by Playfuls Staff |
12th January 2007
“A widescreen video iPod, a phone and an advanced internet communicating device”- this is how Steven Jobs described the long expected phone from Apple. What impact will it have on the company’s most popular product?[more]
I remember that when Apple’s co-founder began his presentation of the iPhone, he mentioned first the widescreen video iPod, just like in the beginning of this article. But the announcement didn’t get so many cheers as the one about the craved and much rumored iPhone, despite the fact that the pre-Macworld 2007 rumor mill included the widescreen video iPod among the possible presentations.
I will not insist on whether Apple should have pleased its fans with more products at this year’s Macworld. Steve Jobs already did the trick with comprising three expected products in just one, and the idea that Apple enters the mobile world is revolutionary enough (not to mention the Apple Computer- Apple Inc. switch).
What I’m interested in is how will Apple’s phone impact on other products of the company, especially the iPod. We all know that Apple’s tight grip on the digital music is determined by iPod’s ubiquitous presence on the market. We are talking now about Apple and the rest of the world in the MP3 player domain. But now we have a new type of iPod coming, which integrates a lot more than we had expected from a larger screen video iPod (touch screen, Wi Fi, motion sensor) and which can also browse the Web and make phone calls. Does that mean that the fabrication of the traditional iPod will be discontinued?
Think of it this way: by July 2007, we shall have on the stores’ shelves two types of products, from the same company, which basically have the same functions, except one of them is much more advanced and integrates newer technologies, but costs at least $500. They both play music, which is extremely important. But while the iPod can store more songs (we don’t know yet if iPhone’s 4/8 GB internal storage capacity is expandable), it cannot make phone calls, it doesn’t have the iPhone’s touch-sensitive widescreen and does not browse the Web.
So usual clients and Apple fans alike will have two choices: either buy a cheaper classical iPod that mainly plays music and on top of that displays some photos and short videos, or buy the new and more expensive iPod gadget, which indeed has some cool features (at least from what we’ve seen, but Jobs declared that until June further enhancements will be added).
Since at CES 2007 MS’s chairman spoke about seamless integration of portable and static devices, we should also consider how the iPhone will integrate with the iPod itself (if it doesn’t kill it of course). Will the classical iPod become an add-on for iPhone (taking into consideration that the iPhone will not be endowed with expandable flash memory)? You store on you iPhone’s memory the web-pages, e-mails and voice-mails that you have and then plug-in your iPod to listen to music or watch a video? That would somehow be odd and would certainly undermine iPhone’s status among competitors.
The iPhone case also reminds me of another dilemma that Gillette once encountered. The second edition of Mach shaving machine was so successful that the Mach 3 edition (much more advanced of course) literally remained unsold in various parts of the world, due to its predecessor’s popularity.
Although I do not expect Apple’s phone to remain unsold because of the iPod, I do expect the iPod to lose ground because of the iPhone. Apple is clearly intending to make the latter the only device we take with us when we leave home. It will probably even replace the iPod in the Nike+iPod Sports Kit (doesn’t the Nike+iPhone Sports Kit sound more interesting?). The iPhone’s advanced interface and functions will certainly be more appealing to many customers in the digital era, since they will be able to do a lot more with Apple’s phone than with the MP3 player. The iPhone will allow them to stay in touch with the world, while in the in same time listening to their favorite track or voice e-mail- a thing they won’t be able to do with the iPod.
Think of the future too. What possible upgrades can be added to the iPod to still make it competitive for end-users in comparison with the iPhone? A bigger screen (which the iPhone already has; Zune has it too, but it hasn’t helped…), a bigger storage capacity (8G are enough for many customers, but what if iPhone gets even more?) or a price downgrade? If Apple upgrades their gadget, that means additional costs, so bye-bye price drop. If they choose not to upgrade it, but make it cheaper, the iPod might have a chance for a few months, until Apple’s rivals launch something new.
So, to resume, the iPod will face two strong competitors: the rivals on the MP3 player market and the iPhone. Sure, you can say that the iPhone faces strong competition too, from Nokia, Samsung or Sony-Ericsson. But the idea is that iPhone is playing on two major markets (the MP3 and the mobile communications- although phones that are also MP3 players are numerous). On one market Apple dominates tyrannically, on the other it’s just a beginner. So better chances of success are seen on the MP3 player market, rather than the phone market, with the risk of damaging iPod’s popularity.
