VAW: Will Apple's iPhone Replace the iPod?

Rumors of the impending release of an Apple cell phone called the iPhone in early 2007 are flying fast and furious all over the Internet. Some of these tantalizing rumors appear to be coming from Apple Computer, but most appear to be speculation from the typical user-based rumor mill. The thought of an iPhone is causing a great amount of speculation and excitement in the Macintosh community and is scaring the over-heating G4's out of companies like Motorola. Apple has a remarkable opportunity to exploit an untapped market. If they don't release an iPhone soon, their hold over the digital media market will be shaken loose by Microsoft, which has throughout its existence feed off Apple's innovation. Apple has the technology, but does it have the foresight to see it through? The iPhone could end up being a remarkable device, encompassing the multimedia capability of the iPod with the prowess of a PDA, all in one convenient package that is, by the way, a cell phone too.

Apple was an early pioneer of the personal digital assistant (PDA) market with the release of the Newton MessagePad in 1993. The MessagePad was a remarkable personal organizer that was compatible with PCs and Macs. It ran the Netwon operating system and featured handwriting recognition software. The Newton was intended to be a reinvention of personal computing, similar to a modern tablet PC. Apple offered up successive models of their Newton-powered PDA until 1998. Unfortunately, Apple mismanaged the Newton line of products. Newton suffered from feature creep, product slippage, and began to interfere with other Apple product lines, most notably the PowerBook. Steve Jobs finally killed the Newton in 1998, shortly after his celebrated comeback. Other companies, such as Palm, have gone on to successfully exploit and expand the PDA market.

In 2001, Apple introduced the world to the iPod. As much to the success of the iMac and OS X, the success of the iPod pulled Apple back from the abyss and created a cultural phenomenon similar to the affect the Macintosh had on the computer industry in the 1980s. Macintosh represented a revolution in the way average people without special training used computers. It took Microsoft nearly ten years to copy many of its features. It was not really until the introduction of Windows 2000 that Microsoft closed the technology gap.

Apple reacted to this Windows threat with OS X and once again, the gap is beginning to widen. Apple's incorporation of Steve Job's NeXTStep OS with MacOS has pushed the Macintosh platform years ahead Microsoft, which is experiencing considerable difficulty responding with their implementation of Vista. Vista, Microsoft's next generation operating system, is years behind schedule. Windows XP, Microsoft's candy-coated implementation of Windows 2000, is still the standard in the PC world. I use a Windows XP laptop every day at work. Scarcely a day goes by that I don't find myself mumbling under my breath, "I hate Windows." Its many irritations are too numerous to list in this article.

Windows 2000 is in many ways more stable than classic MacOS, but its interface is a bad copy. Microsoft copied the heart of MacOS, but forgot to include its soul. Now, Microsoft is at it again. The "Johnny-come-latelys" in Redmont are about to carbon copy the iPod just like they did MacOS. Unfortunately, just like the awful interface inherent in Windows, I doubt Microsoft will get right. Zune will be a flawed product produced by a company that lacks innovation.

Microsoft's key problem is its lack of innovation. The problem lies with their business model. They tend to suck the wind out of competitors through their considerable industry influence. When trends turn against the giant, Microsoft reacts with the crushing force of a robber baron, using their near monopoly power to copy and abate the threat. Numerous examples of this practice can be sighted including the obliteration of Netscape with Internet Explorer, Lotus with MS Office, and Nintendo with Xbox. Now they have set their sights on iPod with Zune.

Given Microsoft's problem with wet paper sacks and their inability to innovate their way out of one, most pundits will find Zune to be lacking. But the disappointment of consumers and pundits alike hasn't stopped Microsoft in the past. This threat represents a serious challenge to Apple's dominance of the digital hub.

I believe the iPod's days to be numbered. The iPod will carry on in some form or another, but the route Apple needs to go is obvious. The iPod must become the iPhone. Just like the Blackberry's crushing affect on the Palm Pilot, a similar device encompassing the ingenious interface of the iPod with the convenience of a cell phone and the prowess of a PDA, will eventually dethrone the iPod. Apple must be the company to develop this device or they will lose the market they created, just like the debacle of the graphical operating system wars in the 1980s and 1990s. Consider what is going to happen to Apple's digital media market share with the knowledge that the Microsoft copy machine in Redmont has just added a new toner cartridge filled with Windows-integrated Zunes. Apple must innovate or risk losing momentum. They are facing a shrinking market share. Today, most PDAs are in fact cell phones, but today's cell phones don't measure up to iPod in terms of multimedia, ease of use, and insanely-great coolness.

Apple needs to once again "create" a new market, just like it did with the Macintosh, the Newton, and the iPod. That is where the iPhone comes into the picture. The iPhone represents a huge untapped market. I have a cell phone but I don't own an iPod. Why? Because I need a cell phone every day. I would like to have an iPod, but just don't want to bother with carrying around two devices. My cell phone also acts like a quasi-PDA, even though it is not a Blackberry. If Apple were to combine the iPod with a PDA and offer it up as a cell phone, I believe that many fence sitters would go to Apple for their next cell phone provided Apple is careful to court the big telecom companies like Cingular, Verizon, or Sprint, and as with the iPod, make it Windows-compatible.

Apple could saddle this device with PDA technology like that of the Blackberry. Apple's innovative software team has the potential to create the greatest PDA ever known. Apple could sync the device with iCal, Apple Mail, iPhoto, and iTunes. The possibilities are endless. Apple knows how to create one heck of a PDA. Newton fans would be brought back into the fold. For years, industry pundits have speculated about the possibility of Apple releasing the iWalk. Perhaps, Apple already has the technology and is waiting for the right market conditions to make it a reality.

The iPhone will eventually replace the iPod and just when Zune begins to take market share away from the digital media market Apple created. Microsoft will once again have to turn on the Redmont copy machine, but it will probably take them another five years to close the gap and exploit another Apple-created market.

Comments:

Apple already has iTunes running on cell phones and PDAs are already incorporated into cell phones like the Blackberry. What is an iPhone going to do that isn´t already done by these devices?

David C. on Thursday, October 05, 2006 at 12:19

iTunes Mobile is available for Cingular cell phones. Check out:

www.apple.com/itunes/mobile/

But still, I think Apple hardware would be far superior. Software is only one side of the puzzle.

J.T.W on Thursday, October 05, 2006 at 12:36

Zune will be better than the iPod because Microsoft always improves Macintosh technology when they copy it. Look at how superior Windows is to OS X.

Check This Out on Thursday, October 05, 2006 at 12:40

I couldn´t agree more that the iPod´s days are numbered but it has nothing to do with the arrival of the iPhone. The truth is that the iPod is an inferior product that will be pushed aside by competition. Sure Apple has had their day in the sun by being a first mover with the iPod but they are now on the tail end of the product life cycle. And if you need proof here´s a simple example; google "iPod error" and enjoy all the listings. You´ll see known issues with iPods that Apple refuses to address(eh, unless its under warranty). If you want to buy 2nd rate product that have misguided customer loyalty then have at it. I on the other hand will be purchasing a Zune.

btw, no relation to the author of the article.

Larry Rowe on Thursday, October 05, 2006 at 19:03

>Zune will be better than the iPod because Microsoft always improves Macintosh technology when they copy it. Look at how superior Windows is to OS X

This guy must be stupid. If Windows is so superior to OS X, then why are there all of these holes in the software, and why does it always crash? I know Windows is like this because I have some at my school. They are always off, because they crash.

>I couldn’t agree more that the iPod’s days are numbered but it has nothing to do with the arrival of the iPhone. The truth is that the iPod is an inferior product that will be pushed aside by competition. Sure Apple has had their day in the sun by being a first mover with the iPod but they are now on the tail end of the product life cycle. And if you need proof here’s a simple example; google "iPod error" and enjoy all the listings. You’ll see known issues with iPods that Apple refuses to address(eh, unless its under warranty). If you want to buy 2nd rate product that have misguided customer loyalty then have at it. I on the other hand will be purchasing a Zune.

You must be kidding me. Windows does not have that innovative spirit in order to sell those "Zunes."
Zune is such a weird name. Their reputation sucks too. Btw, have you ever had an iPod? You must not have because I do. I have ZERO problems with mine. Maybe those "problems" only happen on a Windows computer, like everything else. You can google "windows errors" too if you´d like.

Evan C on Sunday, October 08, 2006 at 01:35

The iPod is running out of steam. If Apple doesn´t do something soon, Zune will take part of their market, which is a shrinking market.

Terry on Wednesday, November 15, 2006 at 10:37