Apple Just Killed The Market for Phones

We’ll never see another Steve Jobs event like MacWorld 2007, when the original iPhone was unveiled, but boy did today’s announcements turn up the heat in the mobile space.

$199 for a better version of what has been almost unanimously hailed as the greatest mobile phone ever built.


And a year from now, it’ll be $99. That’s like an iPod Shuffle.

At the risk of sounding like a fanboy of the highest order, how on *earth* could the average customer justify purchasing any other mobile device at this point? If you can still get a free phone somewhere and that suits you, then great. But for the person thinking of spending between $99 and $799 on a Nokia, Motorola, Palm, or Sony, how can you even think about those alternatives given where the iPhone just went? The quality/feature/usability gap is so large that even a hatred for AT&T can’t keep people away now.

This sounds overly simplistic, but I really do think Apple just split the mobile world into two choices: settle for a free phone or buy an iPhone. There just aren’t many reasons to do anything else.

Even our Director of Technology and our CTO (both PC people) are both getting iPhones on July 11th… both having previously harangued the rest of the Newsvine staff for our incessant iPhone claqueury. When Apple critics turn that quickly, and without any prodding, you know a very important inflection point has been hit.

As for MobileMe, I was six months early in my call here, but most of the details are on target. Concurrent Exchange/Non-Exchange workflows, over-the-air syncing of everything that’s important to you, and finally a legitimate reason to pay a $99 subscription fee. I’m ecstatic to begin using this. It looks fantastic. Although the one thing I’m still not clear on is whether or not Apple Mail on my laptop will also be an Exchange client.

As a developer and designer, I’ve always hated “the mobile space” because I just viewed it as a really uninteresting transitional phase between regular cell phones and full-immersion goggles; but seeing how the form factor, UI, and engineering of the iPhone has transformed and freed the mobile experience is nothing short of astounding. Even more unbelievable is that Apple did it on their very first model.

Thousands of Nokias. Thousands of Motorolas. Hundreds of Sonys. And a single Apple buries them all.

84 comments on “Apple Just Killed The Market for Phones”. Leave your own?
  1. Riley says:

    Mike, does that mean I can get a good deal on your old iPhone on July 11th?

  2. David Ford says:

    You nailed it… even the most hardcore windows guys at my work are now talking about getting new one… couldn’t believe my ears today.

    Luckily my wife wants to “buy” mine so I’ll be upgrading July 11th.

  3. “how on *earth* could the average customer justify purchasing any other mobile device at this point?”

    A two year contract is mighty unappealing to me and aren’t the data rates not so great? Seriously, the contract thing is bordering on absurd.

    As a Flex developer I also don’t think I could bring myself to get one until it supports Flash. Its not the real web until then and I have no desire to develop anything in AJAX or Obj-C (thats what iPhone apps are I think, could be wrong).

    I also don’t see the big deal about MobileMe. I will take Google apps and a handful of Firefox plugins and keep my $99, thanks.

  4. Phil Wilks says:

    I wonder what the UK price will be, and what sort of contract you’ll be tied into with it. If it were to match the US price (e.g. £100) that would be fantastic.

  5. Mike D. says:

    Riley: Ordinarily, I’d say yes! But I’m going to be giving the current one to my dad (who has never even had a mobile phone). I’m sure you’ll be able to get one for 50-100 bucks on eBay in no time though.

    Ben: I can definitely see why people don’t like the AT&T aspect (because they just aren’t a great provider) but the contract aspect itself doesn’t seem like a big deal to me. Do you switch providers every several months? Most people don’t. And hell, if you really want to break the contract, you’d essentially just be paying back your iPhone subsidy. I’ve done it before with Sprint. Not a big deal. As for Flash on the iPhone, most of what I use the mobile web for doesn’t require Flash. In fact, none of it does. I like Flash as much as the next guy (see sIFR), but for mobile, it just hasn’t proves necessary yet.

  6. Matt Hoult says:

    Mike: You won’t have exchange support in Apple Mail until Snow Leopard drops in about a year from what Serlet was saying. Snow Leopard (10.6) will have exchange support (2007 only) for Mail, iCal and Address Book. Snow Leopard server will also have full sync support, ZFS w/r support and Address Book server.

    Sounds like a great update.

  7. The great thing for the release in Australia is the fact that we won’t be controlled by one single phone company entity. Looks like us Australians will have the opportunity to buy the phone straight off without a plan thanks to a few of our fairness laws…

    The only down side is that some features will be reserved for those who have their iphones on a plan…. but i don’t think too many people will be complaining.

  8. Tim M says:

    I had 8 people ask to play with my iPhone today.
    I had 3 others ask if they could buy it when I upgrade.

    5 of those just bought (out of pocket) blackberries for work, and the others also have new smartphones…

    Course I couldn’t help buy kill all their hopes and dreams when I pointed out their two key clients are M$ and T-Mobile.


    Thus is Seattle…

  9. Josh says:

    Great post, although my wife is sitting here as I read it (out loud) and she begs to differ. First, she’s not a technophile who lusts after these things as I do. But even she would get an iPhone were it on Verizon. Not because she thinks Verizon is that much better than AT&T, but because (no joke) I am the only person she calls on a regular basis not on Verizon; so pretty much all her calls are free anytime except to me. And there’s no way she’ll be able to get half of those people to switch (her sister, mom, dad, grandmother, aunt, at least 5 or 6 friends, heck even my parents all use Verizon).

    Personally I don’t make enough calls to use up all my minutes, but she talks to people for hours on end so this is a real issue for her. I’m certain she’s in the minority, but she’s still going to hold out for those 4 more years of AT&T exclusivity.

  10. Mario Stocco says:

    The impact of today’s iPhone party is having a unique impact up here in Canada. All the buzz that surrounds the iPhone and the fact that it is still not available for purchase (officially) in this country has put Canadian mobile carriers under scrutiny from the Canadian government, media and populous at large. A typical cellphone plan here in Canada is 50% more expensive than a similar plan from an American carrier. The lack of the iPhone’s availability here has fuelled discussion about the anti-competitve state of our mobile industry.

    Apple announced today, a deal with Rogers to bring the iPhone to Canada on July 11th and interestingly, there was no mention of pricing or exclusivity (as with AT&T).

    Apple is changing the rules with the iPhone; even in places where the iPhone has yet to land.

  11. […] love with the iPhone, unlike almost all my friends. But many people including Mike Davidson beleive the iPhone, now only $199, will become the dominant mobile phone. We shall […]

  12. Joel Price says:

    Good post, I agree with much of what your saying. Apple nailed touch UI and web browsing for mobile phone. However, it still lacks many of the features the Nokia N95 can do, for example live mobile video streaming via Qik, and basic picture mail and copy/paste functionality. Apple is shaking up the industry in a big way, but I don’t think it’s over. Nokia still sells more phones every week than Apple has sold since the iPhone’s introduction. If Nokia can make adjustments the consumer will win out with many great options for phones.

  13. Mike D. says:

    Matt: Great info. I must have totally missed that in the keynote. Or maybe it’s somewhere else.

    Josh: Maybe after she plays around with yours for a few minutes, her outlook will change. :)

    Joel: That’s a good point about the pure volume Nokia does. It may not be pretty, but it’s a shitpile of phones! I have no faith that they will ever produce anything as good as the iPhone, but they do have a 40% share of a huge market currently.

  14. Joel Price says:

    The problem with Nokia is they view the mobile carrier as their customers while Apple views the user as it’s customer. Now that the iPhone will be subsidized Apple will need to be careful not to fall into the same trap other mobile phone developers have done by pleasing the carriers and putting the end-user second.

  15. Jonas says:

    My mom recently bought a new phone, and the only requirement she had was that it should be small. In fact, that is the most common complaint among my friends, they think the iPhone is too big.

    The iPhone is absolutely amazing, and I will certainly get one, but it’s not for everyone.

  16. Jerry Frye says:

    I have to agree with most of what Joel Price said plus a couple of things that even the most avid iphone ‘fanatics’ are aware of. HOWEVER, I will say this, NOW they have my attention and at least they are moving in the right direction in a methodical yet speedy fashion. They have my attention yet haven’t quite won me over…at least not yet. It’s alittle funny because now I’m paying attention to many more articles and blogs about it so if (maybe when) I make the jump I’ll not have much of a learning curve or at least can use it to its fullest quickly. Just a few more thing I either need or want and I’ll be there. I’m trying to read the tea leaves to guess which generation of the phone will leave me without reasonable excuses.

  17. Garth says:

    O2 in the UK will be giving the 8GB model away for free on £45pm contracts. It will cost £99 on the £35pm contracts. O2 are also planning to sell the iPhone on PAYG in the near future. I predict these things will be in short supply around Christmas especially in the UK as the ‘most wanted gift of the season’.

  18. […] just killed the phone market Totally agree with Mike Davidson about the new iPhone. I know my wife and I are getting iPhones on December 27th, the day our Verizon Wireless contract […]

  19. tightwadfan says:

    One of the main reasons I have a cell phone is for emergencies. Based on my experience with the iPod, I do not trust the iPhone or AT&T coverage in an emergency. That is “how on *earth*” I justify not buying an iPhone. I speak from experience having been in a bad car accident 5 years ago in bumf*ck South Carolina where I used my $80 Motorola with Verizon to call my family. The phone had lines across the screen from being tossed around the car but continued to work fine until I upgraded a few years later.

  20. tightwadfan says:

    Before I sound like a complete hater let me just say I think in theory the iPhone is fabulous and would love to have one. I just think they’re too delicate.

  21. mike says:

    mike, i think you’re missing perhaps the most important takeaway here:

    Apple penetrated the carrier-centric market here with a full-functioning device that you pay real retail for, versus our typical model of extremely capable devices that are subsidized, and thereby crippled terribly by the carrier (*cough* verizon wireless *cough*)

    now that an apparently fully-functional phone is subsidized, what does that mean? does the subsidization give the carrier more power to nix innovation, or is the market freer for other phones to not be shackled by service providers?

  22. Unfortunately AT&T coverage is poor where I need the phone the most. So unless other carriers are going to be allowed on this train…

    I hope that other phone/mobile device makers take a few tips from this.

  23. paul says:

    $199 is the subsidized price

    the telco’s subsidize it over the 24 month contract
    be interested what you actually pay after the 24months is up, anyone know the real price???

    At least you know what you are going to pay for one… here in Australia we dont have the prices or plans yet!!

    my carrier here in Australia – 3 is not at this stage stocking the iphone so i have a major dilemma Want iphone, But under contract to 3…. arrgghhH!

  24. Perry says:

    Argh! I’m living in the dark ages with my Motofone f3. Why am I so hopelessly out of step? Good for Apple though. Been a fan (but not a fanboy) since 1998.

  25. Shane says:

    Paul: I imagine that after the 24 months is up that the technology will have caught up enough that they’ll be able to justify selling it for $199.

  26. Living in one of two states where there is no AT&T service, it’s not a matter of not wanting one but rather not having a choice. There are rumors AT&T is expanding service to Vermont this summer, but until that happens I’ll have to watch jealously from the sidelines. Sigh.

  27. Harsh says:

    It’s too big for a phone.

    I can’t justify carrying it in my pocket everywhere.

  28. Vince says:

    I patiently await Android. It could change everything.

    but it might not

  29. Greg Hinch says:

    Unfortunately what Apple didn’t trumpet was that although the phone itself went down by $200, the data plans went up by $10/month, and over the course of a 2 year plan thats an extra $240..

  30. Mike D. says:

    Joel: Yep, it’s clear that Apple has called almost all of the shots so far, so let’s hope that stays intact. I think it will, as VOIP and WiMax become more widespread. Once that happens, goodbye phone carriers.

    Jonas: Yes, I agree. If your only requirement is that a phone be super small, there are plenty of free ones out there. Not worth paying just for small size.

    tightwadfan, David, and Scott: Yes, obviously if AT&T simply doesn’t work at all where you live, that’s an unfortunate deal-killer. I didn’t even know they didn’t have service in Vermont. That is crazy!!! You should picket.

    Harsh: It really isn’t that big. Here’s the comparison

    Thickness: 11.6mm for iPhone, 13.9mm for Razr. Winner: iPhone
    Height: 115mm for iPhone, 98mm for Razr. Winner: Razr
    Width: 61mm for iPhone, 55mm for Razr. Winner: Razr

    So it’s really pretty close in all dimensions… and that’s with the Razr in its closed position.

  31. Beth says:

    I would… but the data plan is just too expensive. They are increasing it 10 dollars to $45 a month on top of the voice plan. Eeek.

  32. Beth says:

    I should note, that price is for the 3G plan…

  33. Ian Patrick Hughes says:

    Wish I could, say, copy and paste text with an iPhone though . . .

    I was forced to make the choice of the HTC Kaiser Windows based phone or the iPhone a while ago. First, at the time the lack of 3G and Outlook Exchange access made the choice for me.

    Ok, so now those issues seems to be solved why the hesitation to offer some other business requirements? I tether my laptop to my 3g connection via bluetooth at least 3 times a week. Seems to me if the iPhone really wanted to establish itself as the end-all; the business demo would not be totally ignored.

  34. Mike says:

    I don’t know where some people live, but here in Bristol in the United Kingdom the original iPhone didn’t do all that well, considering no one with a brain would pay that kind of money for a phone AND the £630 for an 18 month contract. My Nokia N73 cost over £300 when it first came out, and on my old £35 a month contract it was free. There’s no way in hell I’ll pay extra for a new iPhone on top of that contract when a competitor will have one out in a few months that’ll be just as good.

    As far as I see it the iPhone does one thing well, and that’s scaring the other mobile phone developers into making better phones. I’d definitely get one if they weren’t still so expensive on contract.

  35. David Robarts says:

    Mike – the OS X Snow Leopard info was dished out to developers in the afternoon. Apparently Apple lifted NDA requirements for some of that info; it wasn’t in the Keynote.

    My biggest problem with the iPhone is the cost of the data plan. I’ve heard the plan for the 3G iPhone is $30 (original iPhone was $20) per month for unlimited data. I can barely justify my voice plan as it is – I just don’t need mobile connectivity that much. I would love mobile internet (I think I would use it more than I currently use voice). If AT&T would allow me to use the TAP that they offer the deaf I would probably switch (currently on Verizon with a non-advertised 550 minute family plan that I share with my wife), but paying for data on top of the price I pay for voice now just doesn’t make sense to me. I don’t even use SMS because in my opinion it is an extra charge for a service that REDUCES my demand on their network – I don’t use all my minutes anyway, I’ll just call instead. Mobile internet access would further reduce my demand on the voice network, so I don’t want to pay (much) extra for it (I could probably justify $5-10/month for the added benefits).

  36. Brian says:

    Well put, Mike. I’m in for one now. I thought the original was outrageously priced, albeit at a price Apple new it could sell it at.

    I just received a free Blackberry Curve through an extended plan on TMobile. I like it, but I don’t care how much I have to pay to break my service plan with them, I’m now getting an iPhone.

    The 3G speed, push capability (also adding MobileMe), GPS, and smaller price tag sold me.

  37. Shams Shirley says:

    So — does mobileMe email push work with any email account that I’m currently using with Apple’s Mail client, or do I have to use a mobileMe email account? Would it work with

  38. Ward says:

    A lot of the non-techies I know just aren’t willing to pay $30 extra (or, previously, $20) for wireless internet every month. Those are customers that Apple/AT&T are going to have to figure out another way to get to.

  39. Bob Jones says:

    Mario: There’s probably not an exclusive contract in place, but Rogers doesn’t need one. They’re the only carrier that can support a GSM/3G phone in Canada, the only other entity that could is Fido, which is owned by Rogers now.

  40. Dave Simon says:

    Of course, if you can’t get AT&T service, or are under contract with another provider, those are reasons not to get an iPhone too.

  41. Ben says:

    The data plan cost is nontrivial, though, as some here have noted. $200 for an iPhone is easy – it’s that recurring $30 that stings, especially when it used to be $20 *and* included the $5-tier text messaging package. A $15 boost over my current bill (since I pay for 200 txt anyway) is one thing; twice that and the new iSuperGadget is *more* expensive than the old one, before very long.

    Game-changing and industry-transforming? Yes. But let’s not pretend it’s just the difference between accepting a free POSphone or scrounging up the $200 for an iPhone.

  42. Brendan says:

    The iPhone 3G is really appealing, but I just don’t know if the price is worth it. Compare the iPhone on AT&T to the HTC Touch on Sprint SERO over a 2 year contract period:

    iPhone 3G:
    $200: iPhone 3G with 8G
    $960: $40/month for 450 minutes
    $720: $30/month for unlimited 3G data
    Total: $1880 over 2 years

    Sprint SERO:
    $250: HTC Touch with 512MB MicroSD
    $720: $30/month for 500 minutes, unlimited data, unlimited SMS/MMS
    Total: $970 over 2 years

    Although I did this comparo with the old HTC Touch, the new Touch Diamond should be on Sprint in a few months, with a more competitive browser and 4G of storage. Also, Sprint’s rebate handling is screwed up, and they regularly send rebates for hundreds of dollars more than intended.

    Conclusion: A Touch on Sprint is half the cost of the iPhone. Sprint’s data network is also better. Of course, the iPhone’s interface is leaps better, and will have better resale value at the end of the contract. But…is it worth twice as much? In fact, you could buy a HTC Touch, and an iPod Touch (for the browser and cool apps), and still come out ahead of an iPhone on AT&T.

  43. Geoff says:

    I am smashing my forehead into my desk. I agree with all you say, *except* for the fact that I depend on (but have to buy with my own money) a phone to connect with our Lotus Notes/Domino server for email, calendar, and contacts. It’s a national IT infrastructure, so they’re not going to change it for cool and shiny. (Hell, it’s Notes. Notes was never cool, or shiny, yet it does plug along in it’s ugly, klunky way.)

    I’m doomed to another BlackBerry, it seems. (We have a BES, and I even had to buy my own CAL for it. Sheesh.) We can use Good, but I don’t think that helps.

  44. sfenerule says:

    No voice dialing, no video capture, no still camera upgrade, no Bluetooth data exchange, plus an extra $360 out of pocket and a reset to Day 1. I was ready to buy July 11th, but short of hardware failure, or theft, I’ll ride out my current deal.

  45. mark says:

    I’m getting one but I don’t want to stand on line on July 11th. Maybe early Sunday morning…

    Being able to easily use email, maps, and web browsing was how Apple tried to get the average non-wireless Internet person to go for the extra fee. But web browsing and web apps still seemed too hard. So now customized UIs via SDK for those web apps is what they’ll try. That would include networked games.

    Just like people have begun paying $35 or more for home broadband (instead of $10 for dial-up or nothing for no Internet access at all), someday, they’ll be enough reasons to pay the extra for data on the go. Slowly, inexorably, some company, most likely Apple, will get most people there.

  46. Thomas says:


    I am not positive you can do concurrent Exchange / Mobile sync with calendars and contacts (you can of course with Mail-that is just two email accounts with push).

    My sources with the iPhone software say you can sync with your local computer OR Exchange, but not both.

  47. […] de iPhone t.o.v. z’n concurrenten betekent op de markt wordt mooi samengevat in dit artikel van Mike Davidson: If you can still get a free phone somewhere and that suits you, then great. But for the person […]

  48. Ken says:

    Gotta say, I agree with the rest of the people ’round here on the killer being the plan price. However, if I can talk my bosses into letting me get one as a replacement for my BB 8800 (which already has to have a fairly high plan price), I’m all over it. Wish it had tethering, though.

  49. iDavid says:

    I was more underwhelmed with the product features and even less excited about the new pricing. As I see it, Apple did good by going for a cheaper price point, but aside from 3G and GPS which are easy to do from the hardware side of things, what is compelling vs my existing iPhone?

    Where is the voice dialing? That could have been implemented very easily with the double push of the home button triggering the voice dialing UI. Given the hands free requirements of most states, why wasn’t that a MUST feature for this phone?

    Now AT&T is dinging customers for text messaging and more for a data plan. If you ding me more for a data plan, where is tethering?

    IF they at least did tethering I’d probably be all over this.

    Where is the front facing camera? Where is the higher resolution camera? The cost differential should have been minor, as other phone platforms have better cameras already.

    It appears as if Apple wants to wait till 2009 to provide video chatting as the next feature to push a new model in 09. I can see them also holding back on the storage size as well for that reason. Where is the 32 Gig version?

    Here is what I would have preferred. A third model the iPhone Pro, with 32 Gig, 5 megapixel front facing camera, data tethering, voice dial. I’d buy that phone as it would have the features I want. Right now it looks more like a long roadmap to incrementally get what should be available with off the shelf technology.

  50. Jonas says:


    5mp camera, really? Why?

    3mp is enough for a A4-sized print and more megapixels on such a small sensor just equals more noise.

    I actually think I could live with a 2mp camera in a phone if they bought a sensitive low noise sensor from Fuji for example, and replaced the lens with something a bit better.

  51. Geoff says:

    How do we know the 3G won’t be able to tether via BT?

  52. D76 says:

    Brendan: You’re comparing a public plan with a private, employee plan. Give me a break. That’s like saying that because you can get a t-shirt from your friend that works at The Gap for a discount that makes it lower than a t-shirt from Target that the Target t-shirt is a bad deal for everyone. Sprint is not handing out SERO plans to everyone who wants one. If you’re REALLY going to make a comparison, then why don’t you compare it to what ATT employees pay.

  53. Jason says:

    Do you think AT&T will always be the exclusive carrier or after a couple of years (like with the Razr) the iPhone will be sold for additional carriers. I haven’t had any issues with AT&T so far, it seems better than Sprint was (I broke that contract for the iPhone). Actually I believe I’m saving a bit of money thanks to roll over minutes.

  54. rand says:

    @tightwadfan : check out the following links for toughness =)


    if that’s not tough enough, dunno what your expecting…


  55. Brendan says:

    SERO is Sprint Exclusive Referral Offer. Used to be for friends/family of employees, but not anymore. Anyone can sign up. All you need to enter is a email address–this could come from a business card at a Sprint store, or even Sprint’s executive bio page. And FYI, Sprint employees have their own plans which are even cheaper.

  56. […] is now so stark that even the Centurions should be able to tell the difference. Mike Davidson makes an excellent point. If I ever find myself in the position of needing to spend money to get a new phone, that phone is […]

  57. […] Mike Industries: Apple Just Killed the Market for Phones. Hell yeah! […]

  58. […] at least so says Mike Davidson: This sounds overly simplistic, but I really do think Apple just split the mobile world into two […]

  59. ketsugi says:

    Why does it have to be either-or? From what I’ve heard, in Singapore the iPhone will be offered at various subsidised prices depending on which plan you buy with it, with the most expensive business plan (S$120/mth) letting you pick up the iPhone for free.

  60. Cell phone service just costs too much. Even worse than before with this 3G phone.

    I’ll stay happy with my iPod Touch and a Tracfone from Wal-Mart.

  61. […] Mike Davidson – Apple Just Killed The Market for Phones Free phone or iPhone… which will it be? (tags: blog article technology iphone apple editorial) Bookmark this post:Bookmark and Share This Page | « CloseSave to Browser FavoritesAskbackflipblinklistBloglinesBlogMarksBlogsvineBUMPzee!CiteULikeco.mmentsConnoteadel.icio.usDotNetKicksDiggdiigodropjack.comdzoneFacebookFarkFavesFeed Me LinksFriendsitefolkd.comFurlGoogleHuggJeqqKaboodlelinkaGoGoLinksMarkerMa.gnoliaMister WongMixxMySpaceMyWebNetvouzNewsvinePlugIMpopcurrentPropellerRedditRojoSegnaloShoutwireSimpysk*rtSlashdotSphereSphinnSpurl.netSquidooStumbleUponTailrankTechnoratiThisNextWebrideWindows LiveYahoo!Email This to a FriendHTML: If you like this then please subscribe to the RSS feed.Powered by Bookmarkify™ More » […]

  62. Mike G. says:

    I am curious with MobileMe … is it using IMAP-IDLE for email, CALDAV for Calendar and LDAP for Address book push-syncing? Just curious how MobileMe is able to work.

    It would be nice if there were alternatives to MobileMe for Over the Air Syncing with iPhones. Like if one was savvy enough to maybe have a home server (/w IMAP-IDLE, CLADAV, LDAP services) setup on DYNDNS to act as the “cloud” (as apple calls their service).

    Just a thought.

  63. […] world (aka the US), iPhone is the only subsidised smartphone available. Otherwise, for example, this post announcing the death of smartphone market doesn’t make any sense. As I’ve pointed out time and time again, the mobile markets are totally […]

  64. Kirkrr says:

    On Verizon: As long as Verizon sticks with CDMA technology, which is only available in the US, Japan and S. Korea, and not the ubiquitous, global GSM standard, then Verizon will not get an iPhone. If you want market share, go after the dominant network technology, unless there is a compelling reason to use the other.

    It is all about the mobile ecosystem. Blackberry did not get to a dominant position it the smartphone market by having cool, sexy hardware, but in the back end infrastructure that provided instant email, calendar, and contact info. iPods are not the best MP3 player, but the iTunes infrastructure makes the entire experience so easy, that iPods dominate the music space.

    MobileMe, along with Exchange support, and the IBM announced, iPhone NOTES support, will make the iPhone infrastructure even more attractive to connected smartphone users than Blackberry. Combined with the very functional (read: great user experience) iPhone AND the massive opportunity as a gaming platform (something that Blackberry will never have, as long as you have to write 18 different version to support all the BB models), and you have a strategy that eclipses all the other players.

    Does Samsung, Nokia, LG, etc. have some great hardware? Yes, but it has never been about hardware – hardware is a commodity. It is about the software, access to the data, and making the user productive.

    The rest of the cell phone community has a long way to go to catch up.

  65. Tom Ross says:

    I don’t agree. For most people, those who have never used their phone for anything but calls and sms before, it will be $30 more per month. That’s still a price tag too big if you aren’t convinced about the particular features of the iPhone.

  66. Harsh says:

    @ iPhone being smaller than razor.

    That info is really interesting Mike – Thx. I will def have to take a look when it comes out here in Canada.

  67. Chris says:

    The thing that really blows me is the number of applications being created for the iPhone by independent companies world wide.

  68. MyDogBen says:

    Joel deserves a little more applause than he is getting, because he hit the nail square on the head. Up til now, the phone companies treated the cell carriers as their customer. Apple comes in, and treats the end user as the customer. This is how the revolution was born. Game changing. I hadn’t looked at it that way before, Joel.

  69. […] no es matar el mercado de teléfonos móviles. Es cambiar el modelo. El 11 de Junio le toca a Nokia mover […]

  70. Beth says:

    Interesting point MyDogBen.

  71. John Whittet says:

    I’ve been thinking about this article overnight, and I think you (Mike) would be right if Apple had every major carrier. I think switching carriers is more of a pain than you think, and may not even be a choice for some people, depending on coverage or family plans or businesses or what-have you (as mentioned above).

    If I could walk into a Verizon, T-Mobile, Sprint, or Alltel store and see iPhones on the shelf, your headline would be very true.

    I ask this: how many people walk into the phone store with a $200 budget and *don’t* know about the iPhone? (Or how much it costs?)

  72. Alex says:

    I think that on top of the data portion being $10 more, SMS is no longer included, so that’s another fee to tack on top.

  73. […] Apple Just Killed The Market of Phones […]

  74. Porter says:

    I’ll say this much: as a UI dev, I’ve never had a net-positive reaction to having to deal with another browser for compatibility issues.

    But making sites work on the iPhone browser is interesting, and opens up all sorts of considerations that are fun to think through and implement.

    This substantially increases the business case for actively dealing with the iPhone browser for a broader range of sites.

  75. Jerry says:

    I have had an iPhone since day 3. It is the best multifunction device I have ever owned. It is certainly not the best phone and it doesn’t have the best carrier, but is good enough for my use. I must say though that the Blackberry Bold is tempting me…if they can match the web browsing capability of the iPhone with the new OS and promised browser refinements.

  76. Erwin Heiser says:

    Mike, as usual for us Europeans it’s a bit more complicated. Buying an iphone in Belgium without any carrier lock-in will set you back around 500€ or a bit over 700$.
    199? I don’t think so…

  77. Martin says:

    After I got a SE K800i a few years ago, I can’t imagine going back to a phone with a “unusable” camera. The day iPhone gets a proper camera (won’t happen in the nearest future), and also letting people run background apps, then I’m on!

    While i’ll wait i’m deffinitly going for the new C905 :D

  78. I’m with Brendan. I have an HTC Touch with Sprint
    $40 1000anytime, unlimited text, data, and phone as a modem
    (I only use about 200 minutes a month)

    I’ve been with them 13 years.

    I wouldn’t buy the touch again. Wish I could get an iPhone on the Sprint plan. wooooo eeeee! That would be suite.

  79. […] most Singaporeans are not ready for Smartphones yet, or perhaps the other way around. Mike Davidson wrote that the recent price drop for the iPhone in the United States would “split the mobile world […]

  80. Eric Atkins says:

    How can you pick another phone?

    How about a phone that:
    you can tether to your laptop
    record videos
    has a focus on the camera
    has a zoom on the camera
    has a light or flash on the camera
    has a second camera on the front of the phone for video conferencing
    has an 800 x 480 touch screen (2.5 times the resolution of iPhone)
    has a QWERTY keyboard
    supports MMS messaging (does the iPhone support this now?)
    has voice recording
    runs open source software
    supports HSUPA
    supports HSDPA 7.2 (actually, the iPhone may support this; I’m not sure)

    The iPhone does none of the above.

    The Sony Ericcson Xperia does all of the above and supports almost all of the same features that the iPhone has except for internal storage (however the Xperia supports microSD cards). I don’t know about you guys…actually, I DO know about you guys…but I’m going to rock the Xperia. The only thing I’m giving up over the iPhone is the internal storage which can be matched (exceeded if I buy multiple cards) via microSD.

    If the iPhone doesn’t support HSDPA 7.2 (I know it doesn’t support HSUPA), the Xperia will be able to download data twice as fast as the iPhone. Uploading data from the Xperia is going to be several times faster than on the iPhone.

    I like Apple. The iPhone is rock solid and you can’t really go wrong with that device. I may get one for my wife who is a casual mobile device user.

    But make no mistake. Apple mobile devices are about software and services. The iPod is about iTunes and the music store. Apple wants the iPhone to be about iTunes and the marketplace. They want to control what goes on your device. I’m opposed to that kind of restriction.

    Think about everything open source software is. Look how almost everyone reading this blog supports open source. The iPhone 3rd party apps are the exact opposite of the open source software movement.

    And I know WinMo has problems. I’m in my 3rd year of WinMo usage.

    I think I know what I’m getting into.

    Look at the iPod hardware. Today and even back then when the iPods first came out, you could find MP3 hardware that was superior (that is, hardware that had more capability). However, iPod took the marketshare because, well, Apple is Apple and they had a rebirth; great software and services, thousands of publisher deals, and a slick and simple UI.

    History is repeating itself with the iPhone. Phones are out there that have better hardware capabilities. Heck, the 3G iPhone lack features that were on phones years ago.

    However, Apple is going to have a winner with it’s software and services, AT&T carrier deal, and iTunes app store. People are going to love it.

    I would love it, but I’m picking another road. It probably won’t be easy, but that’s the price I’m going to pay for a few more features.

    Maybe the next iPhone after the 3G will have the hardware features I want.

  81. alphadog says:

    Let’s see, do I hate AT&T less than I lust for the new iPhone?

    I really, really, really hate AT&T. Really. Their customer service is absolutely the bottom of a bad mobile barrel in the US. It may be fine for the retail space, where there isn’t a strong dependency on a good provider, but for an IT manager in a small company like me, AT&T is a horrid partner.

    And, I speak from experience. As an example, a recent order for a batch of 5 phones resulted in a bad setup. I spent five hours on the phone, going through nine(!) departments, and six the next day to get the issues resolved. That’s just one example.

    It’s really too bad that Apple went with AT&T. That is one of the principal factors preventing my personal and work-related adoption of the iPhone.

  82. wesley says:

    I hate AT&T. Never ever will I go to them. Just a personal preference and past experience. I’m going to see what the Instinct has to offer. The iphone is so hot and looks so cool, but I just can’t make the switch. Sounds like I’m trying to get off windows again… Nevertheless it’s rather Apple of Apple to create an exclusive agreement with AT&T. I wonder when that contract expires and if they will open it up to the rest of the providers out there. Unless Apple has a stake in AT&T maybe ponying up for a takeover?) what reason would they have to remaining exclusive. Everyone wants one, only AT&Ters get it. I mean they got on the app-store bandwagon quick after millions of hacked phones. I mean, I use a hackintosh for christ sakes.

  83. modemlooper says:

    i actually think they messed up the name. It should have been imac nano and then had a smaller just phone version.

    I use my iphone as a mobile computer more than a phone.

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