Apple's big iPhone news
Posted
Jun 09 2008, 01:51 PM
by
Kim Peterson
Rating:
The iPhone is nearly a year old, and with only 6 million sold Apple isn't close to its goal of selling 10 million this year. That's about to change, because the iPhone is getting an upgrade.
And I'm not talking about just the phone itself. Apple's building a universe of applications, games and other features that could be just as important. The company is again setting a new standard for cell phones.
Another selling point: Apple is dropping the iPhone's price to $200 for an 8GB model and $300 for a 16GB version. But the biggest news of the day is a new iPhone that runs on 3G technology, which makes Web browsing much faster. The phones also have built-in GPS, which is sending Garmin shares down 5% so far. The new iPhone is due out July 11.
Apple will also boost sales by expanding the iPhone internationally. Until now, Apple has sold iPhones in six countries. But this year it's taking the phone to 70 countries, including most of Europe and South America.
Yet Apple shares aren't holding up. The stock has fallen nearly 5% at last check to $176.78. (Read Apple's stock market effect here).
CEO Steve Jobs unveiled the news today at an annual conference of Apple developers. A particularly telling slide in his presentation showed a three-legged stool representing Apple, with the three legs labeled "Mac," "music" and "iPhone." That's how big Apple thinks its iPhone will be.
Here's a breakdown of today's news:
--A fast 3G phone: Apple says the new 3G phones are twice as fast as its first-generation iPhone. An onstage demo showed the 3G iPhone loading a photo-rich Web site in 21 seconds, compared to almost a minute for earlier iPhones. It's almost as fast as a Wi-fi connection, Jobs said. The problem with 3G is that it sucks up the battery, leaving the iPhone with just five hours of talk time. The battery time for Web browsing is also about that long, but for audio the life extends to 24 hours.
--The App Store: Apple is letting outside programmers make applications for the iPhone (and the iPod Touch). The programs that win Apple approval land on the "App" Store on those devices, which is open to 62 countries. Developers set the price, and Apple takes a 30% cut. With a potential windfall like that, no wonder 25,000 programmers applied to participate. Apple has only allowed 4,000 developers in. Some applications produced so far look amazing, especially the Super Monkey Ball game from Sega.
--Apple owns Me.com: It's a pretty cool URL for a company to have -- www.me.com. Apple now owns the domain, and probably spent big bucks to get it, too. Me.com is the starting point for a new service called MobileMe that stores your information. That way, you can log in from any machine and see your mail, calendar and photos. It costs $99 a year, which includes 20 gigabytes of storage, and replaces the .Mac service.
--Cool new applications: Check your eBay auctions. Compose music on an onscreen piano. Watch real-time video clips from baseball games and check scores. The new App Store won't be just about games. There will probably be thousands of programs that people can buy to customize the iPhone to their needs. Apple's challenge will be to organize and market them all effectively.
--Beating the Blackberry: The iPhone now works with the Microsoft Exchange e-mail server, removing one of the biggest business limitations of the device. Apple also built in additional enterprise security features, so look for the company to start ramping up iPhone sales to big corporations. Will this make Apple a major threat to Research in Motion? Nah. Not yet. The BlackBerry has too much of a lock on the market and RIM is reportedly coming out with a touchscreen model in the near future. Still, RIMM shares are down slightly over 1% today to $129.53.
Here's what others are saying about the news:
Gartner analyst Ken Dulaney (via L.A. Times): "With these announcements today, [Apple is] making a statement they want to overtake Nokia."
Techdirt: "Beyond the lessons that everyone will talk about concerning Steve Jobs' strategy in launching the iPhone, the most interesting of all may be how the initial pricing structure backfired -- but was changed so quickly."
Machinist: "So, sure, there's a new iPhone. It looks quite nice, and the price sure is right. But the new hardware will matter less than what people all over the world are now building for it. If iPhone can beat Google, Nokia, and Microsoft with developers, well, that'd be big."
Silicon Alley Insider: "The 'app' portion of today's presentation also illustrates that the iPhone is well on the way to becoming a popular development platform, and, for platforms, market share is far more important than profit per unit. For the long-term, therefore, today's Apple news was good."
Web Worker Daily: "While WWDC is a developer conference, the usual runaway rumors had many people hoping that there would be revolutionary announcements from Apple that would make our lives better. Even the legendary Apple 'reality distortion field' couldn’t keep many people happy, to judge by the grumblings I heard from many of my Twitter contacts."
Disclosures: I don't own shares of any companies mentioned in this post. And while Microsoft owns this blog, Microsoft does not control, censor or otherwise have any editorial influence over what I write.
Related reading:
New BlackBerry coming. iPhone who?
Preposterous but true: Apple's worth more than Citigroup
Reining in hype for the new iPhone
Solar-powered iPhone?
iPhone a huge boost for Broadcom
