Steve Jobs unveiled the iPhone with enormous fanfare. Paul Durman in San Francisco assesses its likely impact on the mobile industry
Executives from almost every consumer technology company converged on Las Vegas last week for the industry’s largest annual gathering. As is traditional, Microsoft’s Bill Gates opened the sprawling Consumer Electronics Show (CES), delivering his vision of the digital home, while the Asian television manufacturers competed to see who had made the most absurdly large flat-screen TV — Sharp won this year with a 108-inch monster.
The thousands attending the show had a chance to listen to an impressive cast of chief executives — including Michael Dell, Disney’s Bob Iger, Nokia’s Olli-Pekka Kallasvuo and Motorola’s Ed Zander — who shared their thoughts about the future of personal technology.
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More than 2,700 companies were in Las Vegas to unveil their latest products for gadget fans. Among them was LG’s new DVD player, the first capable of playing both of the next-generation video formats, Sony’s Blu-ray and HD-DVD.
But this year’s CES had a big problem. All the talk was about a product that wasn’t even at the show, made by a company that was staging its own rival event. That company, of course, was Apple and the product was its eagerly anticipated iPhone — unveiled to huge acclaim by Steve Jobs at the Macworld show in San Francisco.
One reporter at CES ruefully observed: “CES is dead because iPhone is all that mattered today. There is a mood that everybody here went to the wrong party.”
The announcement of the iPhone — a combination of a mobile phone, an iPod music player and a device for accessing the internet — lifted Apple’s shares by a total of 12.5% on Tuesday and Wednesday, to a new all-time high of $97. That raised the company’s market value by $9.5 billion (£4.9 billion). Even a dispute with Cisco, the networking giant, over the rights to the iPhone name only modestly dented the enthusiasm among investors.
Apple’s inspirational founder and chief executive is never slow to hype his products as “the world’s best”, and the iPhone is no exception. Months before it reaches the market, Jobs put the iPhone on a par with Apple’s two biggest breakthroughs — the original Macintosh computer in 1984 and the iPod in 2001.
“We’ve been lucky at Apple to have had some really revolutionary products,” said Jobs. “We’re going to do it again with the iPhone in 2007.”
Macworld, full of thousands of fervent Mac fans who will applaud Jobs’s every utterance, is not the best place to make a cool-headed assessment of the iPhone. Nonetheless, the look and feel of the device — it is shaped like a chocolate bar and is only 11.6mm thick — is every bit as impressive and compelling as Apple’s fans have come to expect.
Just as the Mac introduced the world to the computer mouse, and the iPod is famous for its click wheel, the heart of the innovation in the iPhone is its user-interface — a sophisticated touch-screen that responds to the flick of a finger.
The cleverness of the screen has to be seen to be appreciated. Among many small but startling touches, internet pages can be resized for better readability just by “pinching” the screen. As a number of people noted, it is like something out of Tom Cruise’s science-fiction film Minority Report, which is set in 2054.
Charles Golvin, principal analyst with Forrester Research, said: “It’s a beautiful device, absolutely gorgeous. There’s a tremendous amount of innovation there. It’s a really good iPod. The support for video is beautiful. And it’s an absolutely wonderful phone.
“It’s not so much that any of the individual features are so beyond the pale in terms of comparison with others, but what they’ve done is make everything useable.”
Van Baker, an analyst at Gartner, said: “I was really impressed — it’s beautiful. But it’s pretty pricey too.” In America, Apple and its network-operator partner, Cingular, plan to charge $499 for a 4-gigabyte model, or $599 for a phone with twice the storage capacity.
Apple has yet to announce pricing for Europe, because it won’t launch the iPhone here until the end of the year. It is not clear to what degree the prices announced last week rely on an element of subsidy from Cingular.
Baker added: “It’s not an enterprise phone. An awful lot of what you are paying for in that phone is the iPod. Most companies are not going to be willing to pay a couple of hundred bucks for iPod functionality. Enterprises care about productivity; they don’t care about entertaining their employees.”
THERE are already hundreds of mobile phones on the market, and many with most of the functions of the iPhone. So why the fuss about one more? The answer is the extent to which consumers, and the technology industry, have come to believe in Apple’s ability to combine stunning industrial design with ease of use.
Stan Sigman, chief executive of Cingular, America’s largest mobile company with 58m subscribers, said his board entered into a “multi-year exclusive partnership” with Apple without even seeing a prototype of the iPhone.
He clearly has no regrets. On stage at Macworld, Sigman told Jobs and his devotees: “Every time I see it, it’s just wow — it’s just wow. It’s just really, really cool. You have exceeded my expectations.”
The minimalist styling of the iPhone — it has only one button on its front — is the signature of Jonathan Ive, the award-winning Brit who is Apple’s senior vice-president of design. Ive received the first public phone call from the iPhone during Jobs’s two-hour presentation at Macworld. With typical British understatement, Ive told his boss: “It’s not too shabby, is it?” There were digital music players before the iPod; they just weren’t very compelling. It’s the same with so-called smartphones, the high-end devices which, like the iPhone, bring together a diary, contacts book, internet browser, camera and music player.
Nokia, Microsoft, Palm and others have been working on this concept for the best part of a decade but, with the notable exception of Research in Motion’s Blackberry, there have been few hit products. Smartphone sales, while growing, remain a small part of the total mobile market. With most of these devices, the element of compromise is all too evident.
Or as Jobs put it last week: “The problem is, they’re not so smart — and not so easy to use.” They struggle, he said, because the same set of small, fiddly buttons are ill-suited to the many, many different tasks that smartphones ask them to perform.
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