Apple

Follow the leader

Apple ditches its unusual business model to boost handset sales


ALMOST a year after launching what he thinks is the phone to change all phones, Steve Jobs, the boss of Apple, took to the stage again this week to introduce its second version, the iPhone 3G. In the past year Mr Jobs, who had surgery for pancreatic cancer in 2004, has visibly aged. Looking emaciated, he farmed out large parts of his speech, which is usually a big marketing and media event, to other presenters. But he still held the crowd in thrall as ever.

The new iPhone mostly addresses the shortcomings of the old one. It has GPS satellite-positioning technology that will allow a new and exciting category of services, such as location tracking, that depend upon the phone knowing where it is. It works with fast third-generation (3G) mobile networks, not just slower 2G ones. And it panders to corporate customers with features such as better integration with their systems and “remote wiping” of data if a handset goes missing.

Perhaps above all, it is a lot cheaper, starting at $199, just below what the industry sees as the pain threshold for the mass market. What Mr Jobs did not say was that the reduction comes largely from a change in Apple's relations with mobile operators, such as AT&T in America. Operators will subsidise the new handsets to make this low price possible, but will also increase monthly usage fees—and will no longer pass a share of those fees to Apple.

This brings Apple in line with the business model used by other handset-makers, such as Nokia and Samsung. Getting operators to agree to Apple's novel revenue-sharing scheme seems to have hindered sales. Evidently Mr Jobs hopes to gain more from faster handset sales than he will lose by giving up his share of usage fees. By cutting the iPhone's price and increasing the number of countries where it is legally available from six to 70, Mr Jobs hopes to reach his goal of selling 10m iPhones by the end of the year. (So far, 6m have been sold.)

Competitors quickly tried to douse another conflagration of iPhone hype. “I see this as a catch-up release for Apple,” says Andrew Lees, head of mobile businesses at Microsoft, an arch-rival which provides software to many handset-makers. “We outsell them by two to one.” He points out, legitimately, that many phones using Microsoft Mobile software have long had both GPS and 3G, and have always tied into corporate computer systems.

Finland's Nokia sells the most “smartphones”, capturing 45% of the world market in the first three months of this year, and Canada's Research In Motion (RIM), the maker of the famous BlackBerry, is second, with 13%. Even in America, where Nokia is weak, RIM leads, with 42%, followed by Apple with 20%.

But Apple's impact on the industry has been greater than its market share suggests. The iPhone has set new standards in design and ease of use. A telling statistic from Mr Jobs is that 98% of users browse the web on their iPhones, 94% use it for e-mail, and 80% use ten or more features—including, of course, the built-in iPod music-player. As Mr Jobs joked, many users of other smartphones, with their clunky menus, cannot even find ten features.

This points to the ultimate role of the iPhone for Mr Jobs, Apple and the industry. There were personal computers before 1984, but it took the Macintosh, which Apple launched that year, to popularise the icon-based graphical interface that others copied, kicking off the PC era. There were digital music-players before 2001, but Apple's iPod made them both ubiquitous and user-friendly. In the same way, says Tim Bajarin of Creative Strategies, an analyst who has followed Apple throughout its history, the iPhone, with its elegant touch-screen interface, seems likely to be the gadget that sets the direction that others will follow in the era of mobility.

To bring that about, Apple is now turning the iPhone into a hand-held computer and allowing other firms to write software to run on it. Other handset-makers are doing the same, but the iPhone's operating system and programming tools, on display this week, are better than theirs. There is no doubt that Mr Jobs is trying to lead a third revolution in consumer technology in his lifetime.

From The Economist print edition Jun 12th 2008

Looking through the App Store. There's some potential there.

So far I'm interested in the remote app, which lets you control iTunes on your pooter from your iPhone (since I have a Mini from before they had remotes). Weather app. Find-A-Hooker app. Grow Op, the urban dealer finder. Gun Shop which has ammunition compatibility tables. And Meth Lab, the game.

But will it blend?

They got these in a day ago. Was gonna go into a Telstra shop to check out the 3G version, but realised that going into a Telstra shop to check out something made by Apple would be like giving my self a vasectomy with a pair of rusty, electrified secaturs.

It's been fucking freezing, for Brisbane, anyway, here, but there were still people camped out the from out the stores, twelve hours prior to the opening.

A disturbing insight into the human psyche.

I got one. It's great. Fantastic. But not worth 8 hours in line, and the attendant results of exposure.

I'll never, ever, wait in line again for an Apple product. There's nothing Apple could dream up that would be worth what I went through yesterday. The iPhone 3G isn't worth it, not even a free MBP would be worth it. Nothing. Period.

Why, you may ask, then did I wait. Well, once you've been in line for 2 hours, you're committed, right? After all, at the most, it'll only be another hour, right? Say that three times and you're done.

"Technological meltdown", they called it. "iPocalypse" was another witty term. Ridiculous, I call it. I feel like a fool for having waited. But more, I'm angry at Apple for not being prepared.

To be fair to the Apple Store employees, they were great. They gave us as much bottled water as we wanted (warm though), coffee, updates, and generally commiserated with us. Once inside the store they were quick and professional. So kudos to the hard working Apple Store people.

As for the AT&T employees? Well, they're not quite the same caliber. In line, I had to ask an AT&T guy three times, and pointedly, if they had any iPhones left. I told him, "It's a simple yes or no answer, quit equivocating!", like he'd know what "equivocating" means, even.

Now, I want all of you to go to your nearest Apple Store, a week from now, and walk in and buy an iPhone 3G in 10 minutes. Like I should have done.

#$&@<>+!

You are a consumer drone.

Instead of waiting in a queue for 8-hours, why didn't you:

Sink to your knees, drag your fingernails down your cheeks hard enough to leave deep furrows scarring you forever. Then try to swallow your tongue. (Be as dramatic as possible.)

I understand that those truely versed in self-abuse, can with great effort, swallow their tongue. (Yoga Master's can swallow their tongue too. However, they don't do it in a queue.

I'm sure, that you would get medical attention in time to save your life. (Mobs like that are watched very carefully by law enforcement with medical backup.) Next week, after your psychiartic eval is complete, you can buy an iPhone without waiting in a queue.

quote:

You are a consumer drone.

Aren't you the guy who had to run back to the store to get reimbursed after the price dropped on the last version (or was it the one before?), because you had bought it too soon? [raised eyebrow]

That makes me frugal, not a drone.

quote:

Originally posted by Black Jacque:
You are a consumer drone.

Yes. Yes I am.

But I'm not proud.

quote:

Originally posted by doggo:

I feel like a fool for having waited. But more, I'm angry at Apple for not being prepared.

I've got a friend who works at an Apple store in Georgia. On Friday she worked from 11:45am to 2am, and sent me a few pics of the massive line of people all awaiting iPhones. The store has 75 employees, and all of them were working on Friday, to make sure that all those consumers got their grubby hands on their precious iPhones. She told me that Saturday was almost as bad.

I don't see how you can be angry at Apple for not being more prepared. Any suggestions on how they could have made launch day go more smoothly? Should they perhaps have doled out numbered chits, or limited sales to 200 iPhones per store? I'm honestly not sure what else they could have done to prepare for massive numbers of people all wanting, nay, needing their iPhones on the very first day of release...

quote:

Originally posted by Oniichan:
Any suggestions on how they could have made launch day go more smoothly?

Um... yeah. Have all your iTunes activation servers up and running? How 'bout that? Considering it's a "worldwide launch", maybe be sure your servers can handle the capacity? Or maybe releasing a product everyone is clamoring for in 22 countries on the same day isn't such a good idea.

Or, how about asking the (open-air) mall management to let people stand under the walkways in the shade, instead of forcing people to stand in direct sunlight for four to six hours straight.

Seriously, the lines literally did not move for a couple hours at a time. So, you have 30 - 60 people in the store for an hour or more...? Why?

So, apparently, Onichan, you believe that it's unreasonable for your friend to have to work a 14 hour day to satisfy all those grubby consumers. Well, your friend should be angry at Apple too. One for forcing her to work 14 hours, and two, having the servers down on launch day leading to ridiculous delays and slowing the whole process way down.

quote:

... to make sure that all those consumers got their grubby hands on their precious iPhones.

Nice. I'm glad you're so above all that. 'Cause that makes you a better person than all those disgusting, materialistic, consumers. Does that mean you won't be wanting, neighhhh, needing an iPhone at all?

Just got to play with one today as I was out to lunch with a friend who bought it on the 11th. Pretty cool. He was whining his battery dies in under 8 hours so I pointed out the Settings->Networking->Disable 3G pref in hopes that will ease his power consumption.

quote:

He was whining his battery dies in under 8 hours

He probably hasn't gotten over the intital urge to be constantly playing with himself. Give him time. Eventually he'll leave it alone and be able to go all day.

'SUNDAY, 20 JULY 2008

I just went through Apple’s iPhone availability checker for all 50 states in the U.S.: one store in Hawaii has one model (8 GB), one store in California (out of 38 in the state) has one model (16 GB black), and the Fifth Avenue flagship store in New York has one model (16 GB white). That’s it.

So much for my “just wait a week and then cruise in and pick one up in five minutes” plan.

UPDATE: I mistakenly skipped New Hampshire, where they still have one model (16 GB white) at the Rockingham Mall. We regret the error.'

- John Gruber, Darling Furball

This message has been edited. Last edited by: doggo,

Jeez Louise! Despite the vicious sunburn and general discomfort, I'm glad I spent the time, specifically allocated to do so, to get my iPhone the first day.

Apple stores now open at 8 A.M. to handle iPhone 3G demand

"All of Apple's US retail outlets are now in a permanent launch mode and will open as much as two hours earlier each day to accommodate the unprecedented demand for the new iPhone. Also, at least some locations are now giving customers rainchecks for the day's iPhone 3G stock."

Holy shit. "Permanent launch mode..."? What the hell is going on? Are they just not manufacturing enough, or are there that many people that want an iPhone?

quote:

Originally posted by doggo:

Holy shit. "Permanent launch mode..."? What the hell is going on? Are they just not manufacturing enough, or are there that many people that want an iPhone?

Both, I suspect.

I'm not even gonna bother walking into an O2 store for another four weeks.

How Addicted to Apple Are You?

I have just over a month until I can get a new phone / contract.. but, I think the camera on the iPhone is what will decide me very much against it..

quote:

Originally posted by mausbiber:
How Addicted to Apple Are You?

Pfft, barely half addicted. (54%) I've owned a lot of Macs, but only two iPods and I have no plans to get the damn iPhone if it doesn't have copy/paste.