iPhone, just good enough

It is not really the Jesus phone, the iPhone is just another smartphone. It is not even the first smartphone (the way the iPod was the first high-capacity music player.) It is not different, just dressed up a bit.

The bottom line is that smartphones are compromised. The phone, email, music and internet functions are very different from one another. One small device doing all of them cannot be better than individual devices doing each of them. It is a fact of life.

With the iPhone, Apple has definitely produced the best, most fantastic smartphone ever. It is a beautiful and elegant piece of hardware with simple well designed software. But it is still a smartphone, a multifunction convergence device.

The question is: Will smartphones or multiple devices be the future? Only time will tell.

Short term, Apple addicts will gobble up every last iPhone that goes on sale this Friday at 6 pm. But will the iPhone dominate the telecom market the way the iPod has dominated the music market?

I doubt it. Why?

Because I believe consumers prefer "better." A convergence product like the iPhone can only offer up “good enough.”

RAZR is a "better" phone. BlackBerry is a "better" email device. Nintendo DS is a "better" game player. Garmin is a "better" mapping device. iPod is a "better" music device.

Some of these products even be could better if manufactures would stop trying to add more functions to the babies and just try to make them better, smaller and cooler. That is exactly the strategy that gave us the iPod.

My iPod shuffle needs to be tiny so I can run with it. My BlackBerry needs to be big enough so I can type comfortably. A little of one combined with a little of the other and you get a device that performs poorly at both functions. In other words, it gets trapped in the mushy middle.

The question is, will consumers be willing to compromise on battery life, size, price and easy of use in order to get an all-in-one device that doesn't perform better than the sum of its parts?

Sure, a few people will buy iPhones for the sake of convenience. Sure, a few people will buy iPhones because they are so in love with Apple that they would buy a bridge if Steve Jobs tried to sell it to them.

But the in long run, the vast majority of people will prefer their "better" individual devices. Especially companies wised up and created more divergence products.

Don't be fooled: Despite the hype, the deals and the massive advertising smart phones still only have around 10 percent of the market.

Opportunity comes from pulling things apart not putting them together. The devices of the future might plug together or network together, but they will all be individual “better” products.

Comments

[Laura]

My opinion on the iPhone is not simply because of one word convergence. It is a complex idea we have spent a lot of time researching. We have studied history and in general industries do not combine and all-in-one devices rarely succeed. The sacrifices necessary to produce an all-in-one are not acceptable to the majority of the market. A flying car is too heavy for the sky and too light for the road.

Other big companies have fallen down this convergence slippery slope. Microsoft with the Tablet PC and WebTV and Sony with PlayStation 3 (it's high price and delay was due to trying to make it a combination game and DVD player.)

Apple is also in danger of spreading itself too thin. Can Apple really keep with the hyper-competitive computer, music and telecom industries?

I am not the only person who questions the iPhone success by the way. There was an excellent New York cover story (iGod) and an article in the New York Times on June 30th "Spin goes Round and Round" among the many.

Only time will tell if Apple will revolutionize the cellphone market with its iPhone. I don’t think it will, but many people disagree. We will see. Just remember you can’t always believe the hype Segway, Webvan, eBooks, interactive TV, media center PCs, New Coke, flying cars and many other highly hyped ideas and products flopped.

I will return to other branding topics next week. Like why Tiger never made sense for the Buick brand.

Until then.

- Laura

[Jarrett Green]

Yikes. I'm afraid your books will be heading to the bottom shelves of my case after all of this. As the owner of a design firm, we are pretty big fans of all things mac. That is not however, why I'm blown away by all of your comments re: the iPhone. They seem so unfounded, so easily pigeonholed by yourself and the word "convergance". If I was a client of yours, I'd be feeling a little nervous about now - is she too quick to dismiss a good idea because she's lready made her mind up based on a single word?

Like the others, I would like to ask for a quantifiable, measurable way to assess if you were right in your predictions. If your going to go strong against something, might as well put it on the line.

I do have one prediction of my own, and one that can be measured. You will see a dip in blog readers from when your first rant started. Probably around 15-20%. For being a marketer it would seem you should know something about the marketer market - we love apple :)

[Erik Seiz]

If anyone thinks convergent mobile devices are failing, they should take a look at the Japanese market. Here, smart phones and smart services are a grass fire. Not because the Japanese are different, but because there is cooperation between carriers, banks, and manufacturers. We are starting to see the same thing in North America, and the result will be the same. No one wants to carry a separate iPod, credit card, phone, camera, and email pager. RIM sold 2.4 million BlackBerry devices in the last 3 months. It is the start of the convergence era. - Probably not a bad title for a new book...

[Justin]

Wow. I've ready the last few entries you've written and I'm surprised. I don't doubt your sincerity or ability to articulate your thoughts well. However, I'm surprised that the conclusion you've drawn is so removed from any experience or conclusion I could define. And that you have placed a tremendous amount of energy behind that conclusion.

I have many observations, but I'll distill them to two. First, I believe that you're claiming iPhone, as a convergent device, will fail solely on the basis that others have before them. Instead of comparing Apple to its own history or to the needs of the consumer, you've compared Apple to other smartphone creators and their respective limitations. Apple's success is neither because of, nor despite of the competition. Apple does not design any product by holding a ruler against the competition; they do it by measuring against the ingenuity they can produce themselves.

Second, I'm not convinced that you either use the products preemptively declared as failures or you appreciate the artistry that is part of research, development, and production. For the record, I purchase BMWs solely for the driving experience and I purchase Apple products for the user experience. They not only accomplish what I need, but they do so in a way that causes me to appreciate the effort and detail that went into their design. Assuming that random brand loyalty is driven more by inclusion in categories is a lazy argument because it is formulaic and repetitive without allowing for innovation. Apple isn't successful because of the iPod; they are successful because they employ really hard working, brilliant people who create products like the iPod.

[Scott Miller]

The iPhone will succeed only because it's a revolutionary phone. It's revolutionary because of the touch screen interface. The fact that it's also a camera and an iPod will be irrelevant to the phone's success, in exactly the same way that cameras, cell games, calendar features, etc. have been irrelevant to the success of other successful phones, like the RAZR.

I read research very recently showing that less than 5% of all consumers use their cell phones as music players. This feature is practically worthless for the general mass market of cell phone users. And it will be the same for iPhone buyers.

Again, the iPhone will succeed solely due to it's revolutionary interface. End of story.

[Paul]

Laura,

Although I have been a fan of the Ries legacy for a long time and read most of the books, you've missed the point here because you've misapplied convergence / divergence theory, and because Steve J. has used a deflection strategy to throw the pundits and reviewers off the real scent while he implements one of the largest disruptive innovations in history.

The iPhone is convergent only if you agree that a TV or a computer or a car is convergent. After all, a TV is a radio with a cathode ray tube added. Picture tubes and radios both exist as different products, so does glueing them together imply the product will fail because of convergence theory?

I think you should step back and question how you've labelled the iPhone, what category you think it fits in, and what distinguishes it as fulfilling unique needs for the customer. Or, another way of putting that is to ask "what jobs would a customer hire an iPhone to do that nothing else does equally well?". Consider that Jobs may have deliberately positioned the product in a category where he knows he can build initial momentum, and where the early adopters can understand what he's selling and be willing to pay the high price, but that the category may not accurately reflect what the product really is and why it will be successful.

I have deconstructed what's wrong with applying convergence / divergence theory in this case, and explained in detail why sales of this product will exceed even Steve Jobs' aspirations on my own blog at: http://thewaythingsare.typepad.com/antimarketer/2007/06/what-is-steve-j.html .

[Dan]

Also, I am calling you out Laura: Is iPhone at least going to be profitable? Or, will this much hyped product quietly disappear in a year or two?

[Dan]

Despite early reviews that the thing works and is easy to use, I am persuaded by Laura and Al that iPhone will be a relative flop because of technical/usability/compromise problems. But, I thought we were still talking categories? Won’t the iPhone fail mostly because it does not fit any category? iPhone is cool, convenient, multifunctional, advanced,etc,etc… but not marketed as anything in particular. And therefore can’t stick in “the mind of the consumer.” Unless smartphone is a category?

[Oluseyi]

I've casually looked through your last three posts since being linked to your prediction that the iPhone will fail. You're not an engineer (so your opinions on convergence are insufficiently rigid, from a design perspective), and you're not really a sociologist. You're a marketer, and your top product is you.

That's okay, really, but you've got to back off this thing. Convergence does work, when it's well done - and therein lies the rub. Nine times out of ten, convergence is hastily slapped together, so while your average smartphone can browse the web, display documents, send/read email and make phone calls, it can't do any of them particularly well, nor does it do any of them in particularly elegant fashion. Convergence has fallen victim to design failure.

(Incidentally, an excellent example of convergence is sitting right in front of you. The PC converges a wide variety of applications, and by relying on the same advantage the iPhone has - its completely reconfigurable user interface, per application - it does a pretty good job of it. Or you think a device on which you can write a letter, paint a picture and watch a video isn't convergent?)

Apple does great design. The iPhone isn't perfect - six taps to get to the phone function from sleep, because they didn't want to put a dedicated hard "phone" button on the device - but it is by all accounts pretty good. More importantly, and this seems to be the core contention that's escaping you, the iPhone is not a smartphone.

Let me repeat that: the iPhone is not a Smartphone.

Smartphones have always been designed around the supposed needs of business users. The iPhone is a consumer-oriented device. In the light of this audience target, its compromises make sense: a physical keyboard is unnecessary because the typical consumer only sends short text messages or emails, not lengthy multi-paragraph missives (keep your BlackBerry, corporate user!). It's most glaring flaws are actually phone related: the lack of a vibrate mode (so you absolutely have to silence your ringer and miss calls if you go to a theater) and the notion of a phone call as an "application" - but early adopters will forgive, and future revisions (to both software and hardware) may correct.

Further, the notions that the iPhone is pushing are not novel - and I'm not talking about "convergence," which is an irrelevant buzzword here. I'm talking about usability, the matching of a device's form to the functions that interest *you*. The Helio Ocean adopted a double-slide form factor to address the orthogonal intense internet connectivity and phone-first input needs. The older Sony Ericsson P series devices had the numeric keypad fold out to reveal a touchscreen for data entry. There's a long history of devices trying to solve these challenges with varying degrees of minor success, but what sets the iPhone apart is the recent viability of *multiple* touch sensitivity, allowing for complex yet intuitive gestures. Despite all the different things that it does, the multitouch surface gives the iPhone greater flexibility than any device before it to offer an appropriate UI for each function - and that's why your convergence/divergence schism is irrelevant. It's not divergence that consumers want; it's activity-appropriate, familiar, intuitive user interfaces. T9 is a pain. Scrolling a webpage down by pressing '8', or even rolling a scrollwheel/trackball (to select every link on the way) is less than ideal. Your lack of solid engineering knowledge about ergonomics, human factors and interface design undermines your assertions.

There are so many things right about the iPhone that you're missing, from the fact that it syncs via iTunes, which many users already have installed, and which even those who don't have installed don't fear (tell me you really like Blackberry Desktop Manager - I dare you!) to the fact that it finally, FINALLY relieves you of having to memorize the keys to save ('9'?) and delete ('7'?) voicemail, to the fact that it shows you who voicemail is from without having to listen to it, and that you can listen to messages in any order.

The real reason why the iPhone might fail is because it's tied to AT&T, which has a pretty poor network and an even poorer reputation for customer service and billing practices.

[greg gillispie]

Damn, John Moore asked the same question I was! I need to get up earlier or stay up later.

[David Nieporent]

Your thoughts about convergence make sense in the abstract -- but there plenty of examples of convergence that work. The key is to have a reason for the convergence, rather than gluing two things together just for the heck of it. In the case of an iPhone, the reason is that people don't like carrying around a phone, pda, ipod, and camera.

[Sam]

What are the metrics (units sold, returns, # of companies adopting, etc) should we be watching for on the iPhone over the next year or two, and what do they look like for success and failure? You've been pretty adamant that it will fail, but you haven't been very specific on how that looks or what success looks if your prediction is wrong.

On the convergence/divergence piece:

"It’s a superbly engineered, cleverly designed and imaginatively implemented approach to a problem that no one has cracked to date: merging a phone handset, an Internet navigator and a media player in a package where every component shines, and the features are welcoming rather than foreboding. The iPhone is the rare convergence device where things actually converge." - Steven Levy: Newsweek.

I still haven't gotten my hands on it, but the above review emphasizes the point in my earlier comments stating that convergence, when actually done right, is powerful. There will be some tweeking, but the iPhone maybe that rare landscape altering convergence product.

[Frank W]

Laura, what's with all the bile? "I'm sick of talking" about the iPhone, you say. Yeah, right. So stop posting. But wait, I get it. You're posting to plug your divergence gospel in your books, to plug your TV appearances (where you'll no doubt preach the same message and plug the books). But your arguments are paper-thin and ill-informed.

You said:
"RAZR is a "better" phone. BlackBerry is a "better" email device. Nintendo DS is a "better" game player. Garmin is a "better" mapping device. iPod is a "better" music device."

But what defines "better"? RAZR is better in its form factor, its OS and usability is a dog. BlackBerry is better for email cos it supports PUSH and has a Qwerty keypad, its OS is also a dog. The DS is arguably not a better handheld game player than the PSP, but it has a wider range of more "fun" games; the experience is "better".

Isn't it "better" to have a phone with an interface that is enjoyable and not frustrating, with a handful of features that most people want (calling, texting, email, web browsing) and do that a magnitude better in terms of performance and presentation and usability.

You said:
"A little of one combined with a little of the other and you get a device that performs poorly at both functions. In other words, it gets trapped in the mushy middle."

So only devices that specialize truly succeed? Guess they shouldn't have added texting/cameras/mp3 to cellphones, or video to the iPod should they? See how much of a failure those have been. And it's only you who thinks the iPhone performs poorly at all its functions. I guess you'd know cos you've used one, right?

You said:
"The question is, will consumers be willing to compromise on battery life, size, price and easy of use in order to get an all-in-one device that doesn't perform better than the sum of its parts?"

For an author you don't seem to care much for research. Apple have already announced - and the first public reviews have confirmed - that the battery life in this thing is way beyond normal for a device of its kind. Sizewise it's a tad bigger than your average candybar phone but it's much slimmer. Easy-of-use (sic): the USP of the iPhone is to be 100x easier to use than any other phone out there - not to cram in gazillions of features that only a few people use, but like the iPod to do things simply and easily. The only area you are right on is price. It is expensive, but not everyone wants cheap no-name Far East electronics - many will pay a bit more for a Sony product, for example, because they trust the brand and the build quality. Apple products likewise.

But I don't need to tell you about brand loyalty, or building market share based on reputation, do I? You write books about that.

[Georg Christoph Kaindl]

How about pushing this convergence/divergence argument aside for a second and thinking "scenario" instead. This is incidentally also what Apple is encouraging through their ads, especially if you take a look at the "Calamari" one.

Playing through the "Calamari" scenario with your divergence paradigm in mind, it would be something like this: User is watching "Pirates of the Caribbean" on their dedicated video player, now they suddenly crave seafood. They put down the video player and yank out their dedicated portable internet device to look up some nearby restaurants. Once they've found one, they switch to their phone and call the place to make a reservation. Finally, let's get out the Garmin GPS mapping device to find the quickest route. Maybe get out the internet device again now to check traffic conditions. Not only would the user need to carry a gigantic bag with them just to store all the individual gadget, but the scenario suddenly appears to be so far-fetched: This would *never* happen.

Now with the iPhone, this scenario makes perfect sense. Just watch the ad: It takes the user 4 (four) taps before the reservation call is made and the scenario is concluded (not counting the typing into Google Maps). This is ingenious. In fact, people *will* use it this way.

One thing I've always loved about Apple is that they always think "scenario". Just have a look at the apps bundled with any new Mac: iPhoto, Mail, Safari, iMovie etc. They are the answers to the question "What does a user actually want to *do* with the computer?". Up until Vista, Microsoft didn't include a single piece of useful software with Windows. You got a bare bones operating system. You take the computer out of the box and start it. Apple thought about what you want to do next, though.

The iPod wasn't engineered to be "the best music player for everyone" either. Remember, the first iPod generations were Mac-only. Why? Because they were created from a scenario: Now you've got all these music files on your Mac. You probably want to organize them, oh, and you probably want to listen to them on the go. You want all this to happen seamlessly. Boom. iTunes and iPod. Only because this worked so well (i.e. the scenario was though out so well), they decided to support Windows, too, opening an even bigger market.

There are gazillions of other mp3 players out there that have a similar feature set as iPods. They don't take off, though. Why? Because the iPod is designed by scenario, not feature set. By your logic, any device with the same feature set would be equivalent from a user's perspective.

Another example: By your logic, the addition of SMS functionality to cellphones must have made them worse. People should have both a pager and phone instead Wrong. They were a huge success! Why? Scenario. Oh, I can't talk right now because I'm sitting in this presentation, but I need to tell my friend to bring over pizza later. SMS sent, problem solved, scenario concluded.

Sure, there are a thousand reasons why the iPhone may fail. But even if it does, you cannot just say "it is because it's a convergence device". After all, users of the iPhone (or any other device, for that matter) give a damn about such theoretical considerations. What matters to them is the user experience i.e. the scenario.

[Laura Ries]

Thanks Henk! I agree, I am sick of talking about, reading about and seeing iPhone ads too. But it is all anyone wants to talk about these days. I'll be on TV three times in a week talking about the thing. I am sorry for overdoing it, I just wanted to be sure to put my opinion on the record.

After Friday, hopefully we can all go on with our lives. I promise next week, no iPhone talk.

And John, I would get one and expense it, but no way am I waiting in line. It is not worth it.

[henk]

Dear Laura. I do love the origin of brands blog and I read your books. I've even written (unfortunately in Dutch) about them on my blog. And I am using the insights on a daily basis. This is a fan speaking.
But I just think that 3 consecutive posts with the same iPhone bashing message is about enough. The point is made. Can we now just wait and see if you are right or wrong. We don't want people starting to think that the origin ... is paid by any Apple competitor, don't we. Oh, and what if the iPhone is nog about convergence, but about divergence: the ultra-compact portable computer ?

[johnmoore (from Brand Autopsy)]

Laura ... will you be getting an iPhone? You must. Why? Because your strong take would be bolstered from first-hand experience using the device.

Just expense it as "field research."