[Sigia-l] Apple's iPhone Changes The Stakes, Not The Game

[Ziya Oz]

prady:

> "its function as an Internet device is hampered by the absence of a high-speed
> cellular connection"

They should enlarge a photo of this sentence and put it up at Harvard Biz
School for an illustration of cluelessness: Trees. Forest.
 
> What is "The Game"?

The game is the government sanctioned spectrum allocation which is the
source of carrier revenue. Based on the perception of scarcity, an ever
smaller number of companies own the pipes/tubes/gateways. Thus they can
dictate pricing, design, technology and ultimately usage patterns, in a way
to maximize their revenue. For example, on a two-year data/phone contract
worth $3,000-$4,000, the $200 subsidy the carrier gives to the device
manufacturer is just customer acquisition cost they are happy to pay. The
manufacturers have no control over the operating system their devices run on
or the feature set carriers can dictate, not to say anything about back-end
server/service features. Not unlike the disjointed Microsoft-Wintel
arrangement, this is not fertile ground for innovation.

For the very first time in any significant way, an outsider to the game
comes into the market not only with new hardware but by far the most
sophisticated underlying operating system -- all integrated. And convinces
the biggest carrier in this nation to begin to change its services. That's
huge.

To the extent the iPhone is successful, it ushers in an "appliance" model
into a market now entirely driven by "the assembly of disjointed components"
model. If it succeeds, the doors of hw/sw/service innovations will be kicked
wide open.

> Can "design" change the game for cellular phones?

Design is the *only* thing that can change it.

> What is needed for iPhone to change the game?

The FUD to subside.

> What is missing?

This is just the beginning of a rich product pipeline at Apple. One has to
be blind to not see how unbelievably well Apple handled the birth and
maturity of the iPod line, both in design and business. Nobody else even
comes close to having that experience.

What's really interesting in reading thousands of articles and commentary on
the iPhone is the impatience and frustration of people who say, this is the
perfect product I've been waiting for, I only wish it had this [or the other
feature]. When a product reaches that level of "I've been waiting for this
for so long why can't it be perfect" status and maps so well with pent-up
desire, it changes the game.

Ziya
Nullius in Verba