iPhone 4 Will Reinforce The Differentiating Power Of Software In Phones


To the surprise of no one, today Apple unveiled the fourth version of its iconic device: iPhone 4. While some features such as the higher resolution camera, LED flash, and front facing camera qualify more as upgrades that put Apple back on par with leading competitors, others such as the "retina" display and the gorgeous industrial design will maintain Apple's mindshare and market share growth rates.

Apple is going to sell a lot of iPhone 4s. They'll sell them to those who simply have to have the new new thing (many of whom are iPhone owners already), and to iPhone owners who were off contract and waiting for the new version. They'll also sell a lot of iPhone 3GSs, especially to iPhone 3G owners who can't stomach going without iOS 4's multitasking, and also to those for whom $15/month is a manageable addition but $30/month is not. That's a whole lot of good news for AT&T and Apple's other carrier partners, though that good news is more in the form of loyalty than in net additions to their networks.

What's driving that loyalty? Software. OK, OK, Apple makes beautiful, elegant, compelling hardware. But the iPhone is superior to its competitors because the software is so much better: the OS and the apps. And Apple's customers increasingly invest more in that software, not just the financial investment in the device and the apps they purchase, but the personal investment of their time, data, and content. Go ahead and laugh at the video of Hitler bemoaning the apparent loss of his Bejeweled high score (sorry, video no longer available), people aside from George Costanza care about those achievements. A decade ago AOL was able to delay its growing irrelevance just because its subscribers couldn't easily figure out how to liberate their address book and email library. In comparison to AOL's customers of 2000, today's iPhone owners invest an order of magnitude more information in their iPhones — and that information is more personal.

What I'm saying isn't exclusive to iPhone owners — those loyal to Android, BlackBerry, and even Symbian experience the same fear of dislocation. That's the point — these platforms are increasingly locking in their owners. I won't be surprised the first time I see a "You can have my iPhone when you pry it from my cold, dead fingers" bumper sticker.

Oh, and one more thing… I hope Apple is successful in convincing Cisco, Microsoft, Google, and others that FaceTime is a good standard for video telephony. I have no idea whether it's the best solution, but we have enough video telephony endpoints out there that it's time to make video calling as easy and interoperable as voice. About time we realize at least part of the promise of the 1964 New York World's Fair.


Unlimited data for Verizon iPhone

Dear Charles:

I read your analysis on the Verizon data plans in today's (1/26/11) USA Today. I am an iPhone owner on the AT&T network, and have been very satisfied. I also own stock in both AT&T and Verizon.

You stated,

"This just provides Verizon with yet another piece of their messaging that says, 'We have the better network, and we can handle as much traffic as you can bring us.'"

Remember something...Verizon hasn't proved anything yet in terms of managing iPhone data on its network. Even more, the iPhone and its data will for now be split across two network providers, not just solely AT&T. Hopefully Verizon has learned something while AT&T has had exclusivity for a few years, but it will seemingly also benefit as voluminous data usage will be dispersed. Your remarks carry an undercurrent of anti-AT&T, which to me is both unwarranted and unfair.

One unbiased subscriber's honest opinion and assessment.


Re: Unlimited data for Verizon iPhone

Don, thanks for your comment. I believe you misread my comments in USA Today when you characterize them as anti-AT&T; let me explain why.

This is about marketing and positioning, not any objective measure of network performance, reliability, call block rates, or any other metrics on which a customer would rate their carrier. By maintaining the "unlimited" data price model for the iPhone, Verizon is able to _position_ itself as differentiated from AT&T in line with the "best network" message that they have long ridden (quite successfully, I might add).

There is nothing in my comment that expresses an opinion about the merit of this claim, merely that the pricing allows them to make it.