Wall Street Journal Claims Verizon Gets iPhone

The Wall Street Journal has published an article claiming that Verizon will announce the release of Apple’s iPhone on their network at an event Tuesday. In fact, Verizon has announced a special media event for Tuesday, January 11, 11 AM Eastern. This is a pretty strong claim to make by a respected news source. Add the fact that Verizon did schedule an event in a style reminiscent of Apple, and this seems to be very credible.

Now the questions are how much will Apple be involved in this event, including will Steve Jobs make an appearance, and when will the “vPhone” go on sale? Given the fact that Apple has instituted a vacation black-out for its employees, it seems likely that the phone will go on sale towards the end of the month. Like I said prior, this should be an interesting few weeks.

Something is Up Apple’s Sleve

So it appears that Apple has declared a vacation blackout for the last week of January and first few weeks of Februrary. Then AT&T announces they have cut the price of the iPhone 3GS in half. Perhaps this is a total coincidence, but it does seem oddly timed. Regardless, this is shaping up to be an interesting few weeks ahead.

Apple Predictions

A market research analyst gave some predictions on Apple today. Here are some highlights:

  • 95% chance of iPhone on Verizon, expected in March
  • 90% chance of iTunes Cloud Service
  • 5th Generation iPhone with “near-field communications” (NFC) capability

Will we see these predictions come through? Happy new year!

Apple Music Events: They’re Not Just for iPods Anymore

Apple recently hosted their yearly “music event”. As expected, they introduced new iPods. However, this particular event had a lot of little nuggets of tantalizing information. Now that I’ve had some time to digest it all, I’ll be writing a series of articles on these nuggets. However, I thought I’d quickly touch on a few topics.

Steve Wozniak was in attendance. Steve Jobs seemed genuinely surprised and delighted. Does this have any significance? When was the last time Woz attended any official Apple events?

It’s interesting that Apple introduced printing into the upcoming iOS 4.2 update for November. My guess is they got enough complaints about the iPad not being able to print, especially from business users, that they added it into this update. I felt that by not including printing originally, Apple was trying to make a point that the iPad was in many ways a replacement for paper. Perhaps the world just isn’t quite ready for that yet.

Steve Jobs made it a point to emphasize that an iPod Touch is an iPhone without a contract. Why would he do this? If he was simply trying to make clear that the iPod Touch is an iPhone without the phone, it seemed like overkill. It also seemed like he slowed down and wanted to really drive this point home. Was Steve taking a jab at AT&T? Or was he swinging at the entire wireless industry? Or perhaps he was foreshadowing something else altogether.

Apple finally revived the Apple TV at this event. Which is somewhat interesting because Apple calls this their yearly music event. Everything else discussed at this event was music related, yet the Apple TV is obviously geared towards movies and TV shows. It simply could be the fact that this was good timing for Apple to release an updated Apple TV prior to the holiday shopping season. But it could also be a sign that Apple has finally figured out how they want to position the Apple TV. And maybe they feel the mainstream market is now ready to receive the Apple TV in earnest. The next few weeks and months should tell if Apple is really ready to take the Apple TV out of “hobby” status.

Steve Jobs also took a subtle swipe at competing devices. While discussing what consumers have taught them about the Apple TV thus far, he said, “They don’t want a computer on their TV. They have computers. They go to their widescreen TVs for entertainment, not to have another computer. This is a hard one for people in the computer industry to understand. But it’s really easy for consumers to understand. They get it.” This is a good point that I believe has relevance beyond the home media market.

When Netflix announced their app for the iPhone a few months back, I was a little surprised that Apple allowed it, since it seemed to compete with their iTunes movie service. So you can imagine my surprise when Apple themselves announced Netflix support in the Apple TV. Suddenly it seems Apple is very cozy with Netflix. What could this mean?

Finally, there seems to be some tension between Apple and Facebook over Apple’s new Ping social network. I noticed during Steve Job’s speech that Ping showed that you could log in with your Facebook ID. I even mentioned to my wife that this was a great move on Apple’s part. Yet the next day I read reports that this feature was not available. Sure enough, this feature was not available, even though it still mentioned FaceBook on Apple’s web site. Something interesting is going on behind the scenes and I can’t wait to find out what that is.

So stay tuned as I tackle some of these topics in more depth very soon.

Antenna-Gate Heating Up

Just the fact that it has been given a “-gate” moniker shows that the publicity regarding the alleged antenna flaw with the new iPhone 4 has reached widespread proportions. Already this week has been hot and heavy with iPhone 4 antenna-related news and today seems especially heavy.

It all started on Monday with Consumer Reports stating they can’t recommend the iPhone 4, even though it is their highest rated smartphone, because their testing shows there is a reception problem. This started off a renewed wave of interest in the story and the next few days were full of articles and bloggings giving opinions, suggested fixes, speculation on the possible problem, as well as conspiracy theories. On Tuesday Consumer Reports stated that they believed Apple should fix the problem for free, which then triggered outcries for Apple to recall the iPhone 4. There were even bookies giving odds on the probability of Apple actually doing a recall.

Today’s news is that an Apple engineer warned of a possible problem with the antenna early in the design phase. As well, reports are that current shipments of the iPhone are delayed possibly due to Apple deploying a manufacturing fix for the problem. Other reports are that iOS 4.01 may be released today, containing the signal strength indicator fix that Apple has promised. Finally, Apple has called a press conference for 10AM Pacific Time Friday morning. This of course, is just sending the press into a frenzy as they try to guess what might be talked about at this press conference.

As much as has been made of this problem, based on my reading I believe that there may actually be a problem – but at the same time it is likely being blown out of proportion.

Firstly, while there are many reports of the problem, there seem to be just as many people who are not reporting any problems. Of course, with the sheer volume of iPhones sold, even a small percentage of problematic phones could be a very large number. So the question is how many iPhones are actually affected? It will be interesting to find out the answer, if we ever do.

Consumer Reports’ testing seems to prove there is a significant signal loss, which they believe could cause dropped calls, if the phone is held in a certain way. Consumer Reports tested 3 different iPhones, which they claim they bought all in New York City, albeit at different stores. Of course, if those 3 phones were made in the same factory, then it could be that they found a flaw coming from a manufacturing flaw in a particular factory. It will be interesting to hear how Apple responds to Consumer Reports’ claims.

Finally, even with all the bad publicity, Apple is still selling the phones like hotcakes. Apple’s stock has taken a small hit, but many analysts are claiming that this is simply an opportunity for investors to get in on Apple stock while the price is down. There is the saying that “there is no bad publicity” and as long as Apple deals with the situation correctly, perhaps that saying will hold true this time as well.

Ya Think?

An article on Forbes.com states that if Apple starts selling the iPhone on Verizon, it could damage the momentum Google has built up for the Android devices.

I’ve said in the past (here and here) that even just a rumor that an iPhone would be available on a particular network could be enough to damage or short-circuit any momentum competing smartphones generate. Obviously, if the iPhone were to be released on a particular network, it would likely dominate that carrier’s smartphone sales while pent-up demand was filled. But the real proof in the pudding would be head-to-head sales after the initial sales surge. Given the power of Apple’s marketing machine right now, it would be hard to predict any outcome other than Apple coming out on top.

Floating a Bomb

I wrote an “experimental” article back in August where I claimed Apple was going to release the iPhone on Sprint. Of course, this was just a hoax, but I wanted to gauge reaction when people thought they could get an iPhone on Sprint. However, the point of the article was that I thought Apple could “nuke” the landscape of smartphones on a wireless carrier if they simply floated the rumor that the iPhone would be coming to that network “in the near future”. I figured that there were (and still are) many people who really wanted an iPhone but didn’t want to or couldn’t leave their carrier. If these people were given a glimmer of hope that they could soon get an iPhone, they would put off purchasing another smartphone in anticipation of getting an iPhone. Obviously, that kind of thinking could be devastating to the sales of other smartphones trying to gain a foothold in the market.

Recently, there have been a lot of articles being written suggesting that Apple is going to release the iPhone later this year on a multitude of carriers. As I’ve written previously, I highly doubt that Apple is going to release the iPhone for any carriers that are not using the same technology as AT&T’s current network (GSM/GPRS) or their future 4G network (LTE). It simply doesn’t seem to make sense for Apple to devote significant resources to creating an iPhone for network technologies that are soon to be out of use. So the flurry of articles recently written make me wonder if Apple is “dropping the bomb” and trying to derail the momentum of other smartphones.

It seems to make sense. While the various Google phones are not really selling all that well as compared to the iPhone, they have gained a fair amount of “mindshare”, meaning that they are starting to be acknowledged by people as a relevant competitor in the marketplace. However a carefully calculated strike could significantly slow down their momentum. Perhaps Apple feels that this is the time to put the squeeze on their competitors. Perhaps it has something to do with the timing of the iPad. Perhaps it means nothing and Apple is not intentionally doing anything. Or perhaps the articles are correct and we will in fact see the iPhone on other networks this year. But I doubt that last sentence.

Don’t Forget the Wii

With all the talk about the iPad and the iPhone, it is easy to forget another technology device that shook up the established markets just a few short years ago. An article I recently read reminded me of this fact. The Wii, rather than catering to the traditional “gamer”, created a device that would appeal to the mainstream. Similar to the way so-called experts downplayed the iPhone and are downplaying the iPad, many gamers chided the Wii’s relatively weaker graphic capabilities and simplified controllers. Of course, their viewpoints were narrowly focused and didn’t take into account that the Wii would redefine the gaming market. The rules of the Old World don’t apply in the New World. The following quote from the article, “Is casual gaming destroying the traditional gaming market?”, sums this up:

The big videogame console makers and developers catered to performance-oriented customers who demanded more and better and who were repeat buyers. Then in 2006, Nintendo’s inexpensive Wii console came along, emphasizing accessible game play over elaborate scripts and point harvesting. So far, Nintendo has sold 28 million units of the Wii in the U.S., while Microsoft (MSFT) has sold just 19.4 million Xbox 360s and Sony (SNE) 11.7 million Playstation 3s—despite both launching before the Wii.

The parallels between the Wii and the iPhone (and it seems with the iPad) are almost eerie. New World technology shakes up the Old World markets and most of the people who are experts in the Old World seem completely caught off guard.

Stormy Experience

I had an opportunity to work with a BlackBerry Storm phone for a client the other day. Granted, I believe it was an “original” Storm (which was widely criticized when released but later updates helped fix some issues), but let me just say it really made me appreciate the iPhone so much more. I’ve played around with Storms before, but this particular time I had to enter in a lot of text. And it was basically the difference in the ease of typing that was most glaring. It is really difficult to explain with words how difficult it was for me to type with the Storm, but suffice to say it is evident just how much effort Apple has put into making the Touch OS as user-friendly as possible. For users who have only owned an iPhone or iPod Touch, they may not appreciate or even realize the attention to detail that goes into making their devices as simple and easy to use as they are. Luckily for me I have used many smartphones over the years. I have experience with a lot of different designs so I have a feel for good and bad designs. Still every once in a while I have an experience like this that surprises me.

This experience made me realize something else. In the 3 years since the iPhone was released, the interface has remained almost identical. Yes, there have been improvements, but for the most part it is the same interface as it was in 2007. Contrast this to the phones from BlackBerry, Palm, and most recently Google. Each of those vendors have released several different phones, with different names, each with different hardware interfaces (for example hard keys vs soft keys) and with many differences in software interface. Apple has had 3 total phones. At quick glance, it is hard to distinguish them, especially the 3G and 3GS phones. And that’s the beauty of it. Apple gets it. People don’t care for or necessarily need an excessive amount of choices. Build it and they will come (but build it right the first time – unlike the Storm). And from a marketing standpoint, it is so much easier to promote a singular concept (the “iPhone”) then a mess of devices that all have different features.

Speaking of Strikeouts …

As I mentioned in part 3 of my iPad series of articles, many commentators were downplaying the iPhone prior to its introduction. I stumbled upon this article from 2007, titled “Apple should pull the plug on the iPhone“. It is a classic example of the type of old world thinking that still predominates the technology industry today. After the runaway success of the iPhone this article reads like a parody. It includes such gems as:

“It’s the loyalists who keep promoting this device as if it is going to be anything other than another phone in a crowded market.”

“…the mobile handset business. This is not an emerging business. In fact it’s gone so far that it’s in the process of consolidation with probably two players dominating everything,”

“During this phase of a market margins are incredibly thin so that the small fry cannot compete without losing a lot of money.”

“As for advertising and expensive marketing this is nothing like Apple has ever stepped into. It’s a buzz saw waiting to chop up newbies.”

“… phones go in and out of style so fast that unless Apple has half a dozen variants in the pipeline, its phone, even if immediately successful, will be passé within 3 months.”

“…its survival in the computer business relies on good margins. Those margins cannot exist in the mobile handset business for more than 15 minutes.”

“If it’s smart it will call the iPhone a “reference design” and pass it to some suckers to build with someone else’s marketing budget.”

(This last comment is very interesting in light of what Google is trying to do with the Android.)

Apple’s track record since the return of Steve Jobs has been to introduce revolutionary devices into stagnant markets. This author assumed that the iPhone was just going to be another me-too phone. He failed to have the foresight that the iPhone was going to change the rules of the how the game was played. The iPhone was such a breakthrough device that it completely transformed the cell phone market. Now, this same author is writing articles such as “Apple’s iPad is far from revolutionary“, with the same type of logic that he used with the iPhone article referenced above. I guess some people will never learn.

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