Apple should pull the plug on the iPhone – MarketWatch

Apple should pull the plug on the iPhone – MarketWatch

Here’s what I think of John Dvorak’s column. First of all, I’m an admitted Apple fan and I’m an admitted John Dvorak fan. Granted that Mr. D is not on my desktop at home, but I do listen to him on Cranky Geeks and TWIT (for those of you not keeping score, admitting this in front of an Apple fan is like telling )

Here’s my counter to his points:

The first half of Mr. D’s (in quotes and in gold below) article are an overview of Apple’s iPod success and general ad 101.

“The problem here is that while Apple can play the fashion game as well as any company, there is no evidence that it can play it fast enough. These phones go in and out of style so fast that unless Apple has half a dozen variants in the pipeline, its phone, even if immediately successful, will be passé within 3 months.”

Here’s the differentiating factors. Form Factor and New Features via Software.

Form Factor: All manufactures have multiple devices with multiple choices in buttons and screen sizes. Reason being you want to make as many people happy as you can. Here Apple has taken away the need to make multiple form factors. They will come out with other phones, but they won’t veer far from a no button form. Simple is best.

New Features via Software: Okay, quick, who can tell me the difference between each version of the Razr, Rizr, Slivr, Q, Ming, and Pebl? That would be each version of on each carrier, world wide? Go…. and stop. Okay, what are they? I couldn’t tell you the Q has Windows on it. Did you know you can’t touch the screen!?

Mr. D has a point in saying that Apple can’t come out with a new phone every 3 months. And they won’t. The will come out with must have features perfectly integrated with the service. That’s the way to be. I won’t need to buy a phone every 6 months, but I might pay for a new feature. Or I might use the carrier’s service more often if it’s perfectly convenient.

“There is no likelihood that Apple can be successful in a business this competitive. Even in the business where it is a clear pioneer, the personal computer, it had to compete with Microsoft and can only sustain a 5% market share.”

Agreed. They can’t sit on their merrits. And thanks for giving a shout out to Apple for being a “clear pioneer”. Come one Apple fans, he really does love us!!!

“And its survival in the computer business relies on good margins. Those margins cannot exist in the mobile handset business for more than 15 minutes.”

What sort of margins does Apple have in the iPod business? I think they buy into the market and make the margins later. The price on the iPhone WILL drop. but thier cost will too. Keeping form factors to a minumum and maximizing a solid platorm will keep ongoing design and part costs down.

“And note that the Microsoft Corp. versus Apple battles are laughable compared to the frenzied marketing mania in the handset business. Even Microsoft itself has troubles with its attempts to get into a small sub segment of the handset business with its operating system.”

Here’s where I have to say…. well… er…. umm….. IT’S APPLE BABY!!! Apple will chip away at some market share, but it doesn’t have to own the entire market. It doesn’t in PCs yet it’s not throwing that business away and concentrate on iPods. Plus, it’s really competing with the likes of Blackberry. Blackberry!? Yes some tiny company from Canada has captured hearts and minds away from huge companies like Nokia and Motorola. Korean manufactures are doing great here. Who had a Samsung phone 10 years ago!? But that’s the thing. No one single market leader in phones; which means there is always room for one more.

“What Apple risks here is its reputation as a hot company that can do no wrong. If it’s smart it will call the iPhone a “reference design” and pass it to some suckers to build with someone else’s marketing budget. Then it can wash its hands of any marketplace failures.”

“It should do that immediately before it’s too late. Samsung Electronics Ltd. might be a candidate. Otherwise I’d advise you to cover your eyes. You’re not going to like what you’ll see.”

First of all that would not be pulling the plug on the iPhone, just outsourcing design and manufacturing. We already know they don’t actually have Apple factories making iPhones or iPod for that matter.

Besides, Apple was turned around when it got rid of clones and kept software and hardware tightly integrated to perpetuate it’s stellar design in both areas. Ask an Mac fan or a iPod fan what they like about the Apple experience and it will come back to smooth integration between SW & HW.

That’s just my opinion, but I could be wrong.

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