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Wireless Utopia

The journey towards a free wireless world.

iPhone: A Niche Product

Saturday, January 20, 2007

The hype created by the launch of iPhone has been amazing. Almost everyone has written about it and going by the gushing, it is already a hit in the market. Without being launched yet or a dollar being spent on the marketing! A testimonial to the brand called Apple (read Steve Jobs). The Apple brand is strong and in very good health.

But whats being missing in all what I have read till now is the reason why Apple was forced to cannibalize it most successful product: the iPod. There must have been a very good reason. The tipping point, it seems, has been recent success of music phones. Music phones have been doing very good business lately. I myself bought a music phone, with a FM so that could listen to music and have to carry only a single device. And the iPod has been suffering. Yes it been selling, but the sales growth has reached a plateau. For a very nice and detailed analysis go here. Makes a lot of sense.

The success of iPod and iTunes had started to threaten the mobile phone industry. For them the world is and should be converged on a single device: the phone. The iPod was about divergence. They had to make their move and music phones were launched. Just like iTunes, they also started building content delivery backends. Nokia acquired LoudEye just to force Apple's hand. And finally the MEN's (Motorola, Ericsson, Nokia) of this world have got Apple on their own turf.

But as with Mac and iPod the iPhone will never be a mass market product. It will be niche product for people who have the buying power and brand loyalty. The music phones will always outsell it. If ever Apple does go the mass market route, the battle will be something to watch out for. It would be difficult to beat the incumbents. But then, they are Apple.

The wheel finally has turned a full circle. It was Sony which had introduced the concept of music on the go. Apple took the concept to the digital age. Now with its Walkman phones, Sony Ericsson has reclaimed its glory.

Bonus Link: Dont miss this ad of the Sony Ericsson walkman phone. I absolutely love it. Note how the world "love" is never used in it. And how in the end the guy says hello, to emphasize that it is a phone. Wonderful.

Tags: iPhone, iPod, Apple, Musicphone, Mobile, Music, Sony, Walkman.
posted by Rajiv, 9:25 AM


What they always forget to mention: Who needs an iPod with just 4 or 8 GB, even when it can make phone calls? My 5th generation iPod has 30 GB and is always full. I regularily download so much music (podcasts) that deleting MP3s is yet quite a lot of work. What would I do with an iPhone with just 4 or 8 GB?

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