The iPhone Platform Comes of Age
News Analysis. The iPhone is no longer a mobile handset. Today, Apple announced its transformation into a truly mobile computing platform. |
Apple showcased iPhone 3.0 OS at an event on its Cupertino campus, starting around 1 p.m. EDT. For years, people have said that it takes Microsoft three tries—version 3.0—to get a product right. Maybe that axiom should apply to Apple, too.
Apple previewed some of the 100 new features and promised 1,000 new APIs. The new features and APIs will let developers tap deeper into iPhone OS and extend capabilities outward. More importantly, iPhone 3.0 promises to extend what developers will be able to do with their applications, such as better tap into location-based and mapping services, offer in-app purchases and make available peer-to-peer gaming. Other mobile operating systems already offer some of the new capabilities, so Apple is playing catch-up as well as extending the platform.
If the promises Apple made today bear out—and it's not always immediately obvious because the marketing hype is so thick—iPhone will become the next-generation computing platform developers have been waiting for. Whether or not that platform succeeds depends on many factors. Among them:
- How Google, Microsoft and Nokia shape up their mobile platforms in 2009-10
- How many marketshare-leading handset manufacturers adopt Android (HTC just announced three more Android handsets)
- How quickly Apple can expand its iPhone OS install base—and that includes iPod touch
I didn't attend today's Apple event; my eWEEK colleague Chris Preimesberger, who works in San Francisco and, therefore, is more local to Apple, has the heavy news duties. I'm doing armchair analysis from San Diego.
Today, I'm the Twitter journalist, which is a new role. I've never covered an event remotely relying on Twitter. The advantage: There are multiple confirmed sources, and the tweets are from people you know. Michael Gartenberg and Don MacAskill were my favorite event tweeters.
Dispelling Urban Myths
Before continuing, I must dispel an urban legend that Apple launched a preemptive strike against Palm. Today's iPhone 3.0 event wasn't about Palm Pre. I've read lots of bad armchair analysis about how Apple is trying to get in front of Pre. What planet are you people living on? The Pre isn't that exciting or innovative, and it's not even shipping. Meanwhile, according to Gartner, Palm smartphone shipments are free falling. Pre is no threat to iPhone, certainly not yet and probably never.
Apple held a similar event a year ago for iPhone 2.0. If Apple wants to release new iPhones annually, now is the right time to get beta software and new SDK in developers' hands. Apple isn't sweating the soon-to-be-released Pre. People, get a life! More importantly, Apple has mobile developer attention, which it must reignite before the fires still. App Store is a wonderful innovation, but it's not enough. Developers need an even better platform, with more exposed APIs, to build on. That's what Apple showcased today.
So, the event: In absence of convalescing Apple CEO Steve Jobs, Greg Joswiak, Apple's veep of iPod and iPhone marketing, took the stage. I've often felt that Greg hasn't gotten the kind of exposure he or Apple deserves. He's handsome and likable and commands good presence. Greg is often press frontman, but he doesn't get enough exposure at events like this one. With Steve on leave, Apple needs to put its best executives forward. Greg is among the best.
Not to quibble with Greg, but I must. He touted the same sales figure as other company execs. Apple didn't sell 13.7 million iPhones in 2008. It shipped that many. According to Gartner, Apple sold 11.4 million, for worldwide marketshare of 0.9 percent.
Whoa, 0.9 percent marketshare! Break out the champagne. Yes, yes, I'm a sarcastic bastard. But Greg also claimed more than 30 million iPhone OS devices sold, about 17 million iPhones (minus inventory, which Greg didn't say). Oh? Now that's more exciting and means that Apple has sold at least 13 million iPod touches. The software may be called "iPhone," but it's iPod touch that gives the platform broader reach.
Defining a Good Platform
The iPhone platform is shaping up handsomely and with all the right stuff. All successful computing platforms share common attributes:
- They have at least one killer application people really want
- They make available a breadth of useful applications
- Development tools and APIs make it easy to create good applications
- Third parties make lots of money
The iPhone meets all these criteria and, from a developer perspective, all the more with version 3.0. But Apple has an advantage over all other mobile platforms and something not really seen since the early days of DOS/Windows: A unified platform. As I explained last month: Rather than there being multiple mobile OS versions, further fragmented by carrier distribution, Apple controls and distributes the updates. There is one iPhone OS version for all devices, and new updates are immediately available for all iPhones regardless of carrier. BlackBerry, Symbian and Windows Mobile are hugely fragmented mobile operating systems. Android is moving that way.
Compelling: Greg claimed that 62 percent of iPhone developers are new to Apple. More may line up for iPhone 3.0. Michael tweeted at the end of the event: "Bottom line? A good evolutionary update with some revolutionary elements. Developers have the potential to really raise the bar."
That's the whole point of a good platform. Developers make magic from the tools.
What Makes iPhone 3.0 Exciting?
Apple revealed many new platform features, the kind of stuff that really excites developers. Among them:
Accessory connections. This one capability is platform changing. It's will put iPhone on par with Windows PCs and Macs. Hardware will now be able to connect directly to iPhone through the connector and via Bluetooth. Apple should have had this capability in iPhone 2.0. The capability should be good for "Made for iPod" accessories to start and better as manufacturers release hardware iPhone or iPod touch can control.
Embedded maps. Developers will now be able to embed maps in their applications, which will be huge for mobile services, but others, too—like photography.
Don tweeted: "Yes! Finally! Can embed map application in our own apps now." He is CEO of photo-sharing service SmugMug, which was an early iPhone developer. More broadly, SmugMug offers mapping/location services that could be extended to and from iPhone.
Subscription services. Developers will be able to offer subscription apps. This is a hugely important change and should silence analyst naysayers asserting that most apps can't make money. They can, if people pay on an ongoing basis.
In-app purchases. This capability and subscriptions are two sides to a coin. From within an application, the end user could purchase additional game levels or in the case of a city guide additional city maps. Developers can better sell their stuff where people are most likely to buy it (in the app) and iPhone users don't have to search the App Store.
Peer-to-peer connections. This is a way-late capability that is both catch-up and category extending. Developers can enable apps to connect peer-to-peer via Bluetooth. So much for the Zune Social or Nintendo DS wireless gaming. If you and your buddy have got iPhones or iPod touches, you've got game.
Push notifications. Promises. Promises. Apple promised this capability a year ago. It's coming at last and as substitution for background running apps. During today's event, Scott Forstall, Apple's senior veep for iPhone software, claimed that background apps too quickly drain battery life. Standby time dropped by more than 80 percent with one instant messaging application test by Apple.
By using Push, there need not be a persistent running application or connection. Ian Betteridge tweeted: "Push notifications = only 23% battery drop. Joy! I'll only have to keep my #iPhone plugged in 16 hours a day! ;)" In a blog post, he called the 23 percent percent battery reduction "a canard."
I would still like to see a better battery and one that is removable. My daughter is using a Nokia E71, which has a huge battery and big battery life. She leaves AIM open seemingly all the time and manages just fine. Push is late and it's make-do. Developers need it, but that shouldn't.
Smartphone Is the Smarter PC
Apple's timing for maturing iPhone is exactly right. I've repeatedly asserted that the mobile phone will replace the PC as the primary computing device used by most people—and it's always on, too. Yesterday, comScore revealed that comparing January to January, more than twice as many people accessed the Internet from the mobile handset—24 million among the mobile Internet audience of 63.2 million.
On Sunday, Gizmodo's Jack Loftus made this observation about this week's South by Southwest conference in Austin:
The tech and media savvy hipsters currently at SXSW could very well be a snapshot of things to come. The conference is chock full of smartphones, but there's nary a notebook (or netbook) in sight. It's anecdotal evidence, sure, but these folks are undoubtedly ahead of the curve on technology. And what they're saying is they're more comfortable using mobile devices as a primary computing and communications tool than they are with notebooks, or even netbooks.
The mobile phone's future is inevitable. It's not a question of if but when it replaces the PC, and there's still the unanswered question which device/platform becomes the de facto developer/content/consumption standard like Windows is for PCs. Apple is bringing some of the best development attributes of the personal computer to iPhone and priming the device to make a plausible grab for PC's crown.
Perhaps Michael best summed up the most compelling aspect of today's iPhone 3.0 preview event. He blogged: "The breadth and depth of the apps that Apple demoed showed capabilities that would simply be impossible on other devices and platforms at the moment."
[Please send your tips or rumors to watchtips at gmail.com.]
Related Posts:
- Will iPhone 3.0 Spoil Microsoft's MIX?, Microsoft Watch, March 17, 2009
- Will iPhone 3.0 Be Green for St. Pat's Day?, Apple Watch, March 13, 2009
- Apple's Smartphone Ranking Declines, Apple Watch, March 11, 2009
- Windows Mobile Fights for Survival, Microsoft Watch, March 11, 2009
- iPhone's Mobile Marketshare Is Tiny, Apple Watch, March 9, 2009
- Apple, Don't Buy Into Netbook Hype, Apple Watch, March 9, 2009
- 'There's an App for That', Apple Watch, Feb. 18, 2009
- Barack Obama's BlackBerry Effect, Apple Watch, Feb. 11, 2009
- Will the TG01 Do Windows Mobile Right?, Microsoft Watch, Feb. 3, 2009
- Microsoft, Invest in Games, Mobile and Search, Microsoft Watch, Jan. 29, 2009
- Is There Life After iPhone?, Apple Watch, Jan. 20, 2009
- The Mobile Internet Is Now, Not 2020, Microsoft Watch, Dec. 19, 2008
- Joe's Holiday Picks: Cell Phones, Microsoft Watch, Dec. 14, 2008
- RIM Puts Apple in Its Place—Third, Apple Watch, Dec. 4, 2008
- N97: Nokia Strikes Back, Apple Watch, Dec. 2, 2008
- Will Your Next PC Be a Smartphone?, Microsoft Watch, Oct. 31, 2008
- Is This Any Way to Launch a Platform?, Microsoft Watch, July 14, 2008
- Do IT Simply with Sync, Microsoft Watch, March 11, 2008
Comments (9)
I enjoy your posts Joe.And i agree that Apple still has a long way to go.For instance it had a overall cell share in 2008 of .9%.Check your post after the discussion of total cell market that you published prior to the smart phone release by Gartner.In my comment i noted that they failed to reach the stated goal of 1% of total cell sales in 2008.They were above 1% in q4 but not for the year.
Posted by Pablo | March 17, 2009 6:58 PM
Wrong, Pablo: http://www.mobileburn.com/news.jsp?Id=6191
Research firms provide "estimates." They base their numbers using statistical formulas which use relatively small, publicly available numbers randomly sampling "segments" of the marketplace.
One firm says .9%, another says 1.2%, another says 2.0% -- they all admit their numbers are ESTIMATES with a plus/minus factor.
Apple has stated to the SEC that they have never had more than 4-5 weeks of inventory waiting in the channel for the iPhone. But according to the dummy who thinks Apple splits rev with developers 70/30, Apple stuffed 20% of annual sales into the channel over that same time -- despite federal filings spanning 6 quarters to the contrary. Or maybe Joe isn't that bright, and Gartner can, at best, provide a guestimate.
Posted by Tim | March 17, 2009 7:33 PM
I strengthen my comment: their COO said in October that they had 2 million in inventory.Aside from the first month of sales of the 3g 3g and possibly December they never have been close to that level in a month.Thus in October the 2 million represented more than 5 weeks inventory.If they made the 1% level in 2008 it was by the hair of their teeth.I do not believe that they made it but admit that since Gartners estimate is .9% it is very close.They certainly were not more than a litttle above that .At Gartner or other estimates give the cell market was 1.2 billion in 2008.So they needed to make 12 million.
Posted by Pablo | March 17, 2009 8:45 PM
What is it with this unhealthy obsession with marketshare? Do profits not matter anymore? Sure, Dell sells tons more PCs than Apple sells Macs, but Dell recorded a mere fraction of the profits Apple did last quarter!
What's your point Pablo? That it's better to sell more and make less money? Apple only cares about marketshare ONLY IF IT ENHANCES PROFIT. This is a Business 101 concept that few seem to be able to grasp.
Secondly, Joe, I understand your niggling over shipped vs. "sold" but you still have it wrong. So you say there's a 2 million unit discrepency between what Gartner reported vs. Apple's numbers?
Let me ask you this. Do you think Apple shipped 2 million iPhones to the likes of AT&T and O2 gratis? "Pay us when someone buys it from you?"
When Apples says it sold 13.7 million iPhones in 2008, it means it banked revenue on all 13.7 million. It's not in the business of reporting AT&T's activation numbers or giving them free iPhones and getting paid after the fact. This, your point is pointless because it's all about banking profit so that it can fuel the next generation of hit products, which few in this industry seem to understand
Posted by Lava | March 17, 2009 9:52 PM
How does Gartner determine how many have been sold vs shipped, not just of iPhones but of anything? I've been unable to get their methodology from them or anyone else.
In this case, Apple said iPhone channel inventory was about 2m on Sep 30. In the Jan conference call, Apple said they actually sold 250k more than they shipped in their 1Q09, which means that channel inventory went down to about 1.75m. Gartner claims that channel inventory is about 2.3m. Who is more likely to be right? Apple, whose filed statements and Conf call comments are reviewable by the SEC, or Gartner, who is simply making estimates?
Posted by mark | March 17, 2009 10:03 PM
Remember the 2 million shipped for inventory is not just AT&T it's for the whole world. And yes, you can believe Apple got paid for those up front. And you can also believe that AT&T and others wouldn't keep accepting extra inventory if they thought for one second that the phones wouldn't actually sell.
And when Apple brings out a new phone in the summer, the inventory/sales will go way down as they phase out the old model and phase in the new. And all the Apple bashers will be saying that is the sign of the iPhone Applecolypse.
Posted by Synthmeister | March 17, 2009 11:51 PM
I, for one, am very interested in the Palm Pre. I don't have a smartphone yet, but when I do get one (in a year's time), it will likely be a Palm Pre. To me, it's a very exciting product with a very sexy interface. And nice hardware.
My short list includes: (1) Palm Pre; (2) Android; (3) BlackBerry; (4) iPhone. In that order. It does NOT include WinMo.
I think Joe is wrong. Yes, current Palm smartphones aren't selling well, but the Palm Pre could be a game changer, depending on how well it's implemented and marketed.
Keep the faith.
Posted by Richard | March 18, 2009 9:18 AM
Just a few comments:
My two cents.
Posted by Clark G. | March 18, 2009 11:23 AM
You know Joe, one significant thing Apple is not addressing is "itunes-free" sync for business users, who prefer to plug their iphones into their work computers and it just syncs with Outlook without itunes popping up. That is the single biggest thing I miss from Windows Mobile - the complete lack of intrusiveness in Activesync. Even if they don't give an itunes-free solution, it is a no brainer to give us the option of making it completely unobtrusive such as a background mode.
Posted by Dej | March 18, 2009 12:08 PM