without risking a massive loss of sales for the quarter.

 

Cell Phones Are Risky

 

Now PCs are one thing when it comes to waiting for new features, but I'm having trouble remembering another phone that dribbled out in parts rather than being complete at launch, as well as another time when Apple fully announced a product before it would be available. Last was the first iPhone, which Jobs launched early so he would have something to talk about -- we later found out it was junk at the time he announced it. It was only out of almost sheer luck and some amazing work by Apple engineers that the phone actually made it to market. Apparently, it was a very close thing.

 

But there is a massive push to have iPhone competitors in the market this cycle with credible products in the segment from LG, Samsung and HTC. In addition, we have the RIM Thunder and Bold coming along with an entire new line from Asus. Windows Mobile 6.1 is rolling to market as I write this. Microsoft Mesh is in early beta and it is supposed to eventually work with Apple, while Apple's Mobile Me offering is apparently Apple only. That may not be the best thing for the iPhone users who don't own Macs.

 

Can Apple Compete on Phones?

 

One of the things I wonder is if Apple really understood how fast the cell phone market moves. Typically, cell phone vendors refresh their lines at least once a year, often more quickly depending on the phone. Older designs quickly drop from nose-bleed levels to free. Recall that the Razor launched above $400 and in about two years was available on some plans for free. Apple is clearly floating a bit above the more rapid drop that regular cell phones are typically on, and it was late to 3G in the first place.

 

Apple kicked the market hard when it launched the first iPhone, but this second generation is coming late and incomplete. Plus part of the attraction of the iPhone is its exclusivity. At $200, it doesn't sound that exclusive and the old Macy's cold creme study (which indicated you could sell more of a product at a higher price if the buyer connected that price to some attribute like quality or exclusivity) suggests there may be a real risk here.

 

We'll see, but this one isn't the kind of launch you expect from Apple, and that makes you wonder what else is going on that isn't visible outside the company.

 

Something else to consider -- every other major vendor has a line of phones; only Apple has a single phone with two memory configurations. They have a line of iPods, and lines of PCs, so what happened to the line of iPhones?

 

One final thought. Apple was going to beat the RIM Thunder and Bold to market by several months with its own enterprise offering. Now it looks like the enterprise stuff won't show up until at best September, placing it after the RIM products are due out. That is one heck of an early Christmas present from Apple to RIM.



Add Comment      Leave a comment on this blog post
Jun 11, 2008 5:56 AM AL AL  says:
Thanks for the insightful information...I found this release to be OK, but not spectacular as far as features are concerned and have had some similar thoughts / questions about Apple and how it's keeping up.I'm curious where you've heard that that Exchange / ActiveSync implementation is delayed until September?I've been looking all over for information on this, and I've yet to find anything. I'd be quite disappointed if this were the case...been waiting for this for a while and my Windows Mobile phone is on it's last legs!Please advise...thanks again!AL Reply
Jun 12, 2008 3:41 AM Greg Greg  says:
Well I don't know if Apple made a fool of anyone. Because owning any smart phone is expensive in the long run. So if you need one for business or you have money to burn then get one. If you don't those kinds of funds buy a cheap laptop and your good to go. OK, no you will not look as cool but you can access the same information as the smart phone user. Also as far as I know AT&T is offering current iPhone users cheap or free upgrades to the 3G model. Reply

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