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SHIFT: Why the iPhone will succeed, at any price
The press loves to talk about Apple. The cynics chalk it up to Steve Jobs's public relations savvy, while some journalists might counter that Apple products are unique, influential and iconic. With the iPod, Apple swept through and dominated the portable music player market. Now it's threatening to do the same with cell phones.
Mobile-phone makers are probably grumbling to themselves, "We have some great multifunctional products out there, too — and they're easier to use than ever! Why doesn't anyone pay attention to us?" Well, the easiest way to get the media's attention (and the consumer's) is to stop diluting your best models with 20-plus other mediocre models. In order to compete against Apple, electronics companies should start by throwing many of their existing products out the window. Click below for the full plan.
Why would a user want to choose between 39 Motorola phones when he knows he can, for a premium, pick up the iPhone and be assured of getting a well-designed, attractive, and high-quality product (assuming, of course, that the iPhone turns out to be all of those things)? Cell-phone manufacturers need to start making fewer phones, not more, if they want to compete with the new kid on the block.
Imagine what would happen if Motorola decided that its next phone — let's call it the LAZR — were to be its only phone. The basic LAZR would be a quality affair priced at $250, but for $450 you could get a tricked-out version that had all of the texting, e-mailing, Web-browsing, and music-playing features that a user could want. And for the grandparents, there would be a LAZRlite: a stripped-down, very simple $79 version of the product that could only make phone calls and accept voicemail.
Does this pricing model sound familiar? These three versions of the phones would be it. Motorola would cut everything else out of its line and put together some great advertising campaigns. Provided that the phone was better than the RAZR, the popular question would change from, "Are you getting an iPhone or some other model?" to, "Which kind of customer are you — Apple or Motorola?"
Canon has two lines of digital cameras: EOS SLRS and PowerShot digital cameras. I'm actually in the market for a digital camera, and Canon has a good reputation as brands go. But the PowerShot line has 23 cameras! Two of the highest-end models couldn't be more different: One is a 6-megapixel camera with a 12x zoom (the S3 IS), while the other is a 10-MP model with a 6x zoom (the G7). Other choices in the line are nearly indistinguishable: compare the SD750. The average consumer would have to do a lot of research in order to know he'd bought the right camera. It's no wonder that after only four months on the market, some of the company's newer cameras are already being sold at a 40% discount.
What about a single laptop that's good for every personality, a specific camera that will suit every possible individual need? What Apple's done is to ask: Just how different are consumers' needs? There will always be companies out there making niche products, but those are not the companies that capture the popular imagination. And what about the concern that consumers don't want to be sitting on the subway next to someone with the same gadget? Well, the iPod blew that notion away. The cool kids have decreed individuality overrated. Manufacturers should stop being such squares.
By murcielago05 at 7:40 PM ON 04/27/07
I agree that the cell market is very diluted...but I wouldn't completely shift, just to copy apple.
The Apple iphone wont do well...at all.
By nuttyalien at 9:59 PM ON 04/27/07
nope its not gonna do well at all it doesnt have 3g and its going to be really hard to navigate thru since its touch screen.
By w00d3y at 7:01 PM ON 04/30/07
First of all, the iPhone is going to sell like crazy, not because it does anything that any other phone doesn't do, because honestly there are more feature complete phones, but because it's an iPod and there hasn't been a poorly selling iPod yet.
Secondly the argument that Apple will succeed because they're producing just one iPhone should sound familiar to any long time Mac head. When Steve Jobs came back to Apple, the company was selling so many different kinds of Macs and PowerBooks that it was a serious headache trying to keep them straight. There were multiple versions of Macintosh, Quadra, Centris, Performas and PowerBooks. Worse yet, many of them were essentially the same box with little difference except the model name and the price point. Jobs realized that that was a failing strategy and slashed the product line into a simple four part grid: iMac for the home, Power Mac for pros, iBook for consumer laptops and PowerBook for pro laptops. Today, after the company's dramatic rebound, the grid is little changed: iMac for the home, Mac Pro for professionals, iBook for consumer laptops and MacBook Pro for pro laptops. They've added the XServe for enterprise and the Mac mini for the low-end entry market. Simple and each targeted to a specific market section. If you know what you're doing, sure you can get more bang for your buck from Dell but most users either aren't that savvy or don't want to agonize that much over something they're going to use for email and web browsing.
For consumers, having 30 choices that offer incremental differences between products isn't really any better than having just one. Apple figured that out to great success. Hopefully more companies will figure that out as well.
Great article!
By w00d3y at 7:01 PM ON 04/30/07
First of all, the iPhone is going to sell like crazy, not because it does anything that any other phone doesn't do, because honestly there are more feature complete phones, but because it's an iPod and there hasn't been a poorly selling iPod yet.
Secondly the argument that Apple will succeed because they're producing just one iPhone should sound familiar to any long time Mac head. When Steve Jobs came back to Apple, the company was selling so many different kinds of Macs and PowerBooks that it was a serious headache trying to keep them straight. There were multiple versions of Macintosh, Quadra, Centris, Performas and PowerBooks. Worse yet, many of them were essentially the same box with little difference except the model name and the price point. Jobs realized that that was a failing strategy and slashed the product line into a simple four part grid: iMac for the home, Power Mac for pros, iBook for consumer laptops and PowerBook for pro laptops. Today, after the company's dramatic rebound, the grid is little changed: iMac for the home, Mac Pro for professionals, iBook for consumer laptops and MacBook Pro for pro laptops. They've added the XServe for enterprise and the Mac mini for the low-end entry market. Simple and each targeted to a specific market section. If you know what you're doing, sure you can get more bang for your buck from Dell but most users either aren't that savvy or don't want to agonize that much over something they're going to use for email and web browsing.
For consumers, having 30 choices that offer incremental differences between products isn't really any better than having just one. Apple figured that out to great success. Hopefully more companies will figure that out as well.
Great article!
By w00d3y at 7:07 PM ON 04/30/07
Whoops, sorry for the double post.
By iceman7709 at 8:58 AM ON 05/03/07
Loved the article and I agree the iPhone will do well. First, it will be from Apple and then it will be new and Americans love to purchase new tech toys, so it will sell. However, I would not go along with all the cell phone companies getting rid of all their models for just one or two high end models. Plenty of us around that do not want to spend from $200 to a $1000 for a cell phone, no matter what it does. No, I believe I will wait for a few years for the iPhone to come down, if it does and if it doesn't, well, the Razr is still a good phone.
By Angryhob0z at 10:14 AM ON 05/03/07
First off, the Iphone, Ipod, and even Apples computer product line, NONE of them are unique. The only thing "Unique" about Apples products are the fact that they are made solely by Apple.
The IPhone will do well in the beginning because of the icon Apple has made itself into. After that, when more IPhone killers (i.e. http://technabob.com/blog/2007/02/13/samsung-sgh-f520-yet-another-iphone-killer/ ) come out sales will drop like every other phone, MP3 player, Computer, etc.
People in general want to be sheep, they all want ipods and iphones cause they are status symbols. But there needs to be choices for the people that aren't sheep nor have the desire to be sheep. Not limited by how many phone companies there are.
You yourself (directed at the author) you seem like a sheep, totally willing to follow Apple wherever it goes, eweing its name from the mountaintops. This article seemed like a battleplan for apple to take over the cell phone market with suggestions leading to the takeover of the computer/camera.
Although, I do agree that the market is diluted with products that have very similar features. And think that companies could cut back, but one product per compant is ridiculous.
By Angryhob0z at 10:14 AM ON 05/03/07
First off, the Iphone, Ipod, and even Apples computer product line, NONE of them are unique. The only thing "Unique" about Apples products are the fact that they are made solely by Apple.
The IPhone will do well in the beginning because of the icon Apple has made itself into. After that, when more IPhone killers (i.e. http://technabob.com/blog/2007/02/13/samsung-sgh-f520-yet-another-iphone-killer/ ) come out sales will drop like every other phone, MP3 player, Computer, etc.
People in general want to be sheep, they all want ipods and iphones cause they are status symbols. But there needs to be choices for the people that aren't sheep nor have the desire to be sheep. Not limited by how many phone companies there are.
You yourself (directed at the author) you seem like a sheep, totally willing to follow Apple wherever it goes, eweing its name from the mountaintops. This article seemed like a battleplan for apple to take over the cell phone market with suggestions leading to the takeover of the computer/camera.
Although, I do agree that the market is diluted with products that have very similar features. And think that companies could cut back, but one product per compant is ridiculous.
By gunghost1 at 10:57 AM ON 05/03/07
I think that the author of this article is forgetting that everyone in the world is different and have their own unique tastes. Just for looks the iphone will not dominate the market. It'll sell good b/c of the great fan following apple has, but honestly if you spent $300 dollars on a ipod video and already spent money on a current cell phone are you going to just self those products for another product that does the same thing. I think that a lot of people will see that they don't really need this because they already have an apple product that does the same thing. However I think that the iphone will do well, but not dominate b/c most consumers do like those choices, that's why apples don't dominate the computer market. If the iphone was the first revolutionary phone product like it was with the ipod then I think it would of dominate the market, but it's trying to enter an already competitive market that has dozens of different choices for dozens of different consumers trying to find a phone to match their personalities.
By philospeak at 11:45 AM ON 05/03/07
It is the age old battle of concept focus or market saturation. In the case of Motorola, I believe they made a large number of phones to satisfy phone companies (who want unique phones) and to fill up the retail space. They didn't really go for the category KILLER APP (product). Motorola was never of that ilk, although the RZR phones did generate buzz and may have been the vehicle. They just don't know (and are restricted by existing relationships) to act on it. Apple has a unique position, very much like they did with iTunes.
Apple has always understood the idea of focusing on a single idea and engineering the **** out of it. Under Steve Job's tenure(s), they have opted to create single, quality products rather than a set of Swiss army knife. Other companies have had the opportunity.
Consider Tivo. I've personally convinced four tech-illiterate people to buy them and now they can't imagine living without it. I know because on the rare occasion one has gone down I’ve been asked to come over quickly to fix it. Now Tivo as a company has failed to leverage this success (i.e., make the company thrive), but the concept is powerful.
Apple sees that and has entered the space (very late) with AppleTV. Unfortunately for Apple in this case Tivo (and others) already have a compelling solution and are working on the next generation of features (as is Apple). AppleTV does work to capitalize on some connectivity and user-interface opportunities but the video quality complaint some users have made (i.e., low video quality from iTune downloads) may limit Apples success in this arena. Simplicity and quality are king. Despite using some audio compression, iPod skates that line well.
I really do hope the iPhone shakes things up. The mobile phone industry needs it. But judging on other companies responses to the iPod (i.e., pretty weak), if Apple works it right they have a HUGE chance to be a HUGE success. I wish them luck, for all our sakes!
--
Brian
http://philospeak.com
By loseanic at 2:32 PM ON 05/03/07
Apple has a large following and has made good use of it. Kudos to them for their marketing strategy but that doesn't mean that everyone wants or needs to use the same one. Yes, there are so many products out there that are very close in features but there are many of us who LIKE having all these choices. I have always been an individual and I like being different from the crowd. I have never gotten something just because it was popular or everyone I knew had one. I like to make choices based on what I need rather than on what everyone else has. I will research all the choices and find the one that is closest to what I am looking for and the more choices there are out there the more likely I am to find the exact match to what I am lookin for. I don't want a generic product that gives me no choice. I want to be an individual and choose for myself, whether it is a phone, a computer, a camera, or a candy bar. The ideal for one person may not be my ideal and if there were no choices then this would no longer be a free society (well as much as it can be in this government controlled world) and we might as well be carbon copy robots with the appearance of humans. The whole idea of free enterprise is just that- free, to express all the ideas out there, no matter how diverse.
By jsauvageau at 7:06 PM ON 05/03/07
I just checked the tech specs for the iPhone and found you'll get a "whopping" 5 hours of talk time per charge (who really wants to charge their phone every freaking night?). No mention of how long you have to charge the phone (which is probably a couple of hours like the iPod). What's the point? I'll stick to my current brand, which only has several types of phones (only three on their website) and promises AND delivers 12 hours of talk time per 1.5 hour charge. Also, a mere 400 hours on standby. Beat that Apple!!! I'm sticking with Sony!!!!! A little research before you buy will get you the best bang for your buck and you won't be just another sheep following the crowd, and you'll only have to charge your phone once or twice a week instead of daily.
By semm71 at 12:07 PM ON 05/07/07
Well I hate to be the guy who brings this into the light, but the author obviously does not understand the cellular industry as a whole nor the relationships that exist with the manufacturers. I'm not going to go into huge detail on that as it's extremely complex, but more to the point if the analysis of Cingular / At&T's existing music base were done and then add to that the number of user's currently using tech savy equipment you'll have a good idea of the number of user's you can now target. Don't for a minute think they will steal customers from Sprint or Verizon because of a "phone". Especially when both of those carriers offer very equivalent devices already. Secondly if you look at the specs on this thing there are alot of shortcomings.
By gajaguar at 2:19 PM ON 05/08/07
Ah there is the real problem with the current model, the ridiculous incompatibility between service providers and manufacturers. I have never understood why I can't take my existing telephone that I enjoy using and shop it around for a better deal with a different service provider.
It always seemed to me that the system should be comparable to the relationship between television manufacturers, the networks, and cable/satelite. Can you imagine if you could only watch Fox, MTV, and HSN on your Sony TV, the NBC package on Panasonic, etc?
Here is where Apple has the opportunity to make the most impact with the iPhone.
By bgilmore93 at 6:26 PM ON 08/12/09
Wow looking at the comments they say it might now succeed or do well. The IPhone has done very well and sold tons.
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bgilmore93:
Wow looking at the comments they say it might now succeed or do well. The IPhone has done very well and sold tons....More »