Why the iPhone will be a smash hit
Okay, I don't post here anymore, but I had to go ahead and run this one. It was poorly written late at night and not edited, but I think it gets the point across. Share and enjoy.
What's interesting about the impending release of the iPhone is that it is tracking in several different ways. An interesting comment on seekingalpha.com mentioned that the iPhone won't do so well because the mobile phone market is split into two markets: the "cheap" phone market for individual users and the "smart" market for enterprise users.
What this user fails to recognize is the convergence in the two areas lead in the past few years by Blackberry Pearl and Sidekick. The truth is, individual users in the US are beginning to expect more than basic telephony from their cellphones - they want it to be a media and entertainment device as well. This is where the iPhone emerges as a key player.
Like most analysts are expecting, it will certainly be a top-selling device for businesses looking to ditch unsightly, harder to use smart phones currently populating the enterprise arena. The iPhone will replace the e-mail and voice services currently offered by Treo and Blackberry models and add full web functionality (thanks to OS X's Safari) not currently offered by competitors. It will also add visual voicemail - an underrated feature that will increase productivity by allowing workers to screen voicemail and skip right to the most important ones. Moreover, rumors that the iPhone will utilize Leopard's new iCal-server to attract enterprise users are now surfacing. All of this will lead to unprecedented mobile productivity at the same cost as existing solutions.
But what analysts are failing to recognize is the iPhone relevance as a device for students. Many current cellphone users in the younger age demographics already pay $300 for an iPod, $149 for a PSP or Nintendo DS and $150-200 for a Sidekick or similar cellphone device. Especially as Apple opens up the built-in OS X architecture to software developers to make gaming an option on the device, parents will be willing to pay the iPhone's hefty price to combine all of these features. By only releasing iPhones with 8gb in maximum storage capacity, many users will still decide that their "digital life" also requires an iPod with more room for increasingly data-heavy media files, ensuring that Apple's dominance in the mobile player market will continue.
Experts are also not picking up on two more iPhone trends. First, the iPhone is tracking nicely as the next phone purchase for many average phone subscribers looking to switch companies or upgrade their plans. It's no secret that Americans are dissatisfied with almost all available wireless services. Therefore the allure of the iPhone is making borderline users who are thinking about switching carriers (and having to buy new phones anyways) more likely to do so pending the iPhone release. This not only means a huge jump in marketshare for Cingular, it means Apple is set to open a brand new market for itself - the market for dissatisfied customers of other carriers who haven't previously seen enough of a difference in other wireless providers to switch. Therefore the exclusivity contract with Cingular could actually help, not hinder Apple.
Finally, the iPhone will reverse the trend the iPod started when Apple opened them up to Windows users. It's well known that iPod sales have increased sales of Macintosh, Apple's computer line, because of customer satisfaction with the iPod. Certainly, the iPhone will have this effect among new users who like the interface. However, the iPhone is also looking like a must-have product for current Mac users who are frustrated with their current mobile phones and want the "Mac experience" they enjoy at home in their mobile lives. This is especially true of the increasing number of recent converts who have made the "switch" from Windows to Mac. Coming from a frustrating Windows environment, these users see the iPhone as another way to decrease the technology stress in their lives that has been taken care of at home by the same company, Apple Inc.
All of this makes the iPhone nothing short of a sure lock to sell 10 million units or more in its first year, on target with Apple's initial goals.
Labels: apple, cellphone, computers, internet, iphone, ipod, microsoft, technology, wireless, zune