It’s An Apple Life
Apple dropped the “computer” from its name Tuesday, further underscoring the company’s plan to permeate every aspect of a consumer’s digital lifestyle, as CEO Steve Jobs delivered the type of fast-paced and entertaining presentation that has become synonymous with the company.
Mr. Jobs delivered on rumors of an Apple-branded phone, called the iPhone (see “Steve Jobs iPhone Call”). It also brought out Apple TV, a digital media adapter Mr. Jobs talked about last fall (see “Apple Tunes iTV for Battle”).
The Cupertino, California-based Apple Inc. made its product and name-change announcements at Macworld—especially ironic since the expo focuses on the use of Macintosh computers. One attendee seemed slightly disappointed that more wasn’t said about the upcoming Leopard operating system. But he and other conference participants—as well as several analysts—believe that the iPhone and Apple TV could change the mobile device and digital living room markets, respectively.
“Smartphones have been around for years but haven’t been really popular,” said Kurt Scherf, vice president and principal analyst for Parks Associates. “Given Apple’s penchant for making simple-to-use [devices], they could really affect the market.”
Analyst Avi Greegart, who covers mobile devices for Current Analysis, agreed. “The critical thing is the radical user interface and integration (of music, Web-surfing and telephony,” he said. “It could impact other vendors”—maybe even to copy what Apple has done.
He noted that in Europe, Sony Ericsson sells a popular phone with a touchscreen for music management but the screen doesn’t work with telephony. Meanwhile, Palm has phones (see “Rim Slaps Palm Silly”) with similar screens—but they don’t expand to media-manipulation.
Apple’s so-called “multiple touch” screen technology was likely what it had gotten patented last year when it filed an application with U.S. patent officials.
But at $499 or $599 a pop, the iPhone is going after very different users—possibly setting it up for failure. After all, the iPod culture is mostly youth-oriented, and teens and young adults may not have $500 or more to spend on a device, analysts warned.
Apple seemed to understand the gamble—Mr. Jobs declared the company is only going after 1 percent of the global cell phone market, aiming to sell 10 million units within a year of launching the phone in June 2007.
“They need to manage expectations,” said Mark Kirstein, vice president of multimedia content and services for iSuppli. “They’re going to see competition threat in terms of unit shipments… and 10 million units is not an insignificant number.”
Meanwhile, Apple TV—dubbed iTV by most—was a bit disappointing. While it stores digital content nicely, it doesn’t do what observers had hoped—download video content wirelessly from the Internet and transmit the movies to the television set.
“The content they’ve got right now is not overwhelming,” Mr. Scherf said. Even though Apple said Paramount will now sell over iTunes, they’re really old movies—the first six Star Trek films and the like.
“So they won’t want to disappoint consumers if there isn’t that critical mass yet” that will make downloading wirelessly worthwhile, he said.
But iTV still has the potential to change the home entertainment market. Mr. Kirstein said wireless digital downloads to the living room is at the same stage as MP3 players were “before Apple entered the market for them.”
And iPhones, analysts said, may not be the most popular phone—but they could be a profitable niche selling at higher margins.
Two attendees admitted to being wowed by the iPhone news.
“I’ve been waiting for Google earth integration [into phones],” said Matthew Bushby, a computer system officer for Monash University in Melbourne, Australia who waited in line at 4 a.m. in order to get into Mr. Jobs’ keynote presentation.
