Apple could apply a number of the iPod's outstanding design features in a new phone that would make a good, competitive phone, and then sell customers both a good phone, and a good music player. Some of the potential risks in trying to sell their own phone might be mitigated now that Apple has a strong retail store presence, but other challenges are still out there.
First, imagine an Apple branded phone with these iPod and Mac features:
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•a simple, coherent user interface;
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•easy support for dial up networking (using the phone for Internet);
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•easy support network gateway (using local Internet on the phone);
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A Phone To Call Their Own
Leave long playback features to the better suited iPod, and build an iPhone that works well as a phone. Users are just inconvenienced when their iPod battery runs out, but they are stranded when their phone’s battery dies.
Challenges to an Apple iPhone
It's fun to imagine Apple building a phone, given their unparalleled prowess in building functional user interfaces and in integrating features in ways that make them usable for mere mortals. Apple also has a growing market of fans willing to buy pretty much anything they release, so there is some assurance that money spent on developing a phone wouldn't ever be a catastrophic failure, even if it was a smaller hit than the iPod. Apple does face some significant challenges however.
For starters, Apple's global business is based on shipping universal products: a single box that can be sold in various markets. This simplifies manufacturing, design, shipping and marketing issues. The global mobile phone market, however, is fractured both regionally and by different wireless technologies and radio spectrums.
Apple would either have to release a variety of different phones, with each model tied to a particular type of network or vendor, or pick a single provider and technology, and limit phone sales to the availability of that select service.
Apple would also be selling hardware in a very competitive market, where existing vendors ship low margin units at high volume. The majority of mobile phone sets are also paid for initially by service providers, who effectively rent the equipment to end users over the term of a contract.
That business model resulted from a competitive service industry weary of lowering prices; it serves to lock users to a provider for at least a year to minimize the costs involved in finding and retaining customers.
Apple doesn’t yet have to deal with service providers; an iPhone would be a whole different ball game. A potential problem is related to the mobile phone service providers' purely evil core. Wireless service providers are all desperate to find new ways of getting money out of a finite pool of customers.
Apple has worked with evil partners before (Microsoft and the RIAA spring to mind), but how deep will Apple sink into the predatory world of Verizon's anti-consumerism before they lose what makes them interesting and innovative, and drives their current success?
Possible Roads to a Successful Apple iPhone
Users can pop the SIM card out of their existing GSM phone and insert it directly into a new Apple iPhone, without even dealing with their provider. Users can also buy prepaid SIM cards that activate service on whatever GSM phone they want to use, making GSM an attractive option for travelers.
A second way Apple could parlay their design savvy into the mobile phone world would be to create a portfolio of features, and then brand and license those features to existing phone makers.
Just as Apple now runs a "Made for iPod" program, they could create a brand and logo for an "Apple iPhone" that included their iPod dock connector, a specific user interface design, minimum interoperability standards for Bluetooth connectivity, and support for QuickTime and other file formats.
That would deliver Apple's core strengths to the phone manufacturers, who could then innovate and compete at delivering the best Apple Phone branded designs.
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