Mac Musings

The High-end iPhone: How Apple Could Grow a New Market

Dan Knight - 2006.11.15 - Tip Jar

Low End Mac Reader Specials

Memory To Go Special: MacPro 8 Core Memory 4GB kit $154 / 2GB kit $94, New 2008 iMac 2GB $46. MacBook Pro / MacMini / iMac Intel Core2 DUO 2GB $44 / 1GB $23--Free shipping available.

Download Typestyler, still the Ultimate Styling Tool for Internet, Print and Video Graphics. Works great in Classic with a Native OS X Version on the way. Free Tryout: www.typestyler.com

LA Computer Company: Specials on AppleCare, iMac's, Apple Batteries and Apple A/C Adapters. Also Great prices on Used Apple Computers. Call 1-800-941-7654 Click Here.

OWC: Mercury Elite FW800/FW400/USB2/eSATA up to 2.0TB TOP-RATED Solutions offer High Performance, Reliable storage for all your data storage needs. 500GB $159.99, 750GB $199.99, 1.0TB from $299.99

Mac users can finally play Party Poker for Mac. Not only that, they can also learn how to play PokerStars for Mac.

Laptop Hardware Provided by TechRestore - Overnight Mac & iPod Repairs.

Compare products like desktop computers, laptops, and LCD TVs side by side! All the information and reviews to make the best purchasing decision for a new cell phone GPS products or MP3 players. The Ciao network makes searching products easy for you.

MacBook/MacBook Pro / MacMini / iMac Intel Core2 DUO DDR2 667Mhz 4GB Kit $84, 3GB Kit $60, 2GB Kit $40 1GB $20. Click to Maximize your Macs...

iPhone, iPhone, iPhone. It's all over the Web. Apple will release the iPhone. Apple has delayed the iPhone. And the latest rumor is that Apple has ordered 12 million units from Foxconn.

Why?

Back in the 1970s, Apple took a hobbyist computing market and helped launch the personal computer revolution with the Apple II. And thanks to VisiCalc, the first electronic spreadsheet, the Apple II soon made its way into the workplace.

Well, IBM noticed this new market and developed the IBM PC. Its release in August 1981 redefined the entire personal computer industry. People went from having to justify purchase of a personal computer for the workplace to having to justify not buying an IBM.

Apple went from 15% market share in 1981 to just under 10% in 1982. The IBM PC achieved a minuscule 2.5% market share in 1981 and grew to 8.6% in 1982 (its first full year on the market). With the advent of clones, PCs grew to 26% of the market in 1983 and outsold the Apple II, 32% in 1984, and 49% in 1985.

Apple's response was the US$10,000 Lisa in 1983, which make very little headway against the DOS world, and then the US$2,500 Macintosh in 1984. From a running start - Apple sold 372,000 Macs in 1984, sales declined drastically in 1985 (200,000), and barely matched 1984 levels with the 1986 introduction of the Mac Plus.

Apple was great at innovation - the first personal computer with color, the first personal computer with a mouse and GUI - but always a niche player in the personal computer industry.

Consumer Electronics

I could bore you with further details of the Mac's growth through 1995, drastic decline through 1997/98, and resurgence in 2005, but you probably know the story.

What finally changed things for Apple wasn't a computer. It was a portable music player, the iPod. The Mac-only peripheral that required FireWire, the 5 GB MP3 player was introduced in October 2001 to a lot of head scratching. Would people pay US$400 for a digital music player?

But Apple didn't rest on its success this time. In 2002 they introduced iPods for Windows - but Windows users still had to have FireWire cards, which really cut into the potential market.

In 2003, Apple introduced third-generation iPods which had a dock connector that supported both FireWire and USB. Best of all, there were no longer separate iPods for the Mac and Windows markets - and the iPod took off.

Apple opened the iTunes Music Store in the summer of 2003 to make it easy for iPod owners to acquire music by the track. Add iTunes for Windows to the equation, and it was easier than ever to rip CDs, buy music online, and put it on the iPod.

All the pieces were in place, and Apple has dominated both the digital music player market and the online music market ever since.

Enter the iPhone?

The question is whether an iPhone would mirror the iPod's success or the "nichiness" of the Apple II and Macintosh.

The cell phone market is still immature, as was the MP3 player market in 2001. There are too many brands, too many carriers, too many features, and too many interfaces. In some respects, it's a real nightmare.

Add to that Apple's limited support of a narrow range of cell phones with iSync: some Motorola, Nokia, Panasonic, Sony Ericsson, and Siemens models. Nothing from Samsung, Kyocera, LG, or Pantech. (When I replaced my failing phone last week, I really wanted a Samsung, but instead chose a Motorola because it works with iSync.)

What Apple Brings to the Table

Apple brings some of the best industrial design in the business to the table. The company that gave us the elegance of the iMac and the simplicity of the iPod is perfectly positioned to redefine the cell phone and its electronic interface.

Personally, I don't give a rip if it plays iTunes or not, whether it includes a camera, or if there's a speakerphone setting. Give it USB for charging and synching, Bluetooth for headsets and synching, full iCal and Address Book support, and an elegant user interface, and I'm interested.

Of course, Apple isn't going to enter the market with a low-end cell phone. As they did with the iPod, they'll start at the top of the market. Maybe something to compete with the Treo 650, Blackberry, and Windows Mobile "smart" phones on the market.

Yeah, that's it. Apple has the user interface expertise and the touch screen technology (think Newton). Instead of building a bulky PDA that functions as a phone, the iPhone could be smaller, comfortable to hold, and show the world what a smart phone should be.

Just like they did with MP3 players when the introduced the iPod.

If they do that on the high end, they'll give everyone a run for the money. And then they can move down the food chain - again as they did with the iPod.

Not that I expect Apple to own the market, but with such a huge market, holding 10-20% would mean a lot to Apple's bottom line. And having a cell phone that fully integrates with Macs would mean a lot to Mac users making do with the limited integration we have today. LEM

Dan Knight has been using Macs since 1986, sold Macs for several years, supported them for many more years, and has been publishing Low End Mac since April 1997. If you find Dan's articles helpful, please consider making a donation to his tip jar.

Recent Mac Musings

Links for the Day

Recent Content on Low End Mac

About LEM | Support | Usage | Privacy | Contacts

Entire Low End Mac website copyright ©1997-2008 by Cobweb Publishing, Inc., unless otherwise noted. All rights reserved. Advice presented in good faith, but what works for one may not work for all. Please report errors to .
  LINKS: We allow and encourage links to any public page as long as the linked page does not appear within a frame that prevents bookmarking it.
  Access our RSS news feed at http://lowendmac.com/feed.xml.
  Email may be published at our discretion; email addresses will not be published without permission, and we will encrypt them in hopes of avoiding spammers. If you prefer your message not be published, mark it "not for publication." Letters may be edited for length, context, and to match house style.
  PRIVACY: We don't collect personal information unless you explicitly provide it. For more details, see our Terms of Use.
  Low End Mac is an independent publication and has not been authorized, sponsored, or otherwise approved by Apple Inc. Apple, the Apple logo, Macintosh, iBook, iMac, eMac, iPod, PowerBook, MacBook, Mac Pro, Apple TV, and AirPort are registered trademarks of Apple Inc. Additional company and product names may be trademarks or registered trademarks and are hereby acknowledged.


Have a question?
Ask an expert!

Navigation

Used Mac Dealers
Apple History
Best Used Macs
Video Cards
Email Lists
InfoMac's Low
End Mac Forum

Favorite Sites

MacSurfer
MacMinute
MacInTouch
MyAppleMenu
InfoMac
Macs Only!
The Mac Observer
Accelerate Your Mac
RetroMacCast
PB Central
MacWindows
The Vintage Mac
   Museum
DealMac
DealsOnTheWeb
Mac2Sell
ramseeker
Mac Driver Museum
JAG's House
System 6 Heaven
System 7 Today
the pickle's Low-End
   Mac FAQ
Abandonware
   Petition
Mac vs. PC Info

Affiliates

The Apple Store
Mac Connection
MacMall
TechRestore
MacResQ
ExperCom
Crucial Memory
batteries.com

Advertise

All of our advertising is handled by BackBeat Media. For price quotes and advertising information, please contact at BackBeat Media (646-546-5194). This number is for advertising only.

Open Link

Problems viewing this page with Internet Explorer 5.5 or 6? It works fine in other browsers, including IE 7. We recommend Firefox for those using Windows, as it is standards based and more secure than IE 6 (and earlier). More LEM visitors use Firefox than any other browser.