Sunday, June 27, 2010

The iPhone Evolution and Why it's Coming Under Increasingly More Scrutiny ...

I've been thinking a lot about the release of the new iPhone and why the iPhone 4G seems to be coming under more scrutiny than past iPhone releases.

Personally, I think the Apple ‘Hype Machine’ was off the charts and while it’s a great device, its evolutionary, at best, and definitely not revolutionary. I think its 'good' but not 'great.'

Think about when a publicly traded company reports great earnings but not as great as analyst’s expected. Same concept / principle.

Let's look back at previous iPhone versions:
  • iPhone 2G (Revolutionary) - It was revolutionary and changed the game ... for mobile, for mobile devices, for carriers, and for consumers. It was the perfect combination of simplicity and technology. You saw the ad, you could operate the iPhone. Everyone, including Apple's competitors, said WOW at the same time.
  • iPhone 3G (Evolutionary) - New style, same simplicity. There were some new features but it was all about the new form factor and the 3G network. Remember Steve saying, ‘it just feels good in your hand’? He was right, it did.
  • iPhone 3GS (Incremental) - Same style as the 3G but somewhat better in terms of speed, video, and battery life but that's about it. Definitely incremental.
  • iPhone 4G (Evolutionary) - New style, better camera, better display, faster processor but many of the other features are largely related to iOS and available for free on previous versions. Note, Steve did not say, 'it's just feels good in your hands' ... because it doesn't ...
So, why are the expectations higher now for Apple? Here are my thoughts ...
  1. The iPhone 2G revolutionized the mobile world in Mid 2007. The 4G is new, but the iPhone isn't.
  2. There are other great smartphones (Motorola / HTC). They provide comparison points AND raise consumer expectations.
  3. Apple shouldn't get credit for what other devices already have / what should have been there all along. Meaning, integrated email accounts, a camera w/ flash (in a 4th generation device) is simply playing catch-up.
  4. 'You’re known by the company you keep.' Even though its not release specific, Apple should get dinged for AT&T's network quality issues. Why? Because Apple is responsible for the exclusive relationship w/ AT&T and if I spend $300 for a connected device, I expect it to work!
In short, the iPhone 2G was revolutionary. All the subsequent ones, including the 4G are not bad, just evolutionary or incremental.

This is not to say they aren’t selling a lot (they are) but 75% the initial sales were upgrades to existing customers (a/k/a Fanboys / Fanpeople) predisposed to buying anything Apple puts out. I think the above, plus more competition and an increasing issues with AT&Ts network, means that incremental change on a marginal network isn’t good enough.