iPhone – iPod way or Mac route?

Apple released its much awaited iPhone on June 29th. The wait, the hype and the buzz around the product was expected, but still it’s really hard to believe the overnight queues outside the AT&T and Apple showrooms on June 29th. People waited hours in the queue to buy a mobile phone. In the industry where the service providers give away the phone for free, or sometimes even with cash back, people are eager to buy a $500 iPhone. Well they are the loyal Apple early adopters, but the million dollar question is: will iPhone do an iPod or will it go down the memory lane like the Macintosh?

iPhone is a very closely protected product like Macintosh was in the early 80s. Steve Jobs is well known for controlling the end-to-end development of his products. (If Apple had the strength of laying down their own cellphone network, it would not have surprised me if they went for that.) So in order to control its product closely Apple released the product only with At&T as the sole service provider. This is not the only tight coupling in iPhone. Apple has its Mac OS on the iPhone, and through it Apple controls what software can run on the phone and what cannot. Like Apple has put Google products like Maps and YouTube on the phone. In short, Apple is doing the same thing that they did with the Mac, creating a closed ecosystem for its product. This makes me wonder if this is a call to a Microsoft to come up with a more open ecosystem and concur the World?

iPhone is a design genius just like iPod. Each reviewer who reviewed iPhone gave great reviews. Walter Mossberg of WSJ and Steven Levy of Newsweek describe iPhone to be revolutionary and the best product in its class that lives up to the expectation. People admire the design work of Apple. iPod is the most sold personal music player in the World.  So just like Apple took over the personal music player market from Sony and others, there is no denying of the possibility of them doing the same with the iPhone.

iPhone does differ from iPod in some significant ways. The release of iPod was a modest release. The expectations were limited and there was no hype. And as expected, the big players in the personal music player market did not take it that seriously. But in case of iPhone, the case is different. Steve Jobs has become a design icon with each successful release of iPod and the expectations here were set as high as possibly can. And of course, all the major players in the mobile phone as well as other related business are on high alert to take on the iPhone. As per the early reviews, iPhone meets or beats the high bar set by Apple for Apple. Another significant difference is the product dependency. Apple went all alone with the iPod with its own software, music store and the hardware. But in case of iPhone, if they want a similar global reach, they will have to do partnerships with service providers around the World (which Apple is known for not liking that much).

iPhone release has stricking similarities with both iPod and Macintosh. iPhone is sure to change the entire dynamics of the cell phone device business. I think they also got the price equation pretty correct (people who are willing to buy iPods for $300, will happily pay $100 or $200 extra to get the best phone in the market, which is also an iPod). Within a few years, Apple will have a whole range of iPhones in the market with different functionalities and price tags to meet the needs of different customer segments. The thing to watch for is the partnership strategy of the company. Will the company learn from its past and go for a better approach to be more open for partnerships or will the competition come up with better strategic positioning and send iPhone the Mac route? But if they get this one aspect right this time, there is no denying that iPhone is going to rock the World the iPod way!

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