IMAGINE THIS made-for-TV moment:
An outsized individual-a Sumo wrestler, say-is about to perform the much-revered cannonball maneuver into the deep end of a swimming pool. A traditional cast of bon vivants garbed in linen suits and straw hats, ladies in polka-dot dresses with matching broad-brim hats and white gloves, are lounging poolside, sipping drinks garnished by tiny umbrellas, straining to look casual.
The poolside crowd looks up, nervously, as the sun is momentarily blotted from the sky.
The big guy lumbers to the end of the high board, jumps with an expression of maniacal glee and struggles to clasp his hands around his knees as gravity hurtles him towards the pool’s placid surface.
Freeze frame!
As anyone who has attempted some variant on this warped image knows, the aim of the exercise is to create the biggest splash possible, measured by the magnitude of the impact, its waves and-face it-how many bystanders get soaked. Yet the price can be high, depending on how perfectly the maneuver is executed: the results can range from the diver’s pure joy to a smarting backside and a whole lotta outraged bystanders.
That’s the theme of this Friday’s insanely hyped iPhone launch, by addled analogy.
Meanwhile, the impending launch and its extended gestation-the official announcement came more than six months ago-have raised lingering questions about Apple Inc.’s iPhone that Friday’s cannonball maneuver may resolve.
Gaining Gs
In the spirit of summer’s soaring temperatures, analyst Iain Gillott of iGR suggested that Apple might well pull the old “switcheroo” and deliver a device sporting 3G functionality-much the way the company’s recent announcement of extended battery life for the device eclipsed one of the market’s two biggest objections. Apple has said the iPhone will offer support for EDGE networks.
“Sprint and Verizon have spent six months touting 3G as their competitive advantage over the iPhone,” Gillott said. “These people at Apple are very smart. What if they announced a 2.5G product and delivered 3G? I’ve got to believe they can do it.”
“That’s funny,” said Will Strauss, principal at Forward Concepts, a semiconductor market research firm. “I’ve been thinking the exact same thing. It could be done. It just depends on whose chip is being used.”
Strauss said that the W-CDMA air interface offered by leading vendors has been approved by the Federal Communications Commission and long tested on AT&T Mobility’s network.
Strauss acknowledged the speculative nature of the conversation, but said that, conceivably, Infineon or Ericsson Mobile Platforms could provide Apple with W-CDMA chips and, in Ericsson’s case, HSDPA as well. Other vendors clearly are capable as well, though some have not shipped such products yet, creating unnecessary risk for Apple. Qualcomm could provide such chips, but the company’s licensing model and current legal and regulatory issues probably present too great a risk, Strauss said.
Selling the dive
Beyond the 3G issue, which Gillott and Strauss both forecast will likely be addressed in the iPhone’s second iteration-splashdown date unknown, but fourth quarter and the one after are frequently mentioned-Strauss said that the inevitable teardown analysis of the iPhone would fascinate him.
“Who got the baseband chip business with Apple?” he said. “Who’s doing the application processor? And who’s transceiver chip is in there?”
Strauss’ speculation ran the gamut of the chip industry’s players in EDGE and 3G chips. Whichever companies won Apple’s business in the first iPhone model will get a significant public relations boost and an incumbent’s advantage for involvement in future models, he said.
Gillott also pondered the bigger waves to be made if Apple used the iPhone to sell more Macintosh personal computers by making the iPhone function as a 3G modem for Macs.
“Apple loves those types of product link-ups,” Gillott said.
In a more buttoned-down vein, Gillott also questioned how Apple and its network operator partner, AT&T Mobility, will handle their markedly different interests in the retail environment. The device’s launch is certain to draw myriad analysts to observe whether AT&T Mobility’s teams are clearly trained or “incentivized” to promote the iPhone. It’s likely the device will simply fly off the shelves in an initial frenzy, the analyst said, but what pattern will become apparent, say, a month later?
(Media reports suggest that Apple has not made the device available to AT&T Mobility sales staff ahead of Friday’s launch to ensure secrecy for the device. Though Apple has insisted that there’s no secret list for early receipt of the device, media reports have Walter Mossberg, personal technology columnist for the Wall Street Journal, toting one before the occasional audience in past weeks.)
Warming the pool
Apparently, AT&T Mobility will stock their stores based on past uptake in leading iPod markets. (One would guess that means coastal metropolises with lots of well-heeled Yuppies.) The carrier apparently is also consulting local authorities in unidentified markets on crowd control concerns-a “problem” unlikely to last much past the weekend’s newscasts.
For carriers, of course, the sale of handsets is so much bait to sell service plans and AT&T Mobility has said that it will offer iPhone-specific plans to accommodate the device’s Web-browsing experience. What form those plans will take will become apparent Friday as well, Gillott said.
One potential weakness about the iPhone, based on its announced specifications, has been addressed prior to launch: speculation over the iPhone’s sealed-in battery and whether it will support heavy use of the device over the course of a presumably two-year service contract. That is, until Apple announced last week that the iPhone’s battery had been upgraded to accommodate the power-draining functions for which it is designed. (One blogger noted that the resulting spike in Apple’s stock price meant its market capitalization had suddenly increased by $2.6 billion.)
“Apple needs the iPhone to live up to the now ridiculous amount of hype the product has received,” wrote Avi Greengart, an analyst at Current Analysis, in a report last week. “The concern with all converged devices is that by watching video, browsing the Web or taking pictures, battery life for core voice (functions) is compromised. At the end of the day, an iPhone is still a phone used to make phone calls. Talk time and standby time are critically important.”
Rob Enderle, principal at The Enderle Group, said that the market’s reaction to the iPhone and its limitations will be tracked not just by analysts, of course, but by Apple, which must swiftly assess the device’s vulnerabilities as it readies the next iteration.
Among the iPhone’s “defects” is the touchscreen for all input needs, Enderle said.
“The touchscreen will be something to overcome,” he predicted.
Bill Morelli, analyst at IMS Research, said that the iPhone’s much-touted touchscreen-only approach puts the technology in the spotlight.
“The 12-key pad has a continued place in mobile technology because it’s inexpensive and users are deeply familiar with it,” Morelli said. “You can dial a phone in the dark.”
For his part, Gillott predicted a sell-out of all available iPhone units on Friday. Why? Every analyst’s livelihood depends on obtaining the device swiftly, he said, half in jest.
“I’ve got to buy one,” Gillott chortled. “I’ve got absolutely no choice. It’s my job!”
Unfreeze that frame!
Kersploosh!
