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Technology Thoughts

iCrystal iBall gazing with the iPhone

So, the iPhone has launched in the UK… to a somewhat mixed reaction.

Since there have been no official announcements yet about sales numbers, iCan (sorry) still gaze in to the future, with my thoughts and predictions for the future of the device:

  • Apple now have a whole legion of dedicated fans locked into an 18-month contract… so can we take this to mean that we should expect the iPhone version 2 in April 2009, or will they risk alienating the early adopters?

    This schedule does roughly fit what Apple is used to in terms of other hardware and software upgrade cycles.
  • If, however, the iPhone sells below expectations in a given area of the world (see below), then will they dare update anything sooner?

    Even if they try to pull a Mac Mini-style “let’s update the machine but not tell anyone”, any changes will become known immediately. In actuality, there’s probably little initial downside for Apple – the loyal legions would probably buy a second iPhone mid-contract for features with any perceived value. Where Apple must now learn to tread carefully if with the mobile phone retailers and networks, who will want monied customers buying new phones with new contract from them, not directly from Apple.
  • On this note, how hard will Apple fight to prevent phones being unlocked?

    At £269 (or $399, making the UK iPhone price $80 or 20% higher than the US price, even accounting for VAT/Sales tax) – the same price as a 16Gb iPod Touch – the iPhone is quite an attractive deal. At £900 ($1882 – the same price as a 24″ iMac with wireless keyboard and mouse and iLife ’08 pre-installed!) over 18 months, though, this is one of the least appealing mobile phone offers I’ve seen in a long time.

    The option to buy directly from Apple without a contract and then unlock the phone, at this price, is too attractive to ignore. Even though Apple takes a cut of the contract payments from the network, can they really afford to get into an arms-race with the people who just want to use their phones on their current network and tariff? Will Apple really start producing frequent (fortnightly?) firmware updates, just to prevent people from unlocking the device? With so many sales going to unlockers, dare they close off this source of revenue by permanently locking the iPhone – and would this achieve much other than alienating customers? They should already have recognised the warning-shot in this area by the reaction to the issue of bricked iPhones after the first firmware update…
  • Will iPhone sales illustrate the immaturity of the American mobile phone market? Whilst Americans seem to be resigned to unsubsidised phones, expensive contracts, and patchy coverage this all appears to be a return to the dark ages for most Europeans. The decision not to re-engineer the phone to run on 3G networks will likely remain a bone of contention, as EDGE was never widely deployed – and has now been so thoroughly surpassed by 3G that any operator rolling it out now would be doing so purely for iPhone users. Is this really a cost that the networks will be willing to bear?

    (Yes, in the UK O2 did already have a pre-existing EDGE network. But then, they also deployed iMode at a cost of over £10m only to draw in fewer than 250,000 customers. This service was itself cancelled it within two years.)

More to follow…

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