iPhone on right track, but won't knock iPod sales yet -- report
In spite of its convergence appeal, the iPhone won't yet carve into the iPod's success -- but it checks off many of the boxes needed for a future windfall, according to an investor note from analyst firm Piper Jaffray.
The group warns in a new industry overview that as long as a significant price gap exists between dedicated media players like the iPod and multi-function devices like the iPhone, the former will continue to enjoy strong success as buyers choose the less expensive option.
"As [average selling prices] of media-enabled smart phones fall, the mobile category will begin to impact the standalone media player market," the analysts say.
However, the iPhone also follows all the right trends, the researchers note. The emphasis on a natural touch interface for the cellphone -- rather than the artificial buttons and wheels of the iPod -- is expected to spur sales as the technology improves, and may already be doing this today through the iPod touch, which costs significantly less than the iPhone.
"The difference... between the iPod classic (with a traditional iPod interface) and the iPod touch (with touch-based operation) is a meaningful one," Piper Jaffray notes.
The shifts to sharper video-friendly displays, as well as smaller NAND flash storage in place of hard disks, are also considered important steps that will drive the market once storage is capacious enough to hold more video.
It may be the video itself which proves the real barrier. Apple has a "strong foothold" in video, but the loss of NBC emphasizes just how splintered the market may be, according to the report. Without a clear advantage in content, neither iTunes nor most other providers offering video downloads can expect to take a clear lead in the space no matter how clear the hardware's advantage may be.
Even so, Piper Jaffray maintains a positive outlook on Apple as the Cupertino, California-based company has short-term momentum with a range of new iPods and Macs. Long-term iPhone momentum could also prove decisive in 2009, when Apple is expected to reach the important $300 price point for the handset and the effect of sharing revenue with AT&T is seen at its peak.
"We believe Apple is firing on all cylinders heading into 2008," Piper Jaffray's overview explains.
The group warns in a new industry overview that as long as a significant price gap exists between dedicated media players like the iPod and multi-function devices like the iPhone, the former will continue to enjoy strong success as buyers choose the less expensive option.
"As [average selling prices] of media-enabled smart phones fall, the mobile category will begin to impact the standalone media player market," the analysts say.
However, the iPhone also follows all the right trends, the researchers note. The emphasis on a natural touch interface for the cellphone -- rather than the artificial buttons and wheels of the iPod -- is expected to spur sales as the technology improves, and may already be doing this today through the iPod touch, which costs significantly less than the iPhone.
"The difference... between the iPod classic (with a traditional iPod interface) and the iPod touch (with touch-based operation) is a meaningful one," Piper Jaffray notes.
The shifts to sharper video-friendly displays, as well as smaller NAND flash storage in place of hard disks, are also considered important steps that will drive the market once storage is capacious enough to hold more video.
It may be the video itself which proves the real barrier. Apple has a "strong foothold" in video, but the loss of NBC emphasizes just how splintered the market may be, according to the report. Without a clear advantage in content, neither iTunes nor most other providers offering video downloads can expect to take a clear lead in the space no matter how clear the hardware's advantage may be.
Even so, Piper Jaffray maintains a positive outlook on Apple as the Cupertino, California-based company has short-term momentum with a range of new iPods and Macs. Long-term iPhone momentum could also prove decisive in 2009, when Apple is expected to reach the important $300 price point for the handset and the effect of sharing revenue with AT&T is seen at its peak.
"We believe Apple is firing on all cylinders heading into 2008," Piper Jaffray's overview explains.
Comments
yah, I think the click wheel is going to survive for quite some time despite the glossy touch interface on an iPhone, heck I even prefer the Shuffle's controls when I'm out jogging so I don't have to keep looking at the device.
In all, I think sales of iPods and iPhones whichever one is ahead is a great thing. Goooo Apple!
The emphasis on a natural touch interface for the cellphone -- rather than the artificial buttons and wheels of the iPod
Try skipping ahead to the next song while driving a car and tell me which interface seems more natural. There is something simple and efficient about the iPod wheel for things like adjusting the volume or skipping songs. With the iPhone, I need to first look at the screen to know where the buttons are.
....Long-term iPhone momentum could also prove decisive in 2009, when Apple is expected to reach the important $300 price point for the handset......
..... and the share?
I'll be one of about 10 people in my country with one. Well 1 of 1 who I have heard
For the iPhone to really gain serious traction it needs:
Try skipping ahead to the next song while driving a car and tell me which interface seems more natural. There is something simple and efficient about the iPod wheel for things like adjusting the volume or skipping songs. With the iPhone, I need to first look at the screen to know where the buttons are.
Why don't you use the clicker on the phone's headset to skip ahead?
My iPhone's on the way - woot!!!
I'll be one of about 10 people in my country with one. Well 1 of 1 who I have heard
For the iPhone to really gain serious traction it needs:
I don't really think that's what it needs, but everyone will have an opinion on this.
The most important thing it needs to gain real traction is a little traction. And to gain a little traction all it needs is a few sales. The reason I say this is because every time someone actually USES an iPhone in person, in the flesh, their chances of buying it go WAY up. I've seen the effect many times. So when no one you know has one, there's not much chance for you to get one. But once someone you know gets one and you try it out, the wheels start turning real fast in your head, comparing costs and suddenly $400 isn't so much for a great new phone and a great new iPod.
The second thing I think it needs, as you said, is 3G. But this is not a huge deal, and only appeals to a certain part of the market. Right now Apple is doing just what they did with the iPod - leaving a very strong upgrade path for the 2nd generation, while still making a great product for the first generation buyers.
Finally, I think everyone is discounting just how many sales Apple is leaving on the table (purposely) with the high price. In the USA, sales went NUTS when the price dropped. Apple will do the same thing in the UK, France and Germany. Right now there is about $150-200 US still out there to discount, and while people might bitch and moan about missing features when the price is as high as it is right now in Europe, that will all change very quickly when the price drops. And this time I doubt highly that there will be a credit for the price difference for early buyers, not that that is a big deal financially for Apple.
It appears to me that Apple is coasting easily to their goal of 10 million by the end of 2008. When you consider how many they've sold now, through 6 months in the USA and only 1 in a part of Europe, and that more markets will be added, price dropped and features improved in the next 6 months, it seems quite easy to hit 10 million.
The only problem with the touch display controls is that they can't be used in a pocket. One has to actually look at them. Not everyone does that all of the time. Until they can figure out some way around that little problem, the click wheel is secure.
That can easily be solved with a little remote, that is if the button on your iPhone headset doesn't give you enough control.
My iPhone's on the way - woot!!!
I'll be one of about 10 people in my country with one. Well 1 of 1 who I have heard
For the iPhone to really gain serious traction it needs:
Then, why did YOU buy it?
(It strikes me that, sometimes, it seems easier to make attributions to others' purchase decisions than realistically assess one's own).
Try skipping ahead to the next song while driving a car and tell me which interface seems more natural. There is something simple and efficient about the iPod wheel for things like adjusting the volume or skipping songs. With the iPhone, I need to first look at the screen to know where the buttons are.
If everyone hasn't already guessed, the iPhone is the junior year project for Apple. The iPhone touch element will eventually be supplemented with real keys of some variety, or at least something tactile.
If everyone hasn't already guessed, the iPhone is the junior year project for Apple. The iPhone touch element will eventually be supplemented with real keys of some variety, or at least something tactile.
Haptics, anyone?
Why would Apple innovate the multi-touch interface where any type of button for any type of function can be created, just to go backwards and have a set keypad like every other phone?
Why don't you use the clicker on the phone's headset to skip ahead?
Using the headset in a car? That seems a bit awkward. Another cable to possibly dangle about, dig up and click.
SpamSandwich, the iPhone will never have "real keys".
Why would Apple innovate the multi-touch interface where any type of button for any type of function can be created, just to go backwards and have a set keypad like every other phone?
It doesn't need a lot of keys. Just a few more, or some form of a remote. If Apple's handling of the 5th gen recording attachment is any guide, it might be another six months before they'll let anyone try to make one.
Using the headset in a car? That seems a bit awkward. Another cable to possibly dangle about, dig up and click.
Using a headset in a car is awkward? Many states have laws requiring them. Makes life a hell of a lot easier for me at least. I don't see how managing to "dig up" the mic clicker is going to be too difficult, it's about 3 inches from your chin... Seems like finding that and pressing it twice is going to be easier than finding the Classic's click wheel, figuring out it's orientation, and clicking it without looking, no?
That can easily be solved with a little remote, that is if the button on your iPhone headset doesn't give you enough control.
The remote works, but it isn't as easy as the click wheel on the device itself.
The world in at a tipping point. People who's contracts are coming up for renewal are looking at all the things that an iPhone can do, and how well it does them, and they are thinking, "I want my next phone to do all that" Well, friends right now the only game in town is the iPhone. Look no further than the recent price of RIMM or PALM shares. Palm can't come out with a decent phone to save their lives, and Research in Motion seems to be stuck in the mud.
With people seeing the potential of a media center in their pocket instead of "just a phone" a lot more people will be buying smart phones (a large number of them iPhones) in the near term future. What was once only 10% of the market will push upwards of 1/2 the cell phones sold. Which means that Apple will sell a boat load of iPhones and will have a HUGE source of free income from the ongoing monthly profit sharing that they get from each and every iPhone user's monthly bill.
The tipping point has arrived and Apple Inc. is 1-2 years ahead of everyone else, as usual.
Go Steve, Go!!! I can't wait for MacWorld next month!
Apples success lies in being ahead of everyone else on the planet. It's obvious that their iPhone is a year or two ahead of the competition. But here is the real news....
The world in at a tipping point. People who's contracts are coming up for renewal are looking at all the things that an iPhone can do, and how well it does them, and they are thinking, "I want my next phone to do all that" Well, friends right now the only game in town is the iPhone. Look no further than the recent price of RIMM or PALM shares. Palm can't come out with a decent phone to save their lives, and Research in Motion seems to be stuck in the mud.
With people seeing the potential of a media center in their pocket instead of "just a phone" a lot more people will be buying smart phones (a large number of them iPhones) in the near term future. What was once only 10% of the market will push upwards of 1/2 the cell phones sold. Which means that Apple will sell a boat load of iPhones and will have a HUGE source of free income from the ongoing monthly profit sharing that they get from each and every iPhone user's monthly bill.
The tipping point has arrived and Apple Inc. is 1-2 years ahead of everyone else, as usual.
Go Steve, Go!!! I can't wait for MacWorld next month!
Perhaps there's some slight exaggeration here, but I think you are spot on with the "tipping point" view. The hardware manufacturers and competing providers are all scrambling to get caught up. The confusion and panic is evident in their ads, and in the the daily corporate pronouncements.
Yes, Apple has upped the ante, changed the game, and as you say, they have done so a couple of years ahead of anyone else.
Using a headset in a car is awkward? Many states have laws requiring them. Makes life a hell of a lot easier for me at least. I don't see how managing to "dig up" the mic clicker is going to be too difficult, it's about 3 inches from your chin...
For listening to music in the car? This doesn't make sense. I thought many states banned listening to music with headphones while driving.
Seems like finding that and pressing it twice is going to be easier than finding the Classic's click wheel, figuring out it's orientation, and clicking it without looking, no?
That sounds like an absurd construction. I've never had that problem, the iPod is kept in the center console, always oriented up. When I'm walking, I can feel through the pocket to pause, skip forward or backward.
At the Gym: I lift weights and run. The iPhone is better then traditional iPod. I've owned and extensively used the 1st gen shuffle, 1st gen ipod nano, and iPod Photo at the gym. Why is it better? The ability to pause and skip with the microphone is much easier then reaching for the click wheel. Volume control is just as easy with up and down buttons. Searching for a song requires looking at both types of iPod, but is MUCH faster with the iPhone interface.
My pet peeves at this point is that there aren't many alternatives to the OEM ear buds and you can't repeat a song without looking at the unit.
In the car: Sorry, my iPod photo is in my glove box and control the iPod from the car's head unit. I suspect more people will use this method as iPod integration increases.