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iPhone Watch Day 1: Why it won’t hurt iPod sales

January 10, 2007

I walk into the newsroom this morning and a co-worker asks me, “Are you still giddy” over the iPhone announcement? Oh, heck yeah!

The iPhone (AP/Apple)Though today, I’m a bit more subdued. Yesterday, while covering/blogging the Macworld keynote, I was doing everything I could to keep from bouncing off the walls with excitement.

Now after a night’s sleep, I’ve chilled out a bit, and can calmly reflect on what is before us.

The iPhone. It actually exists. And it’s only FIVE months away.

So begins the iPhone Watch here at Hard Drive Life. I’m going to try to give you some insights into why this phone will change the industry (some think it has already, in a mere 24 hours) and also clue you in to the best opinions and news on the device, so you can make an informed, educated decision on whether to buy this new tech marvel this summer.

At least, that’s how I’ll explain it to my wife…

bullet FINE YOUNG ‘CANNIBALS’: One of the first pieces I read yesterday was Stan Greenburg’s blog at MarketWatch (and there was lots to watch on the market, as Apple stock soared by 8% post-announcement).

Other than some concerns we’ll address later in this post, one of his concerns about the iPhone I want to examine closer here:

9. Likely to cannibalize iPod sales.

Really? I don’t see it hurting sales at all. At least, not to “cannibal” levels.

Now, you’re probably screaming at this blog now (and in your office, people are looking at you funny as you do so … if at home, your cat is), saying “Corey, of course this will rip into iPod sales! It’s a widescreen iPod.”

No, it’s a phone. It’s an expensive smartphone first and foremost. And the MP3/video capabilities of the iPhone are not even in the top three most-important features on it. (those three being wi-fi connectivity, its innovative browser, and the OSX touch commands)

When Steve Jobs said in his keynote that he was introducing three new products — A widescreen touchscreen iPod, an Apple phone, and an Internet communicator — I cheered. I immediately knew I’d want to upgrade my video Ipod to the new one, and possibly get a phone, depending on the features (I figured the Internet communicator was a Skype phone for the home or VOIP networks).

Then he said it was all part of one device, the iPhone … and I muttered, “damn!”

As I’ve said in previous columns, people buy a cellular phone for its communications features, and everything else is just gravy. You want to be able to have a crisp, clear phone conversation and be able to easily text message and web browse when needed. Storing and playing MP3s is the least of my worries when I need to be contacted by the office or my family.

My iPod at the moment holds 56 GB of TV shows, games, movies, video and audio podcasts and music. The reason I never got a iPod Nano (with an 8 GB drive max) was that I really didn’t want to have to pare down my collection to make it fit on the small flash drive.

I was eagerly awaiting a widescreen touchscreen video iPod — one with 60-80 GB of storage and maybe wi-fi connectivity. I would have bought one in seconds to replace my current model.

Steve in light (AP)And who knows, maybe it’ll be “one more thing” at a press conference in a month or so, coming in the same style and form factor as the iPhone. But I feel THAT’s the device iPod loyalists were waiting for, not the phone announced yesterday.

As for Greenburg’s contention that iPod sales will be hurt by the iPhone’s debut, I say look at the parents’ pocketbook.

What do the current iPods cost? The Nano sells at $149, $199 and $249 for its 2, 4 and 8 GB sizes respectively. The video Ipod models start at $249 and $349 for 30 and 80 GB models. The iPhone will cost $499 or $599 for 4 GB or 8 GB models, respectively.

As a parent of a teen screaming for an iPod, which would you buy them? Obviously, the best for the buck storage-wise is the 80GB video version. If they have size/portability/hiding-it-from-teacher concerns, then a Nano is best.

Parents will have to get the message that THIS IS NOT AN IPOD. It’s a feature-rich smart phone, or a step further, a portable PC (running OS X). This is not like their son or daughter’s RAZR or Sidekick they want to ditch. It’s a whole other level of phone, once reserved for journalists and business-types.

I just don’t see any parent (or practical-thinking teen, for that matter) getting an iPhone for its iPod features when the music/video only devices do such a superior job already.

Of course, the “rich kids” will have one and brag about it, but that’s easily defused…

  • RICH KID: Look everyone, I got an iPhone!! It plays video and movie and everything.
  • NORMAL KID: Nice, so how many movies do you have on that thing?
  • RICH KID: Oh, I have, umm…three. That’s all the room I had on its hard drive.
  • NORMAL KID: Oh, that’s too bad. Me, I have about 15 on my video iPod, and some Battlestar Galactica episodes. Plus a few thousand MP3s.
  • RICH KID: Yeah… nice… But hey, look at me resize this photo with my fingers.
  • NORMAL KID: Uhh…no thanks.

And remember, at $499 and $599, some parents will look at the other recent high-priced tech gadget, the Playstation 3, and tell their kids once again “No way” because the PS3 was also too expensive for the household.

But that shiny iPod video isn’t too expensive for Mom and Dad. Happy birthday Bobby!

bullet LOOK, DON’T TOUCH: CNET got a “first look” at the iPhone. Except that’s all it was, a look, as the device was out of reach in a glass display case on the Macworld floor. I’ll be interested to hear the Buzz Out Loud crew’s opinion on the device later today.

bullet JOBS ON TV:Here’s the video from YouTube from last night’s ABC.  Funny note in the piece, Jobs mentions only THREE iPhones are in existance right now — his own and the two on display on the Macworld floor.

Also, Steve appeared on CNBC to discuss Apple’s entry into the market:

bullet “VAPORWARE?!”: There’s a lot of criticism of this device brewing already — some of the most vicious comes from Valleywag’s Paul Boutin. He rails on the fact that Apple doesn’t have the iPhone or the new AppleTV ready for sale in Apple stores today, as the company has done in the past.

From Paul’s post:

The other part of the fun was writing about stuff readers could actually order, instead of rewriting long-term promises for, say, Intel’s now-forgotten Viiv. The dual thrill of liveblogging a Stevenote was (a) letting 2 million fellow fanboys in on the show, and (b) hitting reload on the Apple Store in another browser window so I could order mine first.

No luck today. Steve hauled out a TV box we’d seen already but can’t have yet, and a phone for which we can only “sign up to learn more.” I’ve made a name by doing hands-on reporting about stuff that’s ideally already available. If this is the new face of Macworld, I can stay home and read it on Engadget.

Oh come on, Apple’s past retail announcements were the exception, not the rule. Most companies announce their new products, then you have to wait for months until the item makes a bug-ridden debut.

Paul goes on to mention the negativity brewing at Macworld about the way that Apple went about giving advance previews of the iPhone to selected members of the press, and mentions that Apple, Inc. (the company’s new name) must conform to the consumer electronics release schedule now — which means debuting new products during the Consumer Electronics Show. Except they did it miles away in San Francisco, instead of in Las Vegas

But in the end, he does admit that the Apple iPhone stole CES’ thunder. Good man.

Steve jokes about the iPhone (AP)bullet BUT STEVE, WHAT ABOUT THE iTOASTER?: The New York Times’ blog “Bits” points out that the keynote presentation by Jobs didn’t have much other than AppleTV and iPhone news:

There has never been a Macworld Expo keynote speech quite like the one Steve Jobs just gave, one that was devoted entirely to a single product. Nothing about Macs, nothing about new iPods, not even a word about the iLife software suite or Mac OS X “Leopard.”

Same for Monkey Bites at Wired, they were jonesing for ANYTHING software-related. And I thought for sure something about OS X Leopard would have made the bill:

Phone Schmone. Where’s the Leopard previews? Release dates? Amazing additional features Jobs promised at the WWDC? Can a million rumors about retiring the Aqua interface really be wrong? We just don’t know. And our fingernails can’t take it much longer.

What about ILife ‘07? ITunes? IWork? Rumor has it that some Steveo’s presentation used some Keynote features that aren’t available to us mortals using the ‘06 version. It seems reasonable to assume that an iWork ‘07 must therefore exist, but nary a peep from the big man.

Then of course there was my dream of an Aperture update shot to hell. Something about a spreadsheet app as well. Okay, let’s be honest I don’t care about a spreadsheet app, but still, the disappointment is palpable over here at Monkey Bites.

The NY Times blog did, however, put together the best description of the keynote I’ve seen online so far, capsulizing all of what made the day special for us Mac-heads:

But what you can’t get from any printed description is how it’s all sewn together with typical Apple polish and grace, with delicious animations and gorgeous graphics. (The crowd went nuts when Steve Jobs demonstrated how you scroll through your iTunes music list: you flick your finger upward or downward on the screen. The list flashes by, slowly coming to a stop like a roulette wheel.)

Now, there will be plenty of people who will pass on the iPhone: people who have no Cingular service where they live (that’s the exclusive carrier); who are disappointed that, as a GSM phone, the cellular Internet service is slow; who find the iPhone too big (though incredibly tiny for what it does, it’s big for a phone); who would prefer typing e-mail with a dedicated thumb keyboard than hunting and pecking with one finger on the iPhone’s on-screen keys; and who consider $500 too much for a phone.

Everyone else, however, will be beating a path to the iPhone’s door. The iPod showed us how breathtaking beauty and effortless simplicity can trump any number of practical quibbles in the real-world marketplace.

This thing will go through the roof, exactly according to Apple’s master plan. Prepare for a replay of the iPod lifecycle: other cellphone companies will rush out phones that match the iPhone’s feature list, but will fail to appreciate the importance of elegant, effortless, magical-feeling software.

More updates from around the Web coming as the iPhone Watch continues here … subscribe via RSS for the latest posts.

But before I go, let me know in the comment field … If you have 10 GB or more of music, would YOU buy one of these iPhones? Or stick it out with the iPod?

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2 Comments
  1. podcastgalaxy permalink
    January 10, 2007 10:41 am

    There’s a neat widget at http://www.ifthensoft.com that counts down the days until the glorious iPhone is ready for purchase (though they have it counting down to June 15th which appears to just be a wild guess!) So far, this is the best article about the iPhone I have read yet–keep up the great work!

  2. January 10, 2007 10:45 am

    Thanks a ton. There’s more coming, trust me 🙂

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