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Columnist: iPhone Could Fail Just Like The Newton

Monday, February 26th, 2007 at 1:10 PM - by

The iPhone has an advanced user interface, unlike anything before it. It is also very, very expensive. That could be a prescription for another Newton-like fiasco according to Computerworld on Monday.

One reason it [Newton] failed," David Haskin wrote, "was that the first iteration of its handwriting recognition wasn't very accurate and, since handwriting recognition was a new technology, it was ridiculed mercilessly by comedians and the press. But at least as big a problem was its price: $700 when it was launched.

Apple appears to be repeating the cycle, according to Mr. Haskin, because some recent polls have suggested that few potential customers seem to be willing to foot the $500 to $600 bill for a mobile phone.

Mr. Hasin continued, "It's also becoming clear that Apple may be suffering from excessive hubris. That is evident by its strong demands on its partner in the U.S., Cingular/AT&T. The demands, including a slice of the cellular revenues and control of the sales channel, were so strong that Verizon Wireless turned the deal down."

But not so fast. What's different this time is that there is a clear market demand for a better mobile phone than what's been available. In the case of the Newton, it was a solution chasing a problem. Also, the surveys tend to suggest that Apple and AT&T are very well aware of consumer price sensitivity. Whether or not it's wise for the two partners to reduce the previously announced price of the iPhone before it ships and customer demand is gauged remains an open question.

As for business deals, AT&T likely feels that their gain is Verizon's loss.

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A guest said: (hide)

Mon Feb 26, 2007 3:27 pm

Lots of "potential buyers" said that the original iPod was too expensive, also. Boy what a flop THAT turned out to be!

Apple has had a few missteps. The iMac was ridiculed by many when it first came out, but it essentially saved Apple. The Mac Cube won design awards and high praise, but flopped in sales. Greatness requires risk. Great successes are often accompanied by great failures. Sometimes even great ideas just don't work out for whatever reason. Even though the Newton was abandoned and had its issues, there are many out there still doing yeoman duty and their owners love 'em.

Apple certainly has shown vision and a willingness to take risks like few other vendors out there. At any rate, we will certainly know the answer sometime this coming summer. That's my prediction!

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Tiger said:

member since 17 Jun 2003 with 1018 posts, unranked, send him a message or view his profile

Mon Feb 26, 2007 3:40 pm

Did they forget the original price of the Motorola Razr was also $499???????

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A guest said: (hide)

Mon Feb 26, 2007 5:01 pm

I agree with the two above comments. I'd also like to add that Apple's brand is much much stronger now with consumers (Mac and PC users alike) than it was when the Newton was introduced. At that time I doubt Windows users were interested in anything Apple had to offer but the iPod changed that in a very big way. So there's one more thing the iPhone has going for it that the Newton did not.

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A guest said: (hide)

Mon Feb 26, 2007 6:03 pm

I wish people would stop comparing the price of the iPhone to the price of subsidized phones one gets from the carriers.

These people are doing surveys of people who are used to getting [relatively] crappy phones for "free" so of course they are going to initially balk at the iPhone's price.

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A guest said: (hide)

Mon Feb 26, 2007 8:20 pm

Many people will pay the $499-$599 and use it mostly for Music and Videos! Using it as a cell phone is easily worth $150 over the price of the features of the regular iPod.

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jimothy said:

member since 04 Jun 2004 with 612 posts, unranked, send him a message or view his profile

Mon Feb 26, 2007 8:30 pm

The Motorola V60 was $400 at launch. At the time, it was considered compact and sleek (though it, naturally, looks outdated today), but was very basic: a small, black and white screen; monophonic ringtones (in the initial version); no camera or other nifty gadgets. The iPhone gives you an amazing amount of features, and, adjust for inflation, is only about $50 more than that V60.

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A guest said: (hide)

Tue Feb 27, 2007 12:52 am

The survey mentions that 1% of respondents would switch from their current phone/plan to the iPhone when it is launched.

Steve Jobs' target market for the iPhone is — get this — 1% of the mobile phone market.

Coincidence?

I'm sure Apple has done their own market research, and has specifically targetted a segment of the market that they wish to sell the iPhone to. This is not the $30/month plan market, neither is it that vast ocean of people complaining about the lockdown on third party applications for the iPhone. Apple's market is the 1% of the market who will be buying a new phone in the next two years, and will ditch their current combination of iPod Nano + Palm Treo/Blackberry/HTC to get one device that does the job of three, and will pay the price that Apple is asking, to get the features that Apple is offering: easy call establishment, easy management of multiple calls, simple and efficient access to voice mail, beautiful web browsing on a mobile device, and watching the latest episode of "Lost" while on the train to the office.

Just the Visual Voicemail feature itself would save me 50% of the time I normally spend listening to voicemail. That's not a lot of time per year, but I'd like to be able to jump straight to the "urgent" voice mail (from the guy I'm supposed to have a meeting with in an hour) and leave the "non-urgent" voice mail (my girlfriend reminding me she loves me, or reminding me to get milk on the way home) for later.

Some people will buy the iPhone exactly because it is expensive. These are the same people who buy expensive cars and expensive suits so they can go and meet their expensive friends at expensive restaurants and have expensive meals. They use the conspicuously expensive things in their lives as status symbols. Some people will pony up the cash simply because the iPhone is (to them) a beautiful, elegant piece of industrial design which will match the rest of their Prada, and happens to be wonderfully functional to boot.

I expect the iPhone will sell like hot-cakes, and there will be backorders for the next 20 million units.

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A guest said: (hide)

Tue Feb 27, 2007 12:55 am

"Online market research firm Compete Inc. surveyed 379 people in the U.S."

Is 379 people a meaningful sample size for the population of the USA?

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A guest said: (hide)

Tue Feb 27, 2007 7:09 am

And also keep in mind, that when you're asked if you're willing to spend 500$ on something you never held in your hand before, you're very likely to give a shaky answer or even a "no". But once you've seen it in your friend's hands and touched one yourself, you'll suddenly change your mind. "I'll take two" ...

People will drool and the iPhone will be a success!

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