It’s not en vogue to say this, but Apple Inc. isn’t King Midas. The company has certainly made a great recovery in the desktop space, and its “fashionable computing” expertise translated brilliantly to the portable-music arena via the iPod. But like any technology company, Apple’s not immune to missteps, and the iPhone might be just such an example.
On the surface the iPhone is a great little gadget, and Apple’s hardcore fans and techno-geek early-adopters will surely line up to get one. The Internet community buzzed last year when rumors surfaced that Apple was working on a portable gaming device. With the iPhone’s stated functionality, it could very well be the device to which those rumors alluded. But is the iPhone really the right gadget at the right time?
The videogame industry has seen its fair share of vaporware, so Apple evangelists can take comfort knowing their trusted techno savior will deliver the goods. Yet the videogame industry has also seen its fair share of failed ventures and botched strategies, two of which Apple should have heeded before opening the kimono on the iPhone.
Industry Landscape
One of the reasons Apple had such great success with the iPod was the ease of its iTunes music store. More important, though, was the uncertainty swirling around the portable-music space. Several MP3 players already existed on the market, but none was dominant, and the format was seen by many as an underground “startup” that needed credibility. So when Apple unveiled the iPod and its industry-backed iTunes model, the market got exactly what it was looking for.
As Apple unveiled the iPhone, though, it did so in a landscape where consumers already own a cell phone, where they already own a portable game player, and where they already own an iPod. “Oh, but this is an all-in-one device.” Yes it is, but aside from a few bells and whistles and the Apple brand, it’s not all that different from devices that Motorola, Samsung and even Cingular Wireless, with its Blackjack, have already released.
The videogame community, of course, is interested in the gaming potential of the iPhone. But even there, we’ve already seen convergent devices — and they’ve not exactly been rousing success stories. Anyone remember the Gizmondo? How about the digital taco … er, Nokia NGage? Both held great promise and had people excited, but when the rubber hit the road, the demand just wasn’t there. Even Sony, with its second-to-Nintendo PlayStation Portable, has struggled getting people to buy one of its handheld units for anything other than watching movies on a plane. Is the Apple brand sufficient to get consumers to buck the trend of poo-pooing convergent devices?
Price
Based on its price, I doubt it. Technophiles surely will want an iPhone, much like consumers wanted a PlayStation 3, but what will mainstream consumers think? Using the PlayStation 3 as an example, some statisticians say it’s currently in third place in the early next-gen console race. Several factors exist for this, but the most significant is its price — which just happens to be the same as an iPhone’s.
If consumers balk at paying $500 or $600 for what amounts to a computer for your TV, what makes us think they’ll pay that amount for an Internet phone for your iPod? One could make the argument that the PS3 was simply up against slightly less-powerful but less-expensive hardware. The iPhone will face the same obstacle. And, when you consider the contracts that most wireless providers require, the penalty for consumers to break an existing contract could make the iPhone even more cost-prohibitive.
I’m all for seeing someone shake up the cell phone space, but I also wonder whether these convergent devices are really what consumers want. Is Apple actually meeting a demand, or is it just trying to create one? In the case of gaming-driving convergent devices, the consumer adoption simply hasn’t been there, and I’d argue that gamers are some of the biggest techno-geeks around. So if our demographic is still lukewarm to the concept and to the price, is Apple really doing anything other than taking a risky roll of the dice? History has shown that expensive all-in-one devices don’t always fly. Then again, history has also shown fashionable Apple technology coming out on top. So, which history book are you reading?
— Jonas Allen
