"Mr. Jobs means to take Apple back to the land of the handhelds...
<a href="http://www.nytimes.com/2002/08/19/technology/19APPL.html"; target="_blank">...but this time with a device that would combine elements of a cellphone and a Palm-like personal digital assistant."</a>
[ 08-18-2002: Message edited by: jbc ]</p>
[ 08-18-2002: Message edited by: jbc ]</p>
Comments
[ 08-18-2002: Message edited by: jbc ]</p>
August 19, 2002Â*Â*
Apple's Chief in the Risky Land of the Handhelds
By JOHN MARKOFF
SAN FRANCISCO, Aug. 18 Â? It has long been Silicon Valley's favorite guessing game: What is Steven P. Jobs going to do next?
The question is particularly engrossing as Apple Computer prepares to introduce the new version of its Macintosh OS X software operating system.
There are signs that, with the new version of the Macintosh OS, Mr. Jobs, Apple's founder, chairman and chief executive, may be approaching a precipice
like the one that led to the downfall seven years ago of the man who was then Apple's chief executive, John Sculley.
Mr. Sculley's great tumble came after he staked his and Apple's reputation on the ill-fated Newton hand-held computer Â? an ambitious product based on
handwriting-recognition technology that was ahead of its time.
And now come signs that Mr. Jobs means to take Apple back to the land of the handhelds, but this time with a device that would combine elements of a
cellphone and a Palm-like personal digital assistant.
Mr. Jobs and Apple decline to confirm those plans. But industry analysts see evidence that Apple is contemplating what inside the company is being called
an "iPhone."
Among the evidence, they say, is recent behind-the-scenes wrangling between Palm and Apple over linking Palm's own devices to Apple's new operating
system Â? apparently with little cooperation on Apple's part.
Analysts also cite Apple's deal with Pixo, the tiny company that designed the software for Apple's popular iPod MP3 music player; that deal includes a
license for Apple to use Pixo's software with a second product.
And analysts note that the presence of a variety of features in the new Macintosh OS software that would make more sense in a hand-held device than a
desktop computer.
"When you connect the dots, you end up at a phone," said Charles Wolf, a financial analyst who follows Apple for Needham & Company.
Compared with the Newton, which was delivered prematurely in 1993 to a market not yet ready for such products, Apple's new device would reach a field
in which other companies have already plowed the ground Â? including giants like Microsoft, Nokia and Motorola, as well as start-ups like Handspring and
Danger.
This crowded field could pose risks for Apple, if its product were seen to fall short of the competition.
And yet, entering an already established market could give Mr. Jobs the opportunity to show off his and Apple's vaunted innovation and marketing skills.
Certainly, Apple's push into the market for a hand-held communicator would be an abrupt departure for Mr. Jobs, who continues publicly to disavow talk of
such a move.
But analysts and people close to the company say that the plan is under way and that the evidence is manifest in the features and elements of the new
version of the Macintosh operating system.
Mr. Jobs Â? who was a co-founder of Apple and handpicked Mr. Sculley as its president, only to be forced out by him in 1985 Â? returned five years ago
when the company was on the brink of collapse.
In a remarkable turnaround effort, Mr. Jobs has taken pains to distance Apple from the Sculley-Newton legacy. He canceled the Newton soon after
returning and has pooh-poohed the industry's personal digital assistants as "junk" and worse.
Behind the scenes, though, Mr. Jobs has been actively exploring the computing world beyond the desktop. Soon after he arrived back at Apple, for
example, he attempted to buy Palm for $1 billion, according to a Silicon Valley executive familiar with the offer. Palm rejected the idea, this executive
said.
Now, with the release of the newest version of the Macintosh operating system, Mr. Jobs appears intent on taking Apple itself into the hand-held market.
The move would play into Apple's so-called digital hub strategy, in which the Macintosh desktop computer is the center of a web of peripheral devices.
The highly anticipated Macintosh OS X, Version 10.2, which began shipping on the company's newest computers last week, will go on sale for existing
Macintosh users on Saturday.
While the software is being marketed as an improvement for desktop computer users, it could have just as big a future in powering a yet-to-be announced
Apple hand-held computer-phone.
Mr. Jobs continues to be coy. He insists that he still dislikes the idea of the conventional personal digital assistant, saying that the devices are too hard to
use and offer little real utility.
But a telephone with personal digital assistant features is another matter.
"We decided that between now and next year, the P.D.A. is going to be subsumed by the telephone," he said last week in an interview. "We think the P.D.A.
is going away."
And even while protesting that the company had no plans to introduce such a device, he grudgingly acknowledged that combining some of Apple's industrial
design and user-interface innovations would be a good idea in a device that performed both phone and computing functions.
A look at the laundry list of features in the company's new version of OS X indicates that a computer-phone is much more than a vague idea for Apple.
Of the 12 new OS X features the company has been emphasizing on its Web site, most would be desirable for a hand-held phone, including chat capabilities,
mail, an address book, calendar features, automatic networking and a synchronization feature that will become available in September.
And several of the features, including the company's handwriting-recognition technology and Sherlock information-retrieval program, would be much more
relevant to a small, portable device than to a desktop computer.
Sherlock in particular has been repositioned in a way that would make it a perfect counterpart for a portable phone. I
ts original purpose, which was finding files and content on the computer's local disk, has been transformed into a more general "find" utility program.
Now, Sherlock is being extended to search for types of information like airline and movie schedules and restaurant locations.
The software can display maps and driving directions.
But details of the plan are unlikely to emerge from Mr. Jobs or his team before Apple is ready to introduce a new product.
The company, which in the 1980's and 90's was known among reporters as "a ship that leaks from the top," is now obsessive about guarding the secrecy
of its future products.
All Mr. Jobs would say on the matter was that the cellphone computers already on the market fall far short, and that some of the user-interface and
industrial design touches already evident in the iPod would be perfect for an improved, consumer-friendly version of such a product.
An Apple phone could be a particularly tempting product for Mr. Jobs, giving him the opportunity to overcome Mr. Sculley's largest failure.
He could also rectify the Newton's single biggest shortcoming: the device's inability to communicate easily with the Macintosh desktop computer.
Apple has already begun offering Bluetooth local wireless networking technology for peripheral devices, a feature that would make it simple to share
information between a phone and a computer.
Furthermore, the cost of adding phone capabilities to palmtop computers is falling rapidly.
"It's easier and easier for a company like Apple to go to a Taiwanese manufacturer for wireless telephone components," said David Carey, chief executive
of Portelligent, a technical market research company based in Austin, Tex.
He said the parts required for adding advanced cellular capabilities to a device now cost as little as $50.
Of course, that is why Mr. Jobs's greatest challenge with an iPhone might be elbowing his way into a crowded marketplace, where other companies already
have supplier and manufacturing relationships in place.
"There's no question that Apple could design a cool phone," said Andy Neff, a Bear, Stearns analyst in New York. "The key is being able to build an
infrastructure."
MSKR
[ 08-18-2002: Message edited by: Masker ]</p>
[ 08-18-2002: Message edited by: jbc ]</p>
<strong><a href="http://www.nytimes.com/2002/08/19/technology/19APPL.html"; target="_blank">...but this time with a device that would combine elements of a cellphone and a Palm-like personal digital assistant."</a>
[ 08-18-2002: Message edited by: jbc ]</strong><hr></blockquote>
Two possibilities:
- PalmOS based, device doubles as organizer (Apple buys Handspring/Palm...).
PS: PalmSource is just moving its offices to Sunnyvale...
- Not PalmOS based. Apple sources stuff like with the iPod (eg. OS from Pixo) or buys another company like Danger.
I suggested Apple buying Danger Inc. some time ago.
In any case, the revenue model is rather different than everything Apple does (except for Earthlink deal, details below).
Therefore, I see one big advantage and two issues:
+ Phones are still a big revenue driver if things are done right (new generation of color phones is a growth driver Apple can't find with PCs). These phones are much more complex and offer more interaction possibilites with PCs (read Digital Hub): SyncML, Bluetooth, camera phones.
- Field is crowded with big names (Nokia...) as NY mentions.
Selling phones is difficult to be done globally. Japan is ahead of everyone else...what phone standard to support ?
Phones need a lot more adapting between USA / Europe / SE Asia and Japan ...
- Revenue model: Phones are sold for free or heavily subsidized. Apple needs to get in touch with all the operators and cut deals. This takes time.
(Apple is doing this with Earthlink, but there 'operator' margins are almost a negligible margin compared to cost of Apple HW, ie. the money Apple gets from people signing up to Earthlink).
But Apple can get recurring revenues from usage of such devices, more on this later.
PS: This iPhone doesn't rule out the Apple camera at all. All new phones will have cameras built-in (Nokia 7650 one of the first in the West).
In Japan, almost all phones from some operators (J-Phone) now come with cameras for months now.
Also, a iPod lite might be built-in....interesting thought.
[ 08-18-2002: Message edited by: jabba ]
[ 08-18-2002: Message edited by: jabba ]</p>
So I take this NY article very seriously.
(And like CINet, the NY Times doesn't need to print bullshit to get a few hits - like Spymac or YDailyMac to name just a few...).
Maybe this device is introduced as early MWSF according to both sources. Palm seemed to collaborate with Apple on this device. But if the NY Times is correct, Apple seems to go on their own.
Don't know more....
(Personally, an introduction at Apple Expo Paris next month would make much more sense to me. Any iDevice should be introduced by September/October for maximum number of sales till Christmas. On the other hand, a phone couldn't just be put in stores and sold, you need contracts in each country with operators, Apple couldn't probably do it in time anyway, especially in Europe - see my other post above on revenue issues...)
PS OT: iCal and/or iSync are most probably early. Download on Aug 24, the day the cat gets out the door from what little birds tell me.
[ 08-18-2002: Message edited by: jabba ]</p>
<strong>Steve is a moron. </strong><hr></blockquote>
Motorola are the morons. Wait for CPU alternatives, they will arrive. But this is OT...
This thread is about iPhones/new handheld
Which reminds me:
The Treo 180/270 was leaked early because HS needed to submit the device to FCC. Also, you need approval for cellphones in some countries (Radiation issues with cellphones etc.)
Apple can't keep this secret to the last minute anyway.
On the other hand, this is probably ok for them..it's a new market for Apple and can only create buzz. No cannibalizing sales on existing Apple products.
If the general public knows of this 2-4 months before introduction, it won't hurt Apple.
Well, Steve won't like it...
[ 08-18-2002: Message edited by: jabba ]
[ 08-18-2002: Message edited by: jabba ]</p>
This fits in very well with the digital hub strategy, iSync, iCal and .Mac. (I wonder if Apple is thinking about rolling the phone service into the .Mac subscription?)
I was surprised that NYT saw Sherlock 3 as a tool more suitable for phones, but it does make sense. (Other phones already offer some of Sherlock 3's capabilities.) Perhaps the iPhone would use the same web services, but wrap them in a streamlined Pixo interface. That could definitely come in handy...
I also like to think that the iPhone could grab files off one's iDisk (even if only to shuttle them to another Mac nearby, via Bluetooth) -- persistent wireless access to your data all the time.
Yes, Apple will do this. I'm almost certain of it. I expect it will be one slick-looking piece of engineering, too.
<strong>Do you think it would help production at all if apple had in house component makers?? They should just buy a ton of little jap chipmakers if it would help........</strong><hr></blockquote>
Do you refer to desktops here ?
Well, Japanese chipmakers normally don't make CPUs for desktop - although the CELL initative between IBM/Toshiba/Sony might prove valuable to the PowerPC from IBM in 2-3 years - and thus Apple as customer.
Back to phones
As for other components, I don't see a lot of problems Apple didn't solve with the iPod.
+ Very good batteries
+ great LCD screen (65k colors as in Japanese phones). Nokia and SonyEric just have crappy 256 or 4096 colors and bad screens...
+ tiny camera built-in.
+ Maybe an even tinier HD for storage (and a built-in iPod lite)
They got the nice iPod drive from a J manufaturer (Toshiba), so they should be able to get the above from Japan as well.
As for the OS side, both PalmOS5.0 or Pixo should do. The new phones (will) all support J2ME applications, does Pixo OS support that ?
If anybody knows, clue me in
Apple can bring in two technologies to handhelds *no other manufacturer* has integrated yet into a mainstream handheld:
Think GPS.
Think Airport (in addition to Bluetooth).
* Now think Sherlock and iChat mobile edition in conjunction with the above HW technologies.Only Apple can do "the whole widget, HW and SW *
Connect the dots for the business model. Huge *recurring* revenue streams for Apple....restaurant searches, tickets, mobile chats.
[ 08-19-2002: Message edited by: jabba ]</p>
Do you remember WOZniak is building a company doing cool handheld devices with GPS functionality built-in. Could he market his device with Apple ? Why not ?
Also, WOZ sits on the Danger board.
Food for thought.
The Cell phone market is crowded. With HUGE companies like Ericsson and Sony having to rethink theyr strategy. Even Nokia is struggling in todays market.
A PDA that can be connected easily to a cell phone (Think BlueTooth) with lots of new capabilities (larger screen, better handwriting recognition, new suit of applications, etc etc.) would be more feasable. Apple could worry about the PDA being as good as possible, whilst SonyEricsson are handling all the implications of designing and producing cell phones.
And besides modern phones are way to slow to use (the GUI), and it takes ages to find and create new contacts and read/write to the addressbook.
Anyways, how much would you guys pay for an Apple branded Phone with PDA capabilities ? $1000-$1500, i dont think so!
Just my though.
France is all and only GSM.
Sprint and au in Japan share CDMA tech. It is very likely that any iPhone by apple will use CDMA tech.
Who would Apple choose to get into bed with?
In Europe it's a no brainer... they have STANDARDS that allow ANY phone to work with ANY system (I think). Did you ever try to move from one cell provider to another (in the US) AND KEEP the same phone?!?!? Sorry boys and girls it ain't gonna happen till such a time we here in the US get our act together with respect to cell technology Apple would be N-U-T-S to enter the market.
Just my .02 cents
BTW here in NYC the BEST carrier bar none happens to be VERIZON I'm willing to bet they are 'less than the best' where quite a few of you live.
Dave
[ 08-18-2002: Message edited by: DaveGee ]</p>
The Cell phone market is crowded. With HUGE companies like Ericsson and Sony having to rethink theyr strategy. Even Nokia is struggling in todays market.
(...)
Anyways, how much would you guys pay for an Apple branded Phone with PDA capabilities ? $1000-$1500, i dont think so!
Just my though.[/QB]<hr></blockquote>
You are right. I was thinking the same thing for a long time.....until the day Apple released the iPod. I was thinking, hell this will tank badly, MP3 players are already out there and iPod is too expensive. I was wrong and happy to admit it.
True, the cellphone market is different from the MP3 market:
- There are big players out there you mentioned. Nokia (still?) dominates the cell market, MP3 market didn't have a dominant player.
- No global standard for phones as I mentioned above (even GSM has different bands in US and Europe to just name an example...).
MP3 player can be sold the same all over the world.
- You need to update phones more often than an MP3 player because of the competition.
Apple will need to play this game.
- Apple is late in the game for brand recognition. Nokia has high attrition rate (esp. users who are not savvy and like to have a new phone with the same menu system - I don't make this up, it's according to studies.
So, why do I still believe Apple will make it.
1. Design. Apple's phone will rock in design *and UI*. Like with the iPod scroll wheel etc..
2. New kind of thinking - new sort of device. This will drive sales. The slump is because of crappy B&W phones with no innovation inside.
Apple will release a new kind of device. It's like:
Sony = Discman/Walkman
Apple= iPod
Same purpose: Listening to music - still Apple's device was something completely new.
Apple's device had a HD, I think they can do the same with phones:
- Think GPS
- Think Airport
- Think integration with the desktop.
3. Digital Hub. Especially the marriage of Apple HW and SW.
I already mentioned two key technologies above (GPS, Airport) - and of course Bluetooth which news phones already have.
+ Airport makes sense to get bigger amount of data - or surf for data at a much lower price in some areas.
+ GPS to find stuff whereever you are in addition to current location-based systems which aren't as accurate.
No other phone manufacturer offers this as of now - and this doesn't even include integration with desktops/laptops:
Jobs showed this off on stage at MWNW....when your (Bluetooth) phone rings, Addressbook opens and you see the guy's picture and info on your screen.
And Jobs mentioned he would like to see pictures synced with your phone in the future..hmmm.
Just think of the HW and SW Digital Hub with an iPhone. This really is the 'whole widget':
- Phone Camera or iPhoto <-> Bluetooth <-> your phone again <-> .mac for mobile
- GPS <-> Sherlock <-> your phone (restaurants, tickets...)
Food for thought.
[ 08-18-2002: Message edited by: jabba ]</p>
Look at the iPod...companies still rn't figuring out how to put style, capacity, and ease of use together like apple can!
<strong>that's interesting and it reminds me of something. after the macworld keynote when jobs was pushing that ericcsony phone, i went to their website to look at their product line. there is a pda/phone in the lineup that is the top of the line. it also has bluetooth. and i was wondering to myself why jobs would emphasize the normal phone version instead of the pda version that ericsony also makes. i guess it could make sense that he doesn't want to step on th toes of one of his own devices. but why bring sony on stage to begin with if they're bringing out their own phone?</strong><hr></blockquote>
Good point...
Apple had Sun on stage to push QT6/MPEG4 as a rackmout server when a few (one?) month('s) later Apple hit with the xServe... Also Apple was pushing 'some' (forgot the brand) MP3 player to sync with iTunes and then came out with the iPod.
Apple will make use of technology examples till such a time that THEY enter 'said market'.
but that being said... I still say that Apple would be nuts to enter the cell phone market till such a time that they could develop a device that would connect to ALL the major cell providers in the US ***and*** Europe plus the Orient.
Sorry but the major issue I see here in the US is SPRINT + VERIZON + CINGULAR + AT&T they all 'roll their one' (I think) and as such each has to make deals with specific cell phone makes to design phones for their systems. How in the heck is Apple gonna be able to deal with that **plus** Europe and the Orient.
Dave