Granny calls him a hopeless fanboy.
Jim: Welcome to Geek and Granny, a candid forum discussing pressing (or not so pressing) current events in the technology landscape, with representatives of the technology community. Our two panel members represent distinct viewpoints and perspectives, and as moderator I will attempt to navigate the debate to some natural conclusions, or at least avoid any serious bloodshed. Mmmm?
Agnes: I’m sure we can keep it to a minimum.
Harry: I only go for the jugular in Grand Theft Auto! [smiles]
Jim: Sure. On my left is Ms. Agnes Titlebore, whose long and storied career has included executive roles at everything from software startups to corporate giants. Welcome, Agnes.
Agnes: Hello, glad to be here.
Jim: And to my right is Harry Geary, the renowned tech blogger, video game reviewer, and open source advocate. Welcome, Harry.
Harry: Thanks for having me.
Jim: As our inaugural forum, we thought the most fitting topic would be the recent release of Apple’s iPhone.
Agnes: Yes, there hasn’t been enough coverage of that, has there now? [smirks]
Jim: Well, yes, everyone seems to have something to say about it, but let’s see if we can bang this around a bit and help the folks out there that are drowning in all these bits. To keep things simple, I thought we could cover three areas: What is Apple’s game here, how have they done so far, and what should they do next? Sound good?
Harry: Yeah, that narrows it right down.
Jim: So it seems to me that Apple is clearly targeting the consumer cellular market here, as a start towards bigger things…
Harry: Wrong! It’s much bigger than that. Apple is trying to revolutionize our digital experience overall, the same as they’ve always done. Just like Steve said on stage, it’s a phone, iPod and internet device, and the best of each that I’ve seen so far.
Agnes: Gosh, is this what they call a “fanboy” in the forums? I never met one in person. I haven’t seen any other companies making iPods, dear, so the “best iPod” is kind of a pointless measure, isn’t it?
Harry: You know what I mean - a portable media player. I’m no fanboy, Granny. Can I call you Granny? [smirks] I mean, games on Apple hardware really suck out loud, the iPod doesn’t support Ogg format - but you have to admit that the iPhone is a homerun.
Agnes: Well, I wouldn’t say that, but it is quite impressive for a few reasons.
Jim: Before we get into that, would you agree, Agnes, that Apple is doing more here than just making a consumer mobile phone play?
Agnes: Sure, absolutely. But not the way this Geek - can I call you a Geek, dear? - was gushing about. I think Apple is definitely trying to position the iPhone as “more than a mobile phone”, but other players in this field have been doing the same for years.
Harry: But Apple has outdone them here…
Jim: Come on, give her a chance to finish her thought.
Agnes: Thanks. I think what they’re trying to do is put themselves into the driver’s seat in this area, like they did with portable media players and the iPod. My comment earlier was actually a compliment to Apple - people don’t buy “MP3 players” anymore. They buy “iPods”. Apple has been scouting the field, seeing where the players are weak, seeing where there’s an upside in terms of consumer experience, and they’ve taken their shot at it. The interface is innovative and intuitive, two things that no mobile phone in the past 3 years can claim to have achieved. And the quiet little revolution here is the activation process that Apple negotiated with AT&T. They’ve truly taken the mobile phone purchase experience out of carrier stores and mall kiosks, and into Apple retail stores and the home. Quite brilliant on their part.
Jim: You’re starting to sound like a bit of a fanboy yourself, Agnes.
Agnes: Not at all. I respect what Apple has done on these fronts. But I have serious doubts that they’ll be as successful here as they were with the iPod.
Harry: Why not? [brandishes his iPhone] This thing is gorgeous, works brilliantly, and…
Agnes: Watch it dear, you’ll get drool all over it.
Harry: Yeah, yeah.
Jim: OK, so we’ve moved on to “How are they doing?” Harry, I think your position is pretty clear.
Harry: Well, I’m pissed that they’ve closed the platform (lame-ass Web 2.0 apps don’t count). But yeah, I think this thing is excellent, and I think they’ll be a big player in the phone market from here on out. The big player, eventually.
Agnes: Closing the platform was another smart move by Apple - they need some space to build faith in their platform, for consumers and the carriers. If they had pushed this thing out there as a brand new mobile platform, and people started loading all the usual crap onto it that they do with Windows Mobile and Blackberrys, they would have marginalized themselves right out of the gate.
Harry: That’s just the cost of an open platform. The platform has to be able to take advantage of innovation in the market, not just in Apple’s labs. Natural selection will weed out the good stuff from the bad, and…
Agnes: OK, OK, I don’t want to trigger a lecture on the virtues of open source. My point is that normal human beings, non-geeks, don’t get the distinction. It’s all part of the product, and if my phone locks up, I’m going to yell at the two names on the face - the guy who made the handset and the guy that sold me the service. But to get back to the question, my reservations stem from the fact that this is a much more complex market that Apple is jumping into. Carriers have a lot of muscle, and, especially in the US, they want to control the consumer as much as possible. They have been notoriously intolerant of device guys muscling into their consumer relationships. Apple scored a win with AT&T with the iTunes activation and other aspects of their exclusive deal, but don’t expect that track record to continue.
Harry: Gosh, sounds a lot like the music industry to me. And Apple has really been dragging there, haven’t they? [grins]
Jim: I was about to say the same thing. Apple has been extremely successful in music along these same lines, haven’t they? True, their video efforts haven’t been spectacularly successful, but they are an undeniable driving force in music now, and they were nowhere 5 years ago. What makes this any different, Agnes?
Agnes: Well, they’ve been successful to a point, but they had market factors on their side in that one. The music industry was sitting at the side of the pool instead of jumping all over the technology that was available to transform their business, and digital music players were still fairly immature. The iPod and iTunes were aimed right at those weak spots, and they scored a bullseye. But even in music, that honeymoon seems to be over, doesn’t it? Universal dropping their exclusive contract is just the start. And I think things will be even harder for Apple in the mobile market, because the mobile phone players are much more savvy, and there’s a lot more at stake. The carriers have fairly sophisticated approaches for exploiting their networks, and the device manufacturers continue to innovate around their platforms. On top of that, people spend a lot more, directly and indirectly, through their mobile carrier, and the potential upside in terms of using the mobile network as a controlled channel for other things (including music), is huge. Apple’s trying to weasel into that market, and the players that are already there won’t just sit around and be marginalized.
Jim: Well, I wouldn’t describe what Apple is doing as “weaseling”, but I take your point.
Harry: I really don’t see any difference here. People hate their mobile carriers because they feel like the service and support stink, they spend too much, and they get nickeled and dimed for everything. Geez, if I go over on my minutes, I have to take out a loan to pay my bill. Sounds a lot like CD and concert prices in the music industry. Those guys had to be dragged into online music by their [censored], and Apple was the major force doing the dragging. This all applies in the mobile market, too. Mobile phones today really do suck, when you think about it. The hardware is interesting in some cases, but the operating systems are really pretty lame, and people don’t like them. They barely tolerate them. Same goes for carriers and their crazy-ass plans and so-called customer support. That sounds like an opportunity to me, and I think Apple will be the white knight that rides in and saves us all from all this mediocre stuff. Just like they did in music.
Agnes: I’m sure that’s the attitude Apple has, but I really think they’ve fooled themselves (and you, dear) into a state of over-confidence. iPhone will peeter out in the next 12-18 months, after a much more abbreviated honeymoon. Apple might make their numbers in the next quarter, but not for the next year.
Harry: I’ll be laughing when they hit 10 million next year.
Jim: OK, so what should Apple do next?
Harry: More of the same. They need a 3G model soon, especially when they try to sell these things in Europe and Asia. And they have GOT to open up the platform so we can write apps for this thing.
Jim: What’s your advice for Steve Jobs, Agnes?
Agnes: I’m sure that Apple will follow their usual approach here. They’ll target mass consumers and so-called thought leaders - geeks like Harry that will lap these things up and tell all their friends and family to buy them, too. And they’ll largely ignore or marginalize business users in their plans. But again, I don’t think it will work in this space. The carriers will subsidize (directly or indirectly) competitive innovation with other handset developers, to keep Apple from being too much of a controlling force. Eventually, Apple will plateau as a marginal player in this space. And if they don’t support business users, sell to corporate accounts, cater to corporate IT shops, then they’ll just end up with a smaller piece of the pie when that happens.
Jim: OK, that’s clear enough. Doom and gloom for Apple, eh?
Agnes: Not really, just no fame and glory in this case. They’ll still manage to make a lot of money with overpriced hardware, as they always do.
Harry: You’re just PO’ed because you can’t use Exchange with it. Stick with your Blackberry while the rest of us move on. Apple has the hardware platform, iPhone, the operating system, Mac OS, and the network platform, iTunes, to win huge in the mobile market. In the media market, actually. Just wait until they start to do more with iTunes and networking with this thing - they are going to be the driving force in the mobile market.
Jim: OK, OK, any last words, guys?
Agnes: I know it seems petty, but speaking of Blackberrys, the keyboard on the iPhone is really awful.
Jim: Hmm, yes. Well, that’s it for this round of Geek and Granny. See you next time.
Agnes and Harry are fictional characters. Any resemblance to individuals living, digital or dead is unintentional.