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March 2007

Comments

LeOgAhEr

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Lee Barrett

It seems to me that convergence and miniturization of quality are inevitable and on-going. If the major complaints about the iPhone are that its phone is only fair and its camers is only 3mpics, these are just "techology details" that can and will be solved. Remember the quality of "top of the line" cell phones 5 yrs ago. Remember how recently in the past 3mg pics was the best digital camera you could buy. Regarding convergence, miniaturization, and performance quality, what you can imagine is what will happen. The first iPhone may rate only 1 or 2 stars in several features, but wait until apple brings out iPhone versions 4, 5, and 6 (or a competitor leapfrogs over them) .. in 1 year 3 years, 5 years, or whenever. The direction is inevitable; its only a question of how long it will take to get there.

Scott Miller

I think the real mistake is that the name, iPhone, is too generic. iPod, by comparison, is a unique name and non-generic. It's too bad Apple didn't think of a more unique name for this breakthrough device. A real marketing blunder.

Tom Frazier

Add me to the 'basically disagree' camp. I agree that convergence only works with swiss army knives and clock radios... but I don't see the iPhone as a convergent device. The computing trend is that things get smaller and more portable. There is plenty of evidence for this divergence in the computer tree (iPod, Sony PSP, laptops, etc). The thing to note here is that almost all new computing devices get smaller and/or more portable. How many people choose to buy new desktop computers? Almost nobody I know.

Here is the reason for my disagreement. The iPhone to me doesn't represent a convergent phone, music, web, whatever device. It is the device that will truly occupy the mind as the next generation of computing.

I can easily see Internet kiosks soon only supplying screens and power cords that connect to your iPhone style device. Companies around the globe can issue you a mobile phone and expect it to be your primary computing device. Obviously those ideas are still a few years away but they are within reach. Even now I do as much or more work on my blackberry as I do my laptop and it doesn't come close to the same functionality as claimed by the iPhone. Software is again diverging (from server/terminal to client/server to software-as-a-service) and is becoming a rich data feed to a web browser.

Computing diverges somewhat evenly; meaning, software evolves at a rate equal +/- that of hardware. Nobody is going to develop really sophisticated software for hardware that doesn't exist and vice versa. The iPhone and devices to come will valide the SaaS model more than anything before it.

Laura Ries

Most people carry multiple devices and most people dream about being able to only carry one.

But dreams are different from reality. In reality, one device cannot do it all. In fact, the phone, wireless email and music players will each evolve becoming more different making convergence impossible.

Look at the computer and television. Many thought these would natually converge so that every home would have one device. Not so. I still have a TV and a computer. Don't you?

Instead televisions have become huge, giant sized devices with HD and other features. And computers have become smaller with the majority of units sold being laptops.

The same will happen with phones. Cellphones will become smaller. BlackBerrys might even become bigger (It would be easier to type and read on.) And music players will come in two varieties. The travel iPod and the home iPod. I have both a shuffle and a Nano myself. Running with my Nano now feels like I have a desktop computer strapped to my arm.

Apple's ability to generate PR will no doubt attract many Apple fans and early adopters to purchase an iPhone, I suspect this would describe many who have commented here.

But I stand by my prediction that the iPhone will not be a long-term success. What we will see instead is further divergence not convergence. Remember Apple's brilliant iPod is a divergence device.

Bradley Spitzer

I have to disagree with your Laura. While Apple has the 'cool' factor in its favor, I believe the iPhone will succeed because of its ease of use.

When my Windows colleagues ask me why I am committed to Apple products, my easy answer is that I don't have the same problems they do. It rarely crashes, the whole system works together and, to boot, the interface is stellar.

PDA/mobile phone users want something that works flawlessly in their hands and can share info/documents/media with their computer. The iPhone is the first phone to seamlessly provide that experience.

Ed

I disagree. I usually carry my cell, an iPod (or two) and my digital recorder. With my video iPod I listen to music/podcasts, sync my calendar, watch TV shows and home videos I create and other videos I share with the family. I would love to use just one device for these features plus what I do with my cell (email, text msg, calls, info search) and recorder. I will get that with the iPhone. I'm sure there are plenty of people who are looking for the same.

The Hotz(e)

Isn't the computer a convergence product? I check my email, do spreadsheets on Excel, write documents on Word, store my iTunes songs, download and edit my digital photos.....I use it for a multitude of reasons. Why is it hard to believe that the iPhone could do the same?

On both business and personal trips I carry my phone, laptop, camera and iPod. It is a bit of an annoyance to have all four of these....plus all the different accessories (chargers) that you have to lug around as well. If you could roll this all into one, I would be pretty pleased.

HOwever, I am not going to purchase this thing if the camera is 3 megapixels and can only hold 500 songs. I would wait for a later model that is better.

That's just my spin on it.

The Hotz(e)

David McElroy

I suspect that the iPhone will succeed, but if it does, it won't be because it's a "convergence device." It will succeed because it's a great phone. If Apple introduces other phones at lower price points, I think the company will have a good chance of taking a substantial chunk of the handset market.

With the RAZR that I currently use, I have a camera and a buit-in music player. I'll occasionally use the camera, but I use a REAL camera when I care about a picture. And the fact that the phone can play MP3s is simply a novelty. I've never used it and never will. It also has a calendar, calculator and crude Internet access. My point is that the RAZR is even more of a "convergence device" than the iPhone is, if you judge it by what it's apparently capable of doing. The same is true for most phones today. It's even more true of so-called smart phones. But today's successful phones are successful for reasons OTHER than their multiple uses. For instance, the RAZR became popular because it was a sleek and "cool" PHONE, not because of all the other features.

I believe the same thing will be true with the iPhone. It's going to be a successful PHONE that also happens to have the capability to access the Internet and play music. I'll still use my MacBook when I want to access the Internet on the go. I'll still use my 60 GB iPod when I want to access my music. I'll probably use the ancillary functions at times, but it will still primarily be a PHONE.

The iPhone line will succeed, IMO, but it will be successful DESPITE its other functions, not because of them. The people who will see this as success of a convergence device will be fooling themselves about what it means for other products.

Scott Miller

I suspect that the iPhone will succeed. While I fully agree that convergence is a path to failure, there is a exception to the general rule: Overwhelming convenience. This is why cars have radios and TVs now. And most cell phones have a camera.

Here's the thing: I'd short Apple stock now, except that I'm confident that Jobs will ensure that the converged components within the iPhone are all top-of-the-line, such as the music player. A key reason people do not buy converged products is that, almost without exception, converged products are inferior to specialty products. But, I think that Apple's iPhone will have top-notch converged components, taking away that particular downfall of most converged products.

And then the convenience factor comes into play, and that's why I think the iPhone is one of those super rare exceptions that actually succeeds.

Laura Ries

Thanks Tim. I would never underestimate Apple. I grew up an Apple kid. I came of age with the brand and learned computers on an Apple II. I have seen the many ups and downs of the Apple brand over the years. A diehard Apple lover I gave up on the computer brand in 1996.

Recently Apple is on a huge upswing, mainly because of the cool factor halo of the iPod brand's success. iPod a focused, divergence product and brought new attention and respect to the company. I like many others gladly jumped back with Apple and I personally own several iPods.

The iPod's success has meant that in the computer market, Apple's share has gone from 3% to 5%. Big improvement, but we are still talking a tiny percentage of the PC market. Let's not overestimate the success Apple has in computers.

What we have seen before is Apple during an uptime, trying to leverage it's coolness and PR savy to launch a convergence device. Remember the Newton? Well I do. It was suppose to do everything! Well it tried to do everything but ended up doing nothing too well. After a big launch and lots of PR the brand quickly died. While the simple Palm took off.

I believe the iPhone is likely doomed to the same fate. Some will initially sell, but it will never live up to the hype. Ditto for Apple TV.

Tim

I disagree. I've been reading the Ries books since Ries and Trout were writing together, and generally I subscribe to the Ries school of thought on branding. But I think you're way off on the iPhone. I think you mis-understand the appeal of the iPhone and the power of their brand. What Apple has demonstrated over and over again, is that they are able to build a healthy following based on their brand - its the cool factor. Its not about convergence. They provide a great user experience and manage to sweep just enough people off their feet to craft their brand, and then the brand carries the product sales.

But why argue about speculation. Let's all see where things are 18 months from product release.

yasser brohi

I agree with Laura. The initial response will be more than impressive; however, once the wind runs out of the sails, the only long lasting impact the iphone will have had, is to bring stylus-less touch screen navigation to the cell phone. Having said that, kudos to Steve Jobs. Apple should start touting themselves as a 'better design' better products'company, to help solidify their crossover presence across all markets.

JohnB

You'd think more executives would catch on.

Even with the Swiss Army knife, I don't think anyone has ever used it as their primary screw driver, bottle opener (imagine pulling it out at a party and opening a wine bottle with it), scissors (has anyone ever cut ribbon or christmas paper with it). Most people have a whole drawer full of scissors, corkscrews, etc. Maybe if you're going backpacking you'll use it, but it's more of a novelty than anything.

I've never heard anyone get excited about convergence, it just isn't that big of a deal for most people.

Mack Collier

Laura if you haven't already, you should contact the WSJ reporter about his article. I'm sure he would be elated at the chance to interview you for a follow-up piece.

Marc Sirkin

Thanks for posting about this - the entire time I was reading the article i was thinking about you and what you were thinking as you were reading it!

I have no idea what will happen, but I'm guessing that it's simply not a cross over product for the masses. I'm not getting one myself. I just simply can't bring myself to deal with itunes DRM.

Laura Ries

I do agree that initially Apple will sell quite a few iPhones mainly because of Steve Job's brilliant job with the PR.

But shortly after the launch the initial hype will wear off and Steve will move on to the next project at Apple. Then the iPhone will end up in the convergence scrap heap along with the ROKR, N-Gage, WebTv and many others.

Initially convergence products, like line extensions get attention and generate early sales. But long terms they fail and undermine the brand.

Jean Biri

I have no doubts that the iPhone will sell like crazy at first and get even more publicity. In the long-run however, I agree that it will not become a category leader by reaching numbers that the RAZR achieved for instance.

I for one will probably purchase the iPhone for its convenience factor because the idea of having an MP3 player, phone, PDA and Blackberry all at once does not appeal to me. I would rather use one piece of hardware even if it does all the functions in a so-so manner.

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By Al & Laura Ries

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