All the Macalope is asking is "Give iPhone rumors a chance."

For the record, the Macalope likes David Pogue’s work, despite the fact that he – tongue firmly planted in his cheek – called Pogue a nasty name the other day.

But, the Macalope thinks he’s wrong about the iPhone here – the Macalope believes there will be one.

Pogue basically has two arguments against the iPhone:

  1. Carriers currently hold the power over hardware manufacturers and Apple would be unlikely to want to put itself in the position it would have to accede to their demands.
  2. iPhone rumors have been floating for several years now and still no iPhone.

Addressing the first argument, Apple’s uniquely positioned to change the balance of power with the carriers. They’ve sold over 60 million iPods to largely satisfied customers who would be more than willing to consider making their next iPod an iPhone.

And then there’s iTunes. Apple owns the largest channel for online music sales. People want their songs to play on all their devices. No iPod owner is going to buy a ZunePhone because they’d have to re-license all their (legally) downloaded music.

As for the second argument, well, Pogue more uses it as a means of pointing out that rumors do not a product make, and he’s right (crank-powered iBook, anyone?). But the set-top box was rumored for ten years and, lo and behold, Apple’s gonna sell one. While rumors do not mean Apple is going to make something, they don’t mean it isn’t going to make it, either.

Apart from disagreeing with his conclusion, however, the Macalope heartily agrees with the rest of the post.

I cannot imagine Apple giving veto power to ANYONE over its software design. It just ain’t gonna happen.

Neither can the Macalope, he doesn’t think that will be necessary. Apple has weight (it owns the digital music market). It can throw it around.

I think cellphones are as ripe for a radical rethink as the online music store was when Apple set up iTunes.

Quite. As a matter of fact, the Macalope would pay good money for a well-designed phone that’s easy to use and a beautiful marriage of hardware and software.

If only there were a company that does that kind of thing…

But let’s not go all wiggy every time someone passes around an iPhone rumor on the Web.

Indeed. Let’s not. But let’s also recognize that there is a great business opportunity here and Apple’s got all the right stuff to fill the gap.

Also, while Vic Keegan went off the deep end in proclaiming that Apple was losing the digital music war to ring tones, there is an increasing convergence between cell phones and digital music players. The Macalope’s gotta think Apple sees this coming and is heading it off at the pass.

  • doppelf:

    I would love to see an Apple crafted phone. I could see them offer a PDA-do-it-all phone on the high end and a super sleek music/games/phone for the mainstream market.

  • They can say Apple is losing out to ringtones all they want, I’m not paying 4 dollars for a 30 second clip of a song when I can take the version I already have, edit it in Quicktime for size and length, and copy it to my phone through Bluetooth. Take that Jamster!

  • Will:

    Some of us are trying to keep the dream alive. Check out some of the mockups:

  • LKM:

    Don’t confuse “what I want” with “what makes sense for Apple.”

  • Your point about the size of iPod/iTunes does not take into account the size of the mobile industry, to see what I mean look at these articles as they do a pretty thorough job of laying it all out. Be sure to read them thoroughly, esp. the comments section, this comment in particular

  • The Macalope discussed some of those items in the piece responding to Vic Keegan – particularly the “declining iPod sales”. That – to date – is simply a crap argument and anyone who uses it is either lazy or dishonest.

    Also, not to shoot the messenger, but the author is a former Nokia exec. It doesn’t mean his points aren’t valid – many of them are – it just means that he’s biased.

    He does, however, make a good point about the market outside the U.S. and the Macalope’s point about Apple’s weight may not have as much validity outside the U.S. Still, what’s he’s also shown is that the market is highly fragmented.

    The main argument the Macalope would raise against his “the iPod has lost” theory is that if you’re going to lump the iPod in with all manner of music phones, then really do it. Let’s look at it vendor by vendor. He says music cell phones outsell iPods by 6 to 1. If it’s all one big market, who owns it? Selling one out of seven – now – still means Apple has an established position in the market. The Macalope would ask – of all the players in the portable digital music player market that includes cell phones, who brings to the table what Apple does?

  • ajbezark:

    I also respect Mr. Pogue enormously, but I do think he’s missed the signs on this one. Apple has no choice but to release an iPhone, and the sooner the better.

    At Apple’s last quartly fiscal results conference call, one of the reporters asked about the phone rumors. And in a surprising move, the CFO (can’t remember his name right now) acknowledged the coming convergence of phones and music players, adding “and we’re not sitting around doing nothing.”

    For a company that’s as secretive as Apple, that’s as good as an official press release confirming that a phone is coming. Apple knows it has to deliver an iPhone ASAP, or they’ll be left behind. The iPod won’t die completely, but it’ll lose its leadership role without a phone in the mix.

    Don’t know if David P. forgot about that moment, but I consider it the most definitive evidence of an iPhone yet. Combined with the normally conservative Wall Street analysts who have cited reliable sources, I’m expecting the phone in early 2007.

  • To be clear I did not say I agreed with all the points in the article, what I presented was what I think to be some valid counter points to the hype that is Apple, iPod and this phone no one knows anything about.

    Some preface: I have a high end Nokia phone; it can play music, take decent photos, browse the web and lots of marketing crap, yadda yadda. However I still carry everywhere my 5G iPod in addition to my phone. The reasons are simple. My iPod does sync (music, podcasts, videos etc.) better than any of the horrendous stuff Nokia is turning out, and from experience Nokia turds are shinier than most turds on the market to date. I do use my iPod slightly from most because Macbook Pro is forever full and so my iPod is how I take a big slice of my music library around with me. I work in an environment where right now I probably have four 300€ + phones sat on a shelf, at work I have quite an assortment and I get to see shiny things often. However not one of them comes close, not even in the same league as the iPod + iTunes with regard to core functionality and delivering ‘the whole widget’. So to summarize, I use a whole bunch of Apple hardware, I use Nokia hardware but I prefer Apple hardware, and I prefer the user experience of Apple products.

    So onto your question. “Who brings to the table what Apple does?”, well lets see first lets look at what Apple brings. Well there is the killer brand and seamless end to end products. However that is all they have currently, I would love to base an argument on actual hardware but there is not any so lets stick with what we know.

    In a saturated market dominated and controlled by very greedy mobile operators Apple would come to the table with their big brand, some seamless end to end widget and the iTunes music store in tow with all what that means.

    Ok to a rational person that sounds great, but to a mobile operator that’s bad news. Companies like Vodafone want you to buy music via Vodafones music store, they want you to walk into a shop ask for a Vodafone mobile that will do ‘mp3s’, the shop will then hand them some phone with terrible software that does Play4sure wma’s which maybe only play on Vodafones phones or one phone or something equally retarded. They are fighting to not become ‘tubes’ like the cable and dsl operators are.

    In the above scenario what happens if you switch Vodafone for Apple? Yup you got the iPod universe. Apple want you to walk into an Apple store and buy an iPod which is the only way to play iTunes purchased media (the bastard child with Motorola not withstanding) which has worked very well in the US up to this point. Take careful note that it is all made and run by Apple, now how will Apple convince someone like Vodafone to sell closed hardware from one company that will not play nice with anyone else’s media stores (including the operators own), which once it became successful would give Apple leverage over the operators that they do not want to give to any hardware company. It simply makes no sense from the point of view of the operators, i.e. the people who actually sell most of the phones to the public. To be clear what I am saying is you have Apples brands potentially competing with a mobile operators brands and most likly they are mutually exclusive with regard to their DRM.

    Ironically its potentially what Apples potential competitors do not bring to the table that could be Apples biggest hurdle.

    Apple is in competition not just with Nokia et al. but with the mobile operators too.

  • V M Respectable:

    I’m going to start musing now. I’m not convinced yet that Apple is making a phone, but I don’t see anything stopping them. At least here in the US, Apple could probably do its own thing. Apple doesn’t really need the phone networks to sell its phones, since it has its own popular stores. It also doesn’t need their music stores, since it has its own music/video store, too.

    So what, then, does Apple need from the phone companies? I suppose some sort of agreement allowing Apple phones to use the networks. You (John Evans) probably know something more about that than I do, so you can clarify that bit.

    But on what basis would they deny Apple that? All the reasons I can think of would probably run into anti-trust problems. So how, precisely, does the fact that there are established phone company music stores and a diverse hardware market affect Apple? Apple can just keep doing what Apple does, and the discerning consumer can select an Apple phone separately from the service. Apple’s phone’s not working with competing stores would probably be a small hindrance in the face of the ability to load up the phone with anything from your existing CD collection.

  • Kordan Harvey:

    There’s also the possiblity that Apple will be an MNVO, in which case they could keep full control over their brand experience, billing, customer support, and added content, seperate from a big name wireless brand. Seems like the only thing Apple could do, really.

  • John –

    Do you know that they really want to be in the music sales business? The Macalope doesn’t have Vodafone’s internal numbers, but if their business model is what he expects it is (an please correct the Macalope if he’s wrong), they’re not making their real money off of music sales. Apple doesn’t make their real money off music sales. No, the cell phone companies make it off the contract – that sweet, sweet 2-year annuity.

    If the Macalope remembers correctly, Ahonen noted a case in Sweden where they’re selling songs for 8 cents a piece. They simply cannot be making money on that. It’s a giveaway to try to lock you into a contract.

    If you’re a carrier, the music business has to be a tremendous hassle – particularly if you operate in multiple countries. The Macalope would think they’d love to outsource this.

  • V M Respectable how can Apple sell its own phones without the operator? If the choice is between a contract where I get a free phone or a contract where I go and buy seperate hardware then I know where my money is going. Correct me if I am wrong but the overwhelming majority of phone purchases – higher end phones as I assume Apple will not be selling sub $100 phones right 🙂 – are done via contracts right?

    Kordan Harvey, they could but that is a big investment and a lot of overhead for a peice of unproven hardware is it not? This sounds like the most viable option to me but then this dooms the phone to being US only because I do not see Apple setting these networks up in every country they want to sell their phones in. Again the US mobile market is not that large comapred to other places around the world, however perhaps Apple is happy with this idea, perhaps they want to simply shape the emerging market in the US and no where else. That would be a fairly typical Apple move.

  • I do not have numbers either but I agree with the thesis they make their money from the contracts but this is precisely the issue, they know they are one step away from being just like the cable and dsl companies–and we know how much those companies dislike people using their ‘tubes’ for free.

    That is the thing, if your service is providing virtual wires and someone else provides the hardware then how does one continue to increase revenue so that one can stay competitive? Value added services are seen as the answer, things such as mobile TV and perhaps a media store. For the past several years all the operators I know are trying to find something, anything to get consumers to sign up for contracts with data services. In Finland they even changed laws to get more people into data services. Problem is people seem to, for some reason *cough because they are all shit*, not want these services.

    I would even argue that the whole mobile industry actually lacks a consumer market to some degree. Hardware companies make phones which are purchased in bulk by the operators making them the biggest buyers of their products. The operators then do all they can to entice and then tie you up in a contract not really caring about the two year gap in-between. What results is a market where consumers get to choose from what the operators and to a lesser degree the hardware companies want and not an ecosystem where consumers can take their wallet with them if they do not like something. How many people do you know unhappy with a phone or a contract but have to stick it out for another year?

    The best example I can give is MMS, MMS has been a big failure for a long time, its picked up of late but it never had to be that way. Email would have done the same thing but better. If we all have email accounts then what better than a service to push email to your phone. Yet instead what we saw was operators push hardware companies down a path that was wrong because email is an open system whereas MMS could be closed and allows operators to control the in and out points on the network to some degree, for example if I wanted to provide an MMS based service I have to go via an operator. Also look at video calls, operators and again to a lesser degree manufacturers really wanted some added value service so they pushed this upon us. However its useless no one does it and no one needs it, yet it is still there, being pushed. Both examples show how much the operators think that control is the answer to their long term financial security and both examples do not have consumers or common sense anywhere in the equation.

    Lets say Vodafone wants to outsource things like their media store do you think they will hand over the keys to Apple to do so? I see a good parallel between the operators and the movie/music/tv industry. The music industry got into bed with Apple on decent-ish terms and then when Apple was successful realised they had lost control. The movie industry has seen this and is trying to resist, to the point of going with things like Amazons hideous service. Cutting off your nose to spite your face comes to mind here. The operators see a similar path, on one side they can control the market on the other they perhaps get a compelling data service but loose some control. I would be surprised to see the operators embrace Apple like a long lost friend.

    However lets just put aside all of the operators motives and assume Vodafone pushed Apples phone and the iTunes store to sell music, movies tv shows perhaps ring tones and maybe even software. At that point very large companies like Nokia are not going to be happy and neither are any of the other manufactures because Apple is a closed ecosystem (like it or not its true, the alternative can be licensed at least). So will an operator decide to snub the other 7/8ths of the vendor market?

  • I honestly thing the only holdups are: 1) Apple negotiating being an MVNO (piggybacking on Cingular) or being Cingular exclusive. Either way it will be a SIM chip GSM type phone.

    2) I believe Apple is developing a new application for Windows – like an “iPhoto lite”. This will be able to edit,store, save photos on the phone & potentially iPods but also be a stand alone app on PCs and Macs.

    Another little hinderance to the release is whether or not to give “iPhoto Lite” away to both PC and Mac users.

    I think one way Apple is trying to get around this is by making the application “push thru bluetooth” where the app itself resides on the phone as some type of DRMed java app that can only be used on the phone or with a synced authorized computer.

    MVNO vs Carrier is the biggest hinderance as far as I can see though.

  • Billy K:

    I enjoy gettin’ wiggy with it when I hear about the iPhone.

  • FIXYOURTHINKING, ‘iPhoto Lite’ or the exact same sync via itunes we currently have which covers music, images, videos, games, contacts and calendars. In fact implementing ‘sync’ in both directions with a mobile phone and iTunes would instantly be better than anything else on the market. Your idea of this weird java app and bluetooth is not really viable, and why bluetooth exactly surly an iPhone has a dock connector.

  • iSync isn’t on PCs – iTunes doesn’t sync photos very well with my pictures on PCs, iTunes has no cropping, red eye, titling ability.

    The iPhone is almost assured to have a decent camera – it would be a shame to just allow syncing. I would think Apple would want to give people a complete experience just as they did with the iPod and iTunes. My Sony Ericsson phone has an on camera editting program that’s actually very nice.

    On the dock connector comment – get with the program – it should be wired AND wireless.

    Salling Clicker is a great example of “push” that I’m trying to convey.

    I would like to see Apple start to do programs like I suggested though – push to cross platform

  • iSync is not used on a Mac to sync with your iPod, Apple actually took all the iPod sync out of iSync and put it in iTunes. iTunes on a Mac syncs everything really well. Just because it does not work on a PC does not mean a phone would work any better.

    “Get with the program?”

    Have you ever used Bluetooth for anything? I have, I develop projects around technologies like bluetooth, in fact I just did a really large project that pushed Bluetooth to its technical limits, and trust me, Bluetooth sync of PIM data is one thing, bluetooth sync of media is quite another. Bluetooth sync of media would take FOREVER, we are talking real world throughput of USB 1.1 and below here. That does not say it would not be present, it actually has to be, its just that Apple have a lot invested in the dock connector and I will bet any iPhone has a dock connector and a dock so that it works just like an iPod. Why would Apple move backwards?

  • Kordan Harvey:

    Also, maybe I’m not indicative of the cellphone market at the moment but I would love to actually have my cellphone do LESS than it currently does. It’s bloat-ware. Personally if my phone was this size of a Nano and did nothing but be a really good phone I would be happy. I don’t know where this burning market for a music/camera/do-it-all cellphone is. I’m currently in University and I can tell you for sure that it’s not in my demographic, or I’ve been talking to the wrong people. I think the number one requirement for my age group would esthetics, then affordability, then MAYBE the ability to play music. I think you’d have to go pretty far down the list to get to 3.0MP camera or anything else like that.

  • I didn’t say the iPhone wouldn’t sync media through the dock, nor did I indicate it shouldn’t or wouldn’t have a dock connector.

    Real world sustained USB 2.0/Bluetooth 2.0/Cable Modem/DSL speeds are virtually the same. The quality of implementation on the devices are what control speed not really the standard.

    There is also a high likelyhood the iPhone will have Wifi. I’d rather have the option of low speed of wireless vs slightly higher speed of wired.

    You’ve picked picky points and fights throughout this thread. You’re arguning points no one has made issues about.

  • I develop projects around technologies like bluetooth …

    do share

  • I am not getting drawn into a discussion with someone who obviously is not willing to read up on the issues at hand e.g.

    Real world sustained USB 2.0/Bluetooth 2.0/Cable Modem/DSL speeds are virtually the same. The quality of implementation on the devices are what control speed not really the standard.

    Ummmm, USB 2.0 tops out around 400 mbit (480 in theory), bluetooth 2 edr tops out real world at 64 kb but in theory will do 3 mbit, cable and dsl top out around 24mbit (some cable is over 100mbit) I do not quite see how what you say is accurate, whilst the implementation does affect speed there is a big theoretical and real-world step-down from a DSL connection to bluetooth. Or are these facts to ‘picky’

    You’ve picked picky points and fights throughout this thread. You’re arguing points no one has made issues about.

    I am not picking fights, I have not said anything anyone has picked up as factually wrong, and I have not been aggressive or negative; the worst thing about me you have managed to say is that I am being ‘picky’. I am sorry you think I am, and if I have indeed been wrong or ‘picky’ I apologise. But take the time to read through the thread, I have responded directly to either, major points raised in the article, comments or to questions related to my responses in none of the cases have I argued about little things or picked a fight in my opinion. I do waffle a little about the operators and their approach to the industry but that is meant as contextualisation because a lot of people do not realise how much they control the market and also how dumb they all seem to be.

    My points have been mostly about how Apple cannot and will not simply walk into the mobile industry and be a ‘big’ player as was indicated by the Macalope. Apple is a big company, with strong brands, and excellent products that I use everyday; if there is a phone I will no doubt buy one (if it works outside the US) but its precisely the strong brand with hardware lock-in that could be a hurdle for Apple just as it appears to be a hurdle in the movie business. My other point which is related is that mobile operators are Apples competition not just Nokia, Sony et al, which makes the game hard as one needs many operators to be successful (or a really big global one which the US does not have – other than Tmobile I guess) . I am not and will not say Apple wont be successful I am just saying it is not all the sunshine and roses you might think so even if they could make this great phone I wonder how they will position it so they can redefine the market, which is always Apples ploy.

  • Sadly I cannot talk about my most of my commerical work because of a long list of Non Discolsure Agreements, I have contracts that mean I cannot even say who I work for, which is sadly all to typical in the mobile industry.

    I can say I currently work for a research institution in FInland where we explore user interaction and develop our own technologies and software systems to do so.

    On an unrelated note Nokia is a finnish company, they have their research building close to ours, which is not related in anyway.

    I once had a mobile operator approach myself and some colleges and they said that they would like to propose a project, but they could not tell us ANYTHING about it before hand. We would have had to sign a contract and an NDA before we could even know its name or what it was vaugly about. How messed up is that.

  • mmmm, USB 2.0 tops out around 400 mbit (480 in theory), bluetooth 2 edr tops out real world at 64 kb but in theory will do 3 mbit, cable and dsl top out around 24mbit (some cable is over 100mbit) I do not quite see how what you say is accurate, whilst the implementation does affect speed there is a big theoretical and real-world step-down from a DSL connection to bluetooth. Or are these facts to ‘picky’

    Real world results from USB 2.0 doesn’t approach max USB1.1 rates Real world DSL doesn’t get much faster than 768k on average, real world Bluetooth gets around I don’t know …. but it seems just as fast as the other two- and for your info – I get WAY faster than 64k from my bluetooth phone using Cingular.

  • HAHAHAHAHHA, your kidding me right

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