Entries RSS · iPhone 3G, enterprise and the importance of mobile operator
Okay, I was wrong at least on one count. iPhone 3G will hit Finland and pretty much everywhere on 11th of July and I wasn’t expecting it before September. Other than that, I still agree with my previous posts about iPhone (before European launch and after it) and smartphones in general.
One thing to keep in mind is that iPhone 3G is still mostly hype. It’s not available yet so we are seeing just Apple’s marketing material and also I’ve no idea for example what my operator’s (TeliaSonera) plans will looke like. As I’ve written in my previous posts, I still expect carriers to earn premiums from internet access fees. In the US, we already saw that the 200 USD price reduction was more than balanced out by a 10 USD increase in AT&T’s data plans.
The fact that iPhone 3G will be priced at maximum 199 USD is meaningless. I can get a Nokia N95 for (the law-mandated minimum of) 1 euro and the USD/EUR exchange rate isn’t that bad yet. Comparing iPhone’s max 199 USD subsidised price to other, unlocked, smartphones is worse than comparing apples to oranges (or, as someone might say, lemons). I can only assume that for some reason, in the backwaters of mobile world (aka the US), iPhone is the only subsidised smartphone available. Otherwise, for example, this post announcing the death of smartphone market doesn’t make any sense. As I’ve pointed out time and time again, the mobile markets are totally different around the world. The main reason for this is the mobile operators who have quite total control of the whole value chain. I think Apple would really love to learn couple of their tricks.
I’ve found it strange that many U.S. websites somehow say that iPhone “killers” and its competitors are some never-heard-before handsets – and the only apparent similarity is that they happen to have “touchscreen”. I’m pretty sure Apple isn’t worried about these also-rans because I’m guessing they’re not in the same markets Apple is aiming the iPhone 3G at. The first market is the normal enthusiasts market Apple sold the 1st generation iPhone to. This is the market where “cool”, features and such are important. Compare to how Apple markets iPod. This is why iPhone 3G has 3G, GPS and 3rd party apps.
The second market is “enterprise”. Steve Jobs spent a long time talking about how iPhone 3G and Fortune 500 companies are best friends forever and for a reason, the first major critical backslash to 1st generation iPhone was that it wasn’t “business-friendly”. This market is now dominated in some countries by BlackBerries and in some other by Nokia’s E-series. This is why iPhone 3G got Exchange and Office document support.
Unfortunately, the latest (and in my opinion, misguided) trend in corporate IT is “mobile device management”. See, for example, Nokia’s Intellisync. Fortunately, most companies’ IT systems are so vendor-locked-in that it’ll be years before they can even dream to get anything beyond Exchange to mobiles, so this doesn’t really matter. But, the control-freak nature of corporate IT means that iPhones aren’t still “enterprise-ready” unless they can (if they wanted to) lock the user out of using iTunes-functionality of an iPhone.
Anyway, let me reiterate the numbers: “Smartphones” make about 10% of the global mobile handset market. About 50% of this belongs to Nokia and Apple is third with appx. 7%. 18,5 million Symbian phones were shipped to consumers in Q1 2008 alone. Also, Nokia makes most of its profits from its low-margin phones.
Don’t get me wrong, I have nothing against the product itself. My main point is that it is easy to fall for all the hype and marketing fluff going around. It is way too early to call Nokia, RIM, Motorola or Samsung irrelevant and my guess is that Nokia will still lead the market – their current volume is just so huge. Apple is no doubt one of the big boys, but one of the reasons is that the market isn’t that big to begin with. But there’s nothing wrong with that, as this is exactly how Apple operates with its laptops. Its niche there is the high-end, high-margin, over $1000 USD laptops – a niche it has a nice 66% market-share in.
So, iPhone is one of the phones I’m considering now that my current plan runs out. The problem isn’t iPhone as a product. The main barrier is my mobile operator, which in addition to sucking also charges pretty nicely for data – and without internet access, why would I want an iPhone? I already got a mobile phone and an iPod and in their normal use, I couldn’t care less about things like UI or touchscreen (which would mostly touch my pant pocket). It’s the other functions that make iPhone great. For me, it’s the mobile operator who makes or breaks iPhone and also the reason why I don’t see Apple ending its exclusive deals anytime soon.
All the smartphones, and especially iPhone 3G, are designed for a world where the cost of internet access is not relevant. The only people living currently in that world are business users. Do not forget that the true clients of phone manufacturers are the operators themselves and it could be argued that the true function of their phones’ features is to make “value-added” profit to the operators. Want to guess why iPhone’s Bluetooth is still crippled?
PS. And seriously, many of the “innovative” applications of iPhone have already been done for the Symbian like ages ago. For an example, see how many people have suddenly reinvented Jaiku Mobile et al. True, it doesn’t really matter who does it first, but who does it best.
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Interesting to see that you’re now open to the iPhone. I imagine that many people are starting to feel this way, of course depending on how much the monthly fee will actually cost. €300 for a 16GB iPod is about the price I paid 3 years ago for my 20GB and seems fair, if the monthly fees are not much higher than I am paying now (around €20, but w/o data).
But the ultimate decider for the traditional smartphone user, will be the enterprise-compatibility, which will take some months, maybe years to sort out 100%.
Well, it looks like they mixed some of the major flaws and the pricing seems to be okay. But all is subject to change once the reality hits in July.
The thing is, I’m expecting my operator to really milk the early adopters.
can iphone 3g support other mobile operators? (like mtn)
or must only use at&t(i am live in asia)
“Also, Nokia makes most of its profits from its low-margin phones.”
Curious as to where you found out about this. Is there a ref source? Nokia reps had previously said that the company usually makes the most from high-end models, and the low-end ones are just released to fill up the market.
Unfortunately I can’t remember where I read that from, but I agree that Nokia probably makes the best margins from high-end models. The thing is, even with low margins, the bulk of Nokia’s bottom line comes from sheer volume of those cheap phones. The difference of market sizes is the key factor here.
the iPhone 3G looks very cool and feature packed. i will be saving some of my allowance to buy that phone.