Apple iPhone: Market Sustainability?
The views expressed below are solely the views of the posters and do not reflect the views of Boy Genius Report, Inc.
Jibi: From my treasure chest of retained memory, I cannot honestly recall a single ’smartphone’ device that has managed to sustain a strong heartbeat without the support of Corporate America, or it’s step-siblings around the globe, pushing it’s success. There has been so much hype and so many rumors leading up to the Apple iPhone’s launch in a couple weeks that it’d be silly not to think that initial sales figures should propel somewhere into the stratosphere, but is the initial, short-term sales figure really what Apple wants, or even what AT&T is expecting to receive in return for selling it’s soul? Check out the rest of my thoughts after the jump, and some commentary from BG below it!
The main reason BlackBerry and Windows Mobile devices have been so successful in recent years is the adoption rates within the business sector. Sure, as it’s been reported time and again over the last year or two, there’s a lot of untapped resources within this future industry that promises a potential market share that could rival Big Pharma, but I cannot honestly see how the release of this particular over-hyped device will permeate the exterior walls of the Fortune 1000 companies or large government agencies. In order to ensure some sort market sustainability, these agencies and companies are where adoption is key for Apple and AT&T; without their acceptance and blessing of the iPhone, it will end up being nothing more than a consumer novelty item that will replace your personal cell phone and your iPod – it will NOT replace your BlackBerry.
Does Corporate America feel the heat of the iPhone craze? Sure. It’d be stupid and narrow-sighted to think otherwise. Within my company, concerns have been mentioned time and again, and we feel that it’s inevitable that people will be seen with these devices right and left. Does that mean they are approved, accepted, and supported? Absolutely not. The general consensus is that these devices will be obtained through personal channels and not through corporate-sponsored and supported purchases, which is already a huge red flag concerning smartphones within most companies. Companies around the world are gearing up for the device launch by drafting policies barring the use of the iPhone or providing reasons why it’s not to be added to corporate-support device lists.
There are simple reasons why this first generation iPhone will not receive adoption within Corporate America. For one, there’s no support provided for existing messaging platforms, whether it be Microsoft Exchange, IBM Lotus Domino, or Novel GroupWise, or messaging interfaces, such as BlackBerry or GoodLink or Direct Push. Does Apple think we’ll move our corporate messaging system to Yahoo to accommodate Push-IMAP? Yeah, I see that suggestion being well-received by the Information Security officers.
The Apple iPhone has no means of tunneling or secure communications back to an internal network, either. Sure, this may be a possibility with a future VPN client from the likes of Cisco, by way of their mutual agreements on the iPhone nomenclature, but at the time of the device launch, there will be no such VPN clients and thus no intranet connectivity. Oh, and let’s not forget the lack of corporate-ready messaging clients, either. In this day and age of security-conscious IT departments, large companies no longer offer IMAP or POP3 support to their internal messaging platform, so rule out the built-in interval-based retrieval of e-mail over these traditional protocols.
Lastly, where’s the friggin’ keyboard?! I keep hearing about this virtual touch-screen keyboard that’s light-years beyond current technology. Sure, the vector-based browser rendering is awe-inspiring to look at, but the lack of a real keyboard will make browsing almost painful. And let’s not even get into messaging technologies, such as consumer-based e-mail functionality and text messaging. I suppose this feature will be flagged as ‘wait and see’ before final judgement will be passed. I can only think of similar past innovations in virtualized keyboarding and the success rate of these products (and the fact that I cannot recall a single one succeeding is obviously having a biased impact on my assumptions of the iPhone’s "keyboard").
The Apple iPhone will have early success; Apple and AT&T have all but ensured this fact. It’s rare that Apple has failed with any product launch since the re-crowning of Steve Jobs and the first generation iMac. However, Apple has also been known to release rather faulty first generation products that tend to get better in the second and third and beyond generations – they never get it ‘right’ in the first go-round. Until the next generation iPhone is released, or until third-party application development and porting is opened up to allow integration within the messaging infrastructures of Corporate America, not web-based applications, do not expect to see long-term growth and sales figures to be anything to marvel about (although failed expectations may be mentioned in conversation).
Boy Genius: Jibi’s made a great point — Corporate America won’t embrace the iPhone. Nor should they. After all, this isn’t targeted at the business market. This is a consumer product that enables the user to stay in touch through multimedia, occasional emailing, web browsing, and phone calls. When Apple set forth with their master plan to "revolutionize the mobile industry," they surely thought to themselves, "what market are we aiming for here?" I don’t think that anyone in their right mind expects Fortune 500 companies (or even small businesses for that matter) to ditch their BES servers, and Exchange servers to switch 50,000 users to the iPhone. This is a consumer product, marketed towards consumers. I also think that when the hype has settled down, you will see a lot of enterprise users actually carrying this device. Yes, they will have two phones (as if they didn’t already). They will still have a BlackBerry on their hip. RIM has "freed" a lot of suits from boredom and I think the iPhone will too — just in a different way. When you look at the grand master plan, it seems as if an Apple server nestled deep inside the wireless carriers network is required to enable all of the iPhone’s features. Much like the T-Mobile Sidekick, or the BlackBerry. This is genius on two levels. One, it deters a number of people from using the handset outside of the intended network. Sure, people like us will either find a way to enable the features if possible, but if not we might be content with a touchscreen video iPod that can use WiFi to browse the web and check emails. Yet, I don’t really see consumers shelling out $500-$600 for a product, and not be a little nervous about losing the internet and cellular functions if they’ve strayed from the intended carrier’s network. Second point, is that the next Apple iPhone product we see, might actually be geared towards the corporate market. Apple will have a nice little head start by integrating these servers already. And lord help us if that happens. Anyone care to guess what the iPhone will sell the first week? My bet is around 250,000 handsets the first week. It’s gonna’ be a fun summer! What do you guys think?
The iPhone is going to be missing the 3G, but as mike mentioned, that will show up on an upcoming unit. It has been mentioned in several reporting that apple and AT&T are already looking towards new “DEVICES” that will change the game in wireless. Devices being plural. So you know they got more surprizes in the pipeline. Including a 3G device and more than likely a business oriented device. The iPhone gets the name and product out on the market. Once apple does that, they open the door to a wider range of products in the wireless industry.
Oh and don’t forget the 5 year exclusive contract that AT&T and Apple have with one another.
With most analysts predicting 3 million units by years end, a safe bet would be about 150,000 first week sales.
Sorry to say I won’t be in that number. Without an IM client, or MMS, or a replaceable battery, the device is nothing more than a glorified iPod.
What Apple forgets all too often is that its hardware, while innovative, doesn’t sell. What sells is the software, the content, and the services. Mac’s would look very pretty in museums, but if not for companies like MicroSoft, Adobe, and countless others, Apple is lucky that those companies chose to write great software for those pretty Mac’s.
Apple, in it’s infinite wisdom has choosen to ignore the eco-system that has helped it survive. By relegating 3-rd party apps to Web2.0 AJAX, they’ve cut off the hand that feeds them.
They’ve also forgotten that the device is called an iPhone, with the emphasis on phone. How could they overlook something as fundamental as MMS? Surely they must of been smoking some bad weed, as thats the only excuse for not providing such a basic phone function. I can overlook 3G, since 3G is still hit-or-miss for most of the country. But if you are going to put such a rich data hungry browser on a device, it should be more responsive than what EDGE can provide (let’s hope they are at least smart enough to do image compression to improve the repsponsiveness).
Price will always be a point of interest. Apple, throughout it’s history has stood for fairly high quality hardware, at an equally high price (anyone remember $10,000 LISA’s and $2,499 Mac128k’s). Their mode of operation has been to keep the prices high while improving the hardware with each iteration of the model. So, if that holds true, I’d expect to see 3rd and 4th generation devices that will still cost $600, but might be worth having.
Well, enough arm-chair quaterbacking… let’s see what happens by July 6th (one week past launch).
ipod has redefined sustainability. this will be no different. the device does not need corporate acceptance to be mass market. blackberry market share is still less than 12% today, so i’m not sure what your definition of sustainability is exactly. iphone can get that share in
I think this issue has been knocked around enough. BG we need a new iPhone post!
RIM? A joke. The browser on that thing is a farce. Try loading the NYTs on that.
Plus, all internet goes through the BES server installed at the corporate office.
Big company admins are suddenly going to lock out IMAP/POP? To stop the iPhone, so they don’t have to “support” it? A joke. As if they could do such a thing, or could justify spending the hours to do it.
Admin: I hates me the iPhone. Screw those mactards! I blocks them.
CEO: Admin, check out my new iPhone. Can you help me set it up?
Admin:
That’s how its gonna be, fellas. Get used to it.
At the top of a LOT of security best practices for messaging environments (with a specific emphasis on Exchange, as that’s what I deal with on a daily basis), instructions/suggestions for disabling POP3 and IMAP access can usually be found. This does not mean that POPS and IMAPS access won’t be suggested as an alternative means of enabling these protocols, as it’s a much better solution to have an encrypted channel when accessing otherwise highly insecure protocols, but so far we’ve heard nothing of this support from Apple (and somehow I doubt their inclusion).
Big company administrators, atleast the ones I have spoken to quite candidly on the subject in recent weeks, do not have the IMAP or POP protocols exposed in their DMZ (some do have these enabled internally), as they are well-knwon high-level security risks. Thus, there’s no disabling of these protocols involved to prevent the iPhone but rather the iPhone’s limited inclusion of these protocols, aimed at commercial IMAP services such as Yahoo and some ISPs and small company mail environments, that will prevent the iPhone from touching it’s fingers in the sandbox of large corporations who are conscious of ISO and various other common-sense-security best practices.
Do you really think that any random large company, who has spent a large sum of ‘x’ amount of dollars on defining and building an information security infrastructure over the last 3-7 years since it’s become such a popular topic in the industry, will really open up natively insecure protocols and expose them over the internet just to make an allowance for the iPhone to work with its built-in mail client? I highly doubt it.
As for your comment about all internet traffic going through the BES; once again, for compliancy-conscious companies, it’s not a bad idea to have an audit trail for any sort of data communications. But alas, if it’s not locked down via policy, anyone can change their default browser to use BIS and avoid the corporate MDS …oh, and the browser on RIM devices is getting a slight upgrade within the next OS (4.3.0) and a rumored complete overhaul (full HTML) with the OS release after that (which should be 5.0.0), but we’re saving that for another day and another post.
@Jibi you are an evil man, mentioning that and then leaving it for another post another day.
I agree…250k first week, and one million first month.
I think AT&T will bundle an all-inclusive unlimited data plan which will undercut all Verizon and Sprint…T-Mobile is dying already. The ‘bundle’ is common knowledge by now, yes. I think the ‘bundled plan problem’ everyone is fretting about is not a problem at all, when you consider that the price will beat the market competition… that’s the unexpected part to the ‘bundle’.
Yeah, I know, without 3g and MMS how great is unlimited data…not so amazing yet…
But as others have stated, either the iPhone 1.0 will have HSDPA hardware included, just not turned on (i.e. Treo 750, 8525 too right?) or they will include HSDPA in iPhone 2.0….available before the Christmas buying season in 16GB and possibly 32GB flash sizes as well…just enough to entice new buyers…and just enough to entice the early adopters of iphone 1.0 to upgrade…gotta stay current.
Not that Apple has been known to stretch out upgrade cycles to nauseating lengths, but always smartly and strategically moved…this first year will be different though, with Apple pulling out all the firmware and revision stops to gain market share…
One has to ask, what would happen to the AT&T network with an massive influx of unlimited data users on a still fledging HSDPA network anyway?
Come spring…everyone will have gotten used to the new interface, it will be accepted as the mouse, and the new iPhone 3.0 will work so smooth and seamless with Exchange, HSDPA is rolling and full-strength, and corporate buyers start second guessing their RIM data plans to see how much they are paying against Apple/AT&T one size fits all plan…
Ah, all guess work…
Jobs, just don’t kill the iPod, cuz I want a 200GB version now (al least 120GB…and no I don’t care about waiting for flash either, and I’m not going for iPhone 1.0…there will still be millions of iPod hungry buyers out there waiting for our touchscreen, fullscreen HDD based large capacity torrented content holders
Ok you wanna know why 80% of the market has “dumb phones” is because they gennerally can”t afford “smart phones” this is no doubt going to be ATT’s PS3′ish phone i apple wants to flodd the market they need to knock $2-300 off the price tag. you see the fanatics march in the first week> but asson as I told my coworker about the price an th @ year agreement he basiclhy said “screw this”. an whaen people doo al the math thy will follow suit it will be a difficult tim selling in the peonix market for exactly that reson you could see som sales in tempe or scotsdale. but thats it.
The RIM Browser is never going to be as good as Safari on the iPhone. Period. End of Story.
So people are supposed to accept that from their pointy-headed sysadmins? Not gonna happen.
I love hearing from Admins about how security conscious they are but yet they run Exchange and support Windows XP.
I’ve worked for very large companies, some at the core of the internet backbone infrastructure, and they have ALL had IMAP and POP access to email.
This whole issue is a red herring in any case. Admins will do what their boss tells them to do, and their boss is going to be buying an iPhone eventually.
Why? Because it plays video and is an iPod and has a FULL browser (minus Flash) and also does email. Not to mention a much better voicemail experience which can’t be discounted in the corporate world. I hate checking VM because you have to wade through message after message. RAV (Random Access Voicemail) means I can totally ignore the messages I don’t want to listen to, especially if I suspect they are from Admin in the basement telling me why he doesn’t want to support my new toy.
R2
Your statement about the value-added Random Access Voicemail (Visual Voice Mail) is very substantive. This feature may be very attractive to corporate execs.
From my experience with cell phones and iPods (currently using my third iPod), I have found that these devices are not built to last. I have yet to own a cell phone that has outlasted it’s contract, or an iPod that has outlasted a year. If the iPhone continues with these trends, it will be interesting to see the consumers tolerance, given that replacing an iPhone will run quite few $$’s more than replacing a traditional cell phone (big IF here, that is IF the iPhone continues with this trend).
All that being said, I have had an iPod replaced just within the warranty period, and have actually purchased three…and when the current iPod dies I will have another!!!
- “I still can’t believe this! All this hype for something so ridiculous! Who cares about an MP3 player?”
- “All that hype for an MP3 player? Break-thru digital device? The Reality Distiortion Field is starting to warp Steve’s mind if he thinks for one second that this thing is gonna take off.”
- “Better bring that price down or you wont sell any of these babies”
Comments from clueless readers after the 2001 iPod introduction.
I have had phones outlast my contract many times. I have had my iPod for close to two years without an issue. It all boils down to how you care for your equipment. Your mileage may vary. If the iphone breaks constantly then you will see the market respond accordingly. It does not make sense for Apple to build a product that they expect to break. No one makes a device that is expected to last forever.
There has been so much hype on this device that we need to let 6/29 come and go and see how the market accepts the device. Time will tell as it always has in the past.
Visual VoiceMail is not unique. It’s been around for years. AND theres nothing to stop at&t from putting it on any phone that can play audio.
**off topic** Another cool technology thats being touted lately is voicemail-to-text. Companies like SpinVOX have announced products (quite slick I might add) that will take your voicemail, transcribe it to text, highlight phone numbers(and make them dialable). For people that are in meetings, and can’t listen to their voicemail, this will be a cool feature.
Visual Voicemail has been around a long time? I’ve yet to see it in any phone I have. Shoot, my T-Mobile Blackberry doesn’t even let me stop the playing of a voicemail message once it’s started. The Motorola phone I had before was worse! I’ve yet to see anyone offer me a voice mail that’s close to what Apple is offering. So let’s see some references and not just some claim cut from whole cloth.
As for voice to text, that would be great. If it worked. But I can only imagine how wrong it will get some things when the person leaving the message is on a bad connection.
How will it know the difference between “There’s a bad moon on the rise,” and “There’s a bathroom on the right?”
The sidekick (go NC State) took off like the ipod took off not because they were great devices but because America is a bunch of followers and we do what we see stars do. The sidekick was an affordable device when you added up the data plan for only $30…
The iPhone biggest problem like previously stated is going to be price. Why in 2007 would I buy a phone that doesn’t have 3g. Apple is known not to release good product in their first release. There is a lot to love about the iPhone but there are just as many things not to love.
I was thinking about getting one as my personal phone since I can’t have a camera phone on my job nor do they support imap/pop3 accounts. What makes the decision harder is that through my company we can get the HTC Tytn without a camera and then I can update to WM6… Who needs 2 phones then besides the fact that the blackberry 88** series is just sexy…
As for first week sales I think they will do about 150,000 b/c stars and others who have $5-600 to blow will get it to test it out… or people will buy it for the 30 day trial and test it out…
Truth be told I don’t think $5-600 is a lot for all the included features just needs 3g, slide out keyboard, and of yeah be called the HTC VOX… Now if that was out I wouldn’t even consider the iPhone!
“The RIM Browser is never going to be as good as Safari on the iPhone. Period. End of Story.”
Wow, your insight into RIM’s OS plan is astonishing. I mean, you must know the whole product roadmap to make a statement like this, yeah? Too bad you’re dead wrong.
I’m confident your Apple fan boy dreams will be swiftly crushed in due time. Hold on to them while you can though, it’s endearing.
Can anyone explain why the iPhone will not work/sync with MS Outlook/Exchange. I know their may be a difference in those two, but in the last “Prep for iPhone” e-mail they sent it seemed to say that it could pull e-mail from outlook (corporate?) Maybe I am missing understanding a technical issue here but I just want to be able to read my work e-mail on the iPhone, thats it…
Also the demo in the Keynote with the 3rd party app that gave access to a corporate contact database (through safari) seemed to me as a pretty strong statement that they were going to try and cater the iPhone to the corporate world
Why won’t it sync with Outlook? You’re not serious, right? Not even Microsoft can get their own client for the Mac – Entourage – to sync properly with Exchange.
Exchange is designed to promote Microsoft hegemony in the workplace. Not to be useful to people, or do what they want. It’s patently obvious why it won’t work. Now, if Exchange supported POP or IMAP (removed a version or two back) the iPhone would be able to at least pull down email. But I bet you can use Safari via Outlook Web Access to get to your email, so it’s possible to get to your mail anyway. At least the new beta version of Safari on my Mac can properly use OWA completely for the first time.
Thanks for the pretentious response… (as i stated i might not understand a technical issue) My office excahnge displays hegemony, is useful, AND does what i want, its talented
Just a unsophisticated mac user trying to get some simple feedback…
What, no reponse to the Keynote iPhone (corporate) demo?? i’m hoping for something pompous!
Sorry Chris, didn’t mean to sound pretentious. It just the irony makes me mad. Microsoft designs software that does not work correctly with even their own servers, let alone allow some other company tie into their technology. They sure are lucky to have such good friends in the current administration.
And Jibi is right, the support is there, it’s just turned off. And because Windows is so vulnerable to spyware, viruses, and trojans, they have to turn off IMAP and POP. Our IT department is not willing to let our PCs be vulnerable just because we Mac users need IMAP, even though our computers are still invulnerable to such dangers. They keep telling us the attacks are coming, and I keep waiting for the first one to happen to motivate me to buy “protection.” Until then, we Mac users suffer because of the inferior technologies MS foists on their customers. And the rest of the world has to go wanting because of a general lack of security thanks to the “standards” adopted by the corporate world.
@Eric
voicemail in your e-mailbox HAS been around for years, a simple google search will prove that.
Octel’s unified messaging product is just one of those products.
If you recall, the same argument for price point was made when the iPod was released. In comparison it’s price point, it was higher than the next competition. Now they own over 80% of the market and the iPod is not getting cheaper. This show a pattern in this country to spend when something becomes the next gotta have it item. The iPhone will do that. I love apple products, but I know die hard windows freaks who are getting out of there contracts to buy one of these things.
This phone will revolutionize how people look at and expect phones to run. I can only imagine when Steve Jobs pulls the stick out of ass and allows people to program apps for it what this phone will be capable of. Watch and see. Companies will not allow them to grab the lead like they did with the iPod. They will copy and follow this phone which will force apple to continue to update and change the technology. If this works, as in the case of the iPod, companies will spend so much time catching up that they will never overtake the iPhone. It is the big “IF” that is the question.