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Hidden Dimensions - Apple is Outsmarting the iPhone's Competition

"You can't expect to win unless you know why you lose."

- Benjamin Lipson

There are people with good sense, industry experience, and a feel for the wireless market who see the iPhone as just another smartphone. One with limitations and some serious weaknesses in terms of big business. I don't think they're looking deep enough, or with an Apple perspective, or with a view to the future.

The Apple iPhone is going to make some serious inroads into our lives and change the way we use hand held computers, indeed, even our desktops. To fail to understand that is to fail in the wireless market. Some companies that sell mobile phones are going to fall into hard times as a result over the next five years. That's because they don't know why they're winning now, nor do they have the corporate insight to see how they're going lose in the future as the smartphone evolves.

The Underlying Elements That Matter

It's the OS, Stupid. In time, it will be found that the development of the user interface on smartphones will be the driving factor in consumer expectations and market success. How fast Apple can innovate compared to the other manufacturers like Motorola, Nokia and Sony Ericsson will drive the adoption of a new breed of hand held, wireless devices.

In Apple's case, the use of Mac OS X is the extraordinarily shrewd move that will allow that rapid, competitive innovation to happen. When we think about the expertise Apple's competitors have, only Microsoft has experience with a User Interface. But Microsoft doesn't design the wireless hardware that Windows Mobile runs on. That decision is left to Motorola, Nokia, and Sony Ericsson. Right out of the gate, Apple has given themselves a key advantage that has been working on the Macintosh side for a long time. Namely, as Steve Jobs likes to quote Alan Kay, "People who are really serious about software should make their own hardware."

For far too long, largely based on the hardware capabilities and hand-held state-of-the-art, we've been limited to toy OSes like Symbian. Now that the CPUs and memory systems support it, we're going to see much more capable OSes in the palm of our hands: Linux, Windows and Mac OS X.

Which of those OSes is both Unix and has the force of the world's greatest company in terms of innovation, user interface, and customer enthusiasm?

Apple, over the years, has shown a unique, focused ability to put its corporate will and intelligence behind a single device. The whole company's resources can be devoted to the iPhone, not only in terms of the hardware and integrated OS, but also in terms of marketing, retail sales, and integration with its own technologies, like iTunes.

That should scare the hell out of Apple's competitors.

Evolution. Those who are critical of the iPhone in its current incarnation are in the same state of mind that Rio was when Apple came out with the original iPod in October 2001. That is, a vast underestimation of Apple's ability to not only innovate and improve on the device, but to appeal to partners who want to get in on the action.

The pace of Apple's ability to change the iPhone as the market and technology evolves will be a major challenge to both the business models of the competitors and their technical abilities. If one doubts that, one need only review the articles written as a result of taking an iPhone apart. Rather than exhibiting the careless mistakes of a newbie to the market, there was instead serious engineering fascination and marvel. Apple is a hardware company that's been building fabulous, compact, beautiful iPods, PowerBooks and MacBooks for years.

Why should we be surprised that the iPhone is also rugged, elegant, and well engineered? Similarly, why should we be surprised when major new iPhone features take the competition by surprise?

Infrastructure. When Apple first started talking about the desktop computer as our digital hub, they weren't kidding. And the mobile phone companies weren't listening. Instead of seeing the mobile phone as an extension of the desktop computer, they saw it as a stand alone device, precisely because they weren't in the computer business. (It's that well known business issue of knowing what business you're really in.) If anything, Apple has the required expertise in this market as opposed to the fanciful notion that they are new and inexperienced in the monstrous wireless market.

The activation of the iPhone is an example of the kind of infrastructure that Apple has developed. We plug our iPods into a dock, sync our music and contacts, and update the software. The iPhone is just an iPod that makes phone calls, so it didn't require a stroke of genius to see that the iPhone activation could be easy and painless with iTunes plus an Apple ID.

Putting key pieces into place until the whole becomes more than the sum of the parts has been an Apple theme for quite some time. We saw Sound Jam evolve into iTunes for ripping, then the iPod, then the iTunes Store. The rest of the industry has nothing to compare to this. Think about it. Every time you charge your iPhone, iTunes has the opportunity to check the software and install fixes and new features.

This elegant, evolving infrastructure should also scare the hell out of Apple's competitors.

As if that weren't enough, Apple figured out how to make the buying experience cheerful and productive with a nation-wide chain of Apple stores that, oh by the way, also sell some pretty nifty computers, accessories, and the Apple TV. Analysts are seeing this Apple triad, Mac, music, and iPhone, as a powerful revenue generator, and that's why the stock projections are so positive.

The Enterprise View

Right now, the iPhone is not a mature enterprise instrument. If Apple had tried to shoehorn the iPhone into the business sector, it would have added complications and defocused the product from its very large and intended audience. Remember, of those billion cell phones sold each year, only a fraction are used by Fortune 100 companies tied into MS Exchange.

So it made perfect sense for Apple to do what it does on the Macintosh side, namely, build a mobile phone for the rest of us, that demonstrates simplicity, technical restraint, and joy.

Because the iPhone doesn't have that Enterprise maturity, IT managers are probably right to deflect their users away from it and remain focused on the BlackBerry. The BlackBerry is designed, bottom to top, to appeal to large corporations who maintain Exchange servers and fret about protecting company sensitive information splattered about in e-mail inboxes.

What they are overlooking, however, is that changes in the world culture and changes in the technology will eventually overcome that fastidious devotion to The Way Things Are. The iPhone creates a new platform. It's Mac OS X basis will propel it into new user experiences that will eventually surface as part of the collective mind of the mobile phone community. That's when the BlackBerry sub-culture will revolt and create problems for RIM.

Preparing for the Future

Apple will do some expected things and some unexpected things that will change the iPhone from first generation newbie to something that Captain Kirk could only dream about. We know that, in time, developers will come up with fabulous add-ons. Once the reputation of the iPhone for reliability and security is insured, some developers may be allowed into the internals. We know that Apple will also be adding features and functionality via updates.

What we can't see right now are those magical building blocks on the whiteboard in Phil Schiller's office. We can only guess at novel content distribution agreements. Hidden features of the iPhone that may be unlocked. Future licensing that will allow the iPhone to better integrate into business systems for those who just must have it. Possible movement to AT&T's 3G network. MacBooks and traditional iPods with multi-touch displays. Video and audio phone calls. Retail purchases, via credit card, simply by waving an iPhone and utilizing a very secure radio link.

None of these ideas for the future will evolve in a satisfactory way unless the mobile phone develops as a secure, trusted, integral part of our lives and also lives within an understandable, human-focused digital hub and vendor provided infrastructure. The hand held mobile phone is no longer just a telephone with some added features. It's an emerging platform for a new digital culture. The "electronic wallet" that the carriers imagine for the future will have a tough time gaining traction, compared to Apple, amidst the current dysfunctional relationship they have with their manufacturer pseudo-partners.

In short, Apple can change and innovate faster with Mac OS X, exploit their in-place infrastructure, and therefore evolve and mature faster than other smartphones in order to create a next generation device.

That's why the Apple iPhone is not just another smartphone. Most of all, that should have Apple's competitors really worried.

<P><em>John Martellaro is the Senior Editor, Analysis & Reviews for </em>The Mac Observer <em>and a freelance writer. He is a former U.S. Air Force officer and has worked for NASA, White Sands Missile Range, Lockheed Martin Astronautics, the Oak Ridge National Laboratory and Apple Computer, where he worked as a Senior Marketing Manager for Science and Technology, Federal Account Executive, and High Performance Computing Manager. His interests, in addition to all things Apple, include alpine skiing, science fiction, astronomy and Perl. John lives in Denver, Colorado.</em></p>


John Martellaro is a senior scientist and author. A former U.S. Air Force officer,he has worked for NASA, White Sands Missile Range, Lockheed Martin Astronautics, the Oak Ridge National Laboratory and Apple Computer. During his five years at Apple, he worked as a Senior Marketing Manager for science and technology, Federal Account Executive, and High Performance Computing Manager. His interests include alpine skiing, SciFi, astronomy, and Perl. John lives in Denver, Colorado.

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A guest said: (hide)

Amen!

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A guest said: (hide)

Maczealots would buy even a turd with the Apple logo.

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gslusher said:

member since 13 Nov 2002 with 2088 posts, unranked, send him a message or view his profile

To put things in perspective, from the linked "iPod Cemetery" site:

"Alas, the iPod didn't know how to work with Windows, was FireWire-only at first, and only sold 125,000 units in its first two months."

I expect that there were 125K iPhones sold in the first 2 hours.

As I wrote in another discussion, ask yourself this: how many teens (and younger), non-professionals, college students want an iPhone? Now, ask the same question about the BlackBerry and Treo. Now, you understand. As John wrote (and I did, earlier), the iPhone is "for the rest of us." Now, if I can just wedge that $600 into the budget. (I'll probably end up waiting until late Fall; by then, there may be an iPhone 1.1.)

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gslusher said:

member since 13 Nov 2002 with 2088 posts, unranked, send him a message or view his profile

Guest wrote:
Maczealots would buy even a turd with the Apple logo.

It's not just "Maczealots." It seems that just about everyone who handles an iPhone wants one. Apple is on the way to selling more iPhones in the first month or two than all the Treos ever sold, over a period of several years.

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A guest said: (hide)

Guest wrote:
Maczealots would buy even a turd with the Apple logo.

You can bet your ass that an Apple turd would be a piece of functional art that everyone would want.

And MS would spend the next ten years trying to come up with their own version.

(MS does have more experience in this area, though, so it's be hard to say who'd win that one...)

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A guest said: (hide)

"When Apple first started talking about the desktop computer as our digital hub, they weren't kidding."

I most emphatically agree. I've always maintained that iTunes is Apple's secret weapon in its drive for global consumer electronics hegemony. They've figured out, perhaps by accident, that a UI that makes a small portable device like the iPod a pleasure to use is not a UI that is suitable for managing the device. In fact there is no way that managing the iPod (or iPhone) directly could be made as convenient as managing it on your computer through iTunes.

iTunes is a barrier to entry for anyone wanting to compete in the same space as iPod, iPhone and iTV (and whatever future iTunes-managed products Apple releases). There are hundreds of millions of people already opening iTunes regularly to manage their Apple devices. Unless Apple's competitors have a very compelling product, most of these people will not buy those products if it means they will have to deal with two device management packages.

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A guest said: (hide)

"In time, it will be found that the development of the user interface on smartphones will be the driving factor in consumer expectations and market success."

That's already known. I think what are you -trying- to say is that -software- will be driving factor, maybe? When you look at the wide variety of phone types out there, you can see the plethora of ways that exist for users to interact with mobile devices, and no one way pleases everyone.

"How fast Apple can innovate compared to the other manufacturers like Motorola, Nokia and Sony Ericsson will drive the adoption of a new breed of hand held, wireless devices."

That's a sentence? Convenient to leave Samsung out of the picture from Apple's perspective.

"In Apple's case, the use of Mac OS X is the extraordinarily shrewd move that will allow that rapid, competitive innovation to happen. When we think about the expertise Apple's competitors have, only Microsoft has experience with a User Interface."

Again, you mean the -software- user interface. I wonder if John even knows about the F700 yet, ah, why would he bother himself with the future of cell phones?

"But Microsoft doesn't design the wireless hardware that Windows Mobile runs on. That decision is left to Motorola, Nokia, and Sony Ericsson."

A decision that has made Windows computers running on the hardware of IBM, Dell, HP, Toshiba, Sony and many other the dominant platform for well over a decade now.

"Right out of the gate, Apple has given themselves a key advantage that has been working on the Macintosh side for a long time."

Wait, huh? When did the Macintosh take over the market share? I thought they were still in the single digits around 6% compared to over 90% for Windows/various hardware vendors.

"For far too long, largely based on the hardware capabilities and hand-held state-of-the-art, we've been limited to toy OSes like Symbian. Now that the CPUs and memory systems support it, we're going to see much more capable OSes in the palm of our hands: Linux, Windows and Mac OS X."

Agreed, though also agreed on the qualification there, state-of-the-art.

"Which of those OSes is both Unix and has the force of the world's greatest company in terms of innovation, user interface, and customer enthusiasm? "

Windows.

"Apple, over the years, has shown a unique, focused ability to put its corporate will and intelligence behind a single device. The whole company's resources can be devoted to the iPhone, not only in terms of the hardware and integrated OS, but also in terms of marketing, retail sales, and integration with its own technologies, like iTunes."

Apple is great at providing an integrated solution of content & device. Their greatest success came when they put a renewed marketing push behind the 4th generation iPod to catapult that device to the forefront of the portable music player market.

"That should scare the hell out of Apple's competitors."

To an extent, Apple still has a long way to go in the mobile phone market and are unfortunately limited to a single carrier for the next 5 years. In that respect, Apple will be completely incapable of competing in sales to any other carrier.

"The pace of Apple's ability to change the iPhone as the market and technology evolves will be a major challenge to both the business models of the competitors and their technical abilities. If one doubts that, one need only review the articles written as a result of taking an iPhone apart. Rather than exhibiting the careless mistakes of a newbie to the market, there was instead serious engineering fascination and marvel."

Where there are lot of reviews for the first three generations of iPods showing that Apple had made a lot of careless mistakes that a newbie would make? That would the be conclusion, but I don't see them. The first 3 generations of the iPod were the great success that the iPod is now known to be. It wasn't until the 4th quarter of 2004 that sales started to grow. That coincided with the launch of the now familiar iPod television commercials. The success of the iPod came not from converting millions of consumers from another device onto the iPod, but from growing that market through skilled advertising. The great majority of people in America do not know the names Rio or iRiver, but they do know Nokia, Samsung, Motorola and Sony Ericsson.

"Infrastructure. Instead of seeing the mobile phone as an extension of the desktop computer, they saw it as a stand alone device, precisely because they weren't in the computer business. If anything, Apple has the required expertise in this market as opposed to the fanciful notion that they are new and inexperienced in the monstrous wireless market."

Apple has made a phone that does integrate very well with the computer. This has always been a strength for Apple. As previously mentioned, the integration of iTunes with the iPod is fantasic, and that's still the case with the iPhone. When it comes to infrastructure of a productivity tool, Apple not only failed to clear the bar, they went completely under it. An inferior data network, inability to edit the most common productivity document formats, inability to synchronize with the most common email, calendar and contact servers, an inferior voice network, the list goes on. Many of these things can, and I hope will be addressed in future upgrades, but the iPhone is an inferior device when looking at the infrastructure that it relies on.

"The activation of the iPhone is an example of the kind of infrastructure that Apple has developed. We plug our iPods into a dock, sync our music and contacts, and update the software. The iPhone is just an iPod that makes phone calls, so it didn't require a stroke of genius to see that the iPhone activation could be easy and painless with iTunes plus an Apple ID."

Maybe the genius had a stroke? Activations have been far from painless. Many users had to wait days for their iPhones to be activated. In some cases when porting a number from another carrier, users were without a working phone during this time. As the kinks get worked out, the process will get better, but activation has been one of the biggest stories on the negative side for the iPhone since its launch. Another drawback is the lack of support for corporate liable accounts, which prevents large institutions from buying many iPhones, pooling the minutes, and distributing them around the organization.

"Think about it. Every time you charge your iPhone, iTunes has the opportunity to check the software and install fixes and new features.

This elegant, evolving infrastructure should also scare the hell out of Apple's competitors."

Please do think about that. First, you're wrong, it doesn't happen every time you charge an iPhone. You have to plug the iPhone into your computer and synchronize with iTunes in order to receive updates. A great many of devices do not require that step for the user to receive an update to their phones. Instead updates are pushed to the devices wirelessly. Why? Because it's a wireless device. Take advantage of the capabilities of the device. It would be bad for an iPhone user on the go, who is only charging their iPhone from a wall socket and not their home computer, to go without a needed security update because the only way to receive the update is to synchronize with your computer.

"Analysts are seeing this Apple triad, Mac, Music, and iPhone, as a powerful revenue generator, and that's why the stock projections are so positive."

It's a great trio of products & services. Apple is on a roll, no doubt. $200 soon?

"Right now, the iPhone is not a mature enterprise instrument. If Apple had tried to shoehorn the iPhone into the business sector, it would have added complications and defocused the product from its very large and intended audience. Remember, of those billion cell phones sold each year, only a fraction are used by Fortune 100 companies tied into MS Exchange."

Ah, a fraction, a meaningless word. What is that fraction John? 3/4? 7/8? 99/100? I'm obviously quoting the wrong numbers, just to show that the statement you've made is meaningless, but well worded to push your agenda. Especially since the Fortune 100 companies represent a fraction of the companies that use Exchange (and by fraction I mean less than 5%, is it really less than 1%? I didn't look it up.) You are right on the point that Apple should not try to shoehorn the iPhone into business. They need to have much better infrastructure in terms of a solid data network, reliable integration with Exchange (instead of an IMAP hack), and greater productivity tools in order to make any significant sales in that area.

"So it made perfect sense for Apple to do what it does on the Macintosh side, namely, build a mobile phone for the rest of us, that demonstrates simplicity, technical restraint, and joy."

Ah, okay, so that's the fraction you were talking about. The iPhone is for the 6% of the population that is "the rest of us."

"Because the iPhone doesn't have that Enterprise maturity, IT managers are probably right to deflect their users away from it and remain focused on the BlackBerry. The BlackBerry is designed, bottom to top, to appeal to large corporations who maintain Exchange servers and fret about protecting company sensitive information splattered about in e-mail inboxes."

Windows Mobile and Palm based devices are also well represented in the Enterprise space. It's not just large corporations that use these devices, it's the startups of 10-100 employees, the SMB's of 200-2000 employees, and on and on. By "large corporations" you really just mean "businesses."

"What they are overlooking, however, is that changes in the world culture and changes in the technology will eventually overcome that fastidious devotion to The Way Things Are. The iPhone creates a new platform. It's Mac OS X basis will propel it into new user experiences that will eventually surface as part of the collective mind of the mobile phone community. That's when the BlackBerry sub-culture will revolt and create problems for RIM."

I don't know that anyone is overlooking that, they are just running smart businesses. There will come a time when most PDA phones look somewhat similar to the iPhone, with even better designed touchscreen interfaces than the iPhone has now. There will come a time when that is an economically viable option for the majority of people. When that time comes, Apple will not be the only manufacturer with devices that have been on the market at this time. It is easy to take a new device and put it on top of the infrastructure that you already have (new mobile phones are released and transitioned to end of life faster than it takes A-Rod to create controversy). It's a lot harder to get out of an exclusive deal with AT&T's notoriously bad networks and implement a 5 9's email delivery system that integrates well with a third-parties server (integration with its own products is something Apple is good at, but has not had any great success at integrating with anything Microsoft, and failed to work with the bigger and better carriers).

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Terrin said:

member since 29 Jan 2006 with 414 posts, unranked, send him a message or view his profile

This is a good article. However, Competitors will have a hard time adapting for even another reason. Apple has a legion of devoted fans. Like with the iPod, Apple can generally count on these fans to buy the first round of products, which allow it to promote the product's success and fund subsequent revisions. Moreover, since Apple's roots are in print markets, when it come out with a product, the product is going to get a lot of coverage. Free coverage. Competitors could come out with great alternatives, but it will never get the exposure Apple gets. Of course, this is a double edged sword, when Apple gets it wrong, a lot more people are going to know about that as well.

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A guest said: (hide)

AC's quibbling about your comments notwithstanding, this seems like a good, balanced piece.

I DO have to take one shot at the "inferior data network" of AT&T. Yes, it's far from the fastest, but, only two weeks into the iPhone's lifecycle, it's obvious that (a) Apple made a reasonable compromise between availability (VZ chose not to relinquish its deathgrip over product design & distribution) and functionality. (I often have to get by using my RAZR over a GPRS network and find it QUITE USABLE for email and other low-bandwidth requirements such as every message-only Blackberry has.)

Let me add on to your comments about infrastructure. The many third-party support tools for Treo, BlackBerry and WinMobile phones are largely incompatible with one another, expensive to license and utilize, and did not spring full-grown from Bill Gates's forehead the instant he shipped the miserable v1.0 devices. (Reviews of the current Windows mobile functionality are <b>still</b> that it's miserable, and the Palm OS is still single-threaded for single-activity-at-a-time limitations, but that's just a sidenote to Apple's advantage with OSX. And MSFT has <b>further</b> revenue streams attached to WinMobile devices, since they have an ecosystem of revenue streams by getting corporate IT shops to use MS-driven servers, MS-driven mail systems, MS-Office-based document exchange and sharing tools, etc. I doubt we'll ever see Apple try to sell all these big-ticket items just to justify support of a few dozen / few hundred iPhones at a shop.

The other note: if EVERY sale of a WinMobile device got replaced by an iPhone sale, and Apple served that marketplace PERFECTLY but failed to attract individuals to the iPhone -- that is, if Apple did exactly as well as MSFT does now -- the iPhone would FAIL to meet anybody's expectations. Some folks measure Apple by very strange yardsticks -- "how can they claim to be any good without Flash support in their browser?" or "it's worthless if the data that's not stored on an iPhone can't be centrally erased by IT." -- but the enthusiasm shows that Apple is re-inventing the smartphone, not making a better one.

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Bryan said:

member since 11 Jun 2001 with 7340 posts, TMO Staff, send him a message or view his profile

Guest wrote:
&quot;In time, it will be found that the development of the user interface on smartphones will be the driving factor in consumer expectations and market success.&quot;

That's already known. I think what are you -trying- to say is that -software- will be driving factor, maybe? When you look at the wide variety of phone types out there, you can see the plethora of ways that exist for users to interact with mobile devices, and no one way pleases everyone.

I personally don't cotton to tit-for-tat epic posts like Guest's -- I hate writing them, too (though I have written a few such columns over the years). Accordingly, I'll cut to the chase and suggest that the Guest is missing most, or all, of John's eloquent points. I think this stems from Guest's Windows-centric viewpoint, where Microsoft's Sales = Dominance = de facto Best.

In reality, John wasn't talking about market dominance in any way, shape, or form. Market penetration, yes, and market influence, for sure. John's talking about Apple's ability to make best-in-class products, an issue that is subjective on the computer side and demonstrable on the digital media device side.

These are distinctly different subjects from what the Guest thinks the subject is -- and that's market share. Mind you, that's an opinion based on his post. I don't pretend to speak for him.

This is an issue that many in the Windows world don't get, and they often approach columns written by members of the Mac (and now the iPod) community from that different view point, and lots of zany misunderstanding often ensues. Such is the case here.

Lastly, this might well apply to entrenched members of the pre-iPhone mobile phone industry, too, as Guest might well be from that market. This industry is new territory for me as an Observer, and it will be interesting to watch how the two markets interact.

IMNHO.

Bryan

Editor

iPO

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Krioni said:

member since 26 Nov 2001 with 15 posts, unranked, send him a message or view his profile

Re: A Guest (5:17 PM):

Wow. You're argument is that because Windows is dominant in the desktop PC market, Apple's iPhone won't become dominant in mobile devices. Um, iPod? You sound like you think good software development and good interface design are easy. You claim the iPod only succeeded because of marketing. Have you used one? It's the integration, the total package, the ease of use that brought the iPod to the top.

Oh, and you think Apple being tied to AT&T will be a problem long-term? What about the problem for Verizon losing customers because they only have annoying-to-use phones? Success will breed success for AT&T - more income means more money to invest in improving the network. More people willing to shell out the money for a data plan (because it's finally REALLY useful) means even more money. Verizon made a huge mistake in passing on an iPhone deal. About as big a mistake as some that Apple made in the late 80's.

' "Which of those OSes is both Unix and has the force of the world's greatest company in terms of innovation, user interface, and customer enthusiasm? " '

'Windows.'

That's just too dumb for words.

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A guest said: (hide)

Bryan wrote:
Guest wrote:
&amp;quot;In time, it will be found that the development of the user interface on smartphones will be the driving factor in consumer expectations and market success.&amp;quot;

That's already known. I think what are you -trying- to say is that -software- will be driving factor, maybe? When you look at the wide variety of phone types out there, you can see the plethora of ways that exist for users to interact with mobile devices, and no one way pleases everyone.

I personally don't cotton to tit-for-tat epic posts like Guest's -- I hate writing them, too (though I have written a few such columns over the years). Accordingly, I'll cut to the chase and suggest that the Guest is missing most, or all, of John's eloquent points. I think this stems from Guest's Windows-centric viewpoint, where Microsoft's Sales = Dominance = de facto Best.

In reality, John wasn't talking about market dominance in any way, shape, or form. Market penetration, yes, and market influence, for sure. John's talking about Apple's ability to make best-in-class products, an issue that is subjective on the computer side and demonstrable on the digital media device side.

These are distinctly different subjects from what the Guest thinks the subject is -- and that's market share. Mind you, that's an opinion based on his post. I don't pretend to speak for him.

This is an issue that many in the Windows world don't get, and they often approach columns written by members of the Mac (and now the iPod) community from that different view point, and lots of zany misunderstanding often ensues. Such is the case here.

Lastly, this might well apply to entrenched members of the pre-iPhone mobile phone industry, too, as Guest might well be from that market. This industry is new territory for me as an Observer, and it will be interesting to watch how the two markets interact.

IMNHO.

Bryan

Editor

iPO

How is it demonstrable on the digital media device side? Is the data that demonstrates it be best in class the same type of data that makes your opinion that it is subjectively best in class on the PC side? And wouldn't that make it demonstrable then that they are not best in class on the PC side?

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A guest said: (hide)

It's easier to say, "he doesn't get it," than it is to disprove any of those points. That is what you do when you cannot voice it in a cohesive and accurate argument, throw up your arms and claim victory because the facts in evidence are being "viewed" incorrectly.

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A guest said: (hide)

All those people criticizing AT&T's lousy network: I would not doubt for one minute that AT&T's primary corporate objective right now is "Upgrade the Network". Apple has provided them with a weapon for trumping their competitors and they know that network quality is holding them back from maximizing the benefits of the Apple partnership. It's not as if they don't hear it from every direction.

As an aside, can you imagine what it's like being on the other end of the phone line when Steve Jobs called AT&T to 'urge' them to fix the activation problems that cropped up on week one?

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A guest said: (hide)

The iPod succeeded because of marketing?

Boy that's grasping at straws.

Marketing gets you to check out the product. If it's really good, word of mouth takes over. If it sucks, word of mouth takes over too. But in a negative way.

Case in point: Spiderman 3. Or closer to home: Microsoft Origami.

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A guest said: (hide)

Quote:
"Which of those OSes is both Unix and has the force of the world's greatest company in terms of innovation, user interface, and customer enthusiasm? "

Windows.

Windows is *not* UNIX. How can you get such a simple thing wrong?

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A guest said: (hide)

Krioni wrote:
Re: A Guest (5:17 PM):

Wow. You're argument is that because Windows is dominant in the desktop PC market, Apple's iPhone won't become dominant in mobile devices. Um, iPod? You sound like you think good software development and good interface design are easy. You claim the iPod only succeeded because of marketing. Have you used one? It's the integration, the total package, the ease of use that brought the iPod to the top.

Oh, and you think Apple being tied to AT&amp;T will be a problem long-term? What about the problem for Verizon losing customers because they only have annoying-to-use phones? Success will breed success for AT&amp;T - more income means more money to invest in improving the network. More people willing to shell out the money for a data plan (because it's finally REALLY useful) means even more money. Verizon made a huge mistake in passing on an iPhone deal. About as big a mistake as some that Apple made in the late 80's.

' &quot;Which of those OSes is both Unix and has the force of the world's greatest company in terms of innovation, user interface, and customer enthusiasm? &quot; '

'Windows.'

That's just too dumb for words.

If you think that is what I was saying, then you should go reread the post. I believe the iPhone will do very well, but it certainly won't be dominant any time soon. "Um, iPod" Um, read the part about the difference in the markets for the mp3 player and cell phone industry. About how, oh heck, I'll quote it for you, " The success of the iPod came not from converting millions of consumers from another device onto the iPod, but from growing that market through skilled advertising. The great majority of people in America do not know the names Rio or iRiver, but they do know Nokia, Samsung, Motorola and Sony Ericsson." If you think good software and UI design are what made the iPod great, you also need to educate yourself, as neither of those were developed by Apple. PortalPlayer's platform was used for the OS and contracted Pixo to design and implement the UI. I'd also like to thank you for reiterating one of my points. The integration of iTunes and iPod is great, as I wrote, "This has always been a strength for Apple. As previously mentioned, the integration of iTunes with the iPod is fantasic, and that's still the case with the iPhone." This combined with the marketing push are what brought the iPod to the top. You can go look as the sales charts if you would like, and notice that first jump in Q4 2004. Whether or not AT&T can bring up a reliable network is to be seen, and yes of course added money will help in that area. Simply switching to the current 3G network that AT&T has would be a drastic improvement in download speeds. Much of what you wrote is too dumb for words, but I took the time. In case you couldn't tell, that one liner was a joke. It was obvious what John was getting at, and it was obvious which one he would be first to dislike. But from your lack of comprehension of the rest of the post and how you had to quote that one, I don't expect to get a reasoned response from you on this one either, if anything another reactionary post that shows your bias and lack of reading comprehension.

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A guest said: (hide)

Guest wrote:
The iPod succeeded because of marketing?

Boy that's grasping at straws.

Marketing gets you to check out the product. If it's really good, word of mouth takes over. If it sucks, word of mouth takes over too. But in a negative way.

Case in point: Spiderman 3. Or closer to home: Microsoft Origami.

See above post, Apple's marketing sold the iPod, it was out for almost 3 years before sales took off and it coincided with the new, now very famous, iPod commercials. The market was in its infancy prior to Apple's entry. The vast majority of consumers couldn't tell you what an mp3 was, let alone that there were devices with a piece of memory or a hard drive in them that would let you play them on headphones. This type of marketing is known as consumer education. Defining a market and then capturing the sales, and yes, I'll say it now for a third time, the integration of iTunes and the iPod is great. But don't delude yourself thinking that Apple released the iPod and all of a sudden sold 100 million devices the next year, or even the year after that.

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Intruder said:

member since 07 Jul 2004 with 3149 posts, TMO Mac Specialist, send him a message or view his profile

Anonymous wrote:
If you think good software and UI design are what made the iPod great, you also need to educate yourself, as neither of those were developed by Apple. PortalPlayer's platform was used for the OS and contracted Pixo to design and implement the UI.

Your statement here doesn't really make much sense. How does PortalPlayer and Pixo doing the OS and UI design (respectively) diminish the quality of those parts?

What many consider the key to the iPod's success is the combination of simple yet elegant hardware design with a simple yet elegant UI. Doesn't really matter who made the UI. It works really well. Apple doesn't have a monopoly on great UIs.

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ctopher said:

member since 25 Aug 2006 with 134 posts, unranked, send him a message or view his profile

Guest is holding his own well here and while the editor of this site doesn't "cotton" to tit-for-tat epic posts I found it to be exactly the type of web 2.0 material I like to read. I don't agree with everything the guest said, but I thought he/she was very measured and reasonable in the rebuttals.

I do agree with the notion that Apple will show the world what a best in class device looks like, but I disagree with Bryan when he said that "These are distinctly different subjects from what the Guest thinks the subject is -- and that's market share."

What I mean is, I think Guest was talking Market Share, and I also think that Mr. Martellaro did in fact refer to market share. What "should have Apple's competitors really worried."? Loss of sales, loss of market share.

To use the old BMW analogy, yes, they make superior cars and they show the world what a best in class device looks like, but they don't lead the market in sales and they don't have the rest of the market worried. OK, the rest of the market may not necessarily be "competitors" just as Chevy is not really a competitor to BMW, Mr. Martellaro implies that the iPhone is not really a competitor to the other smartphones. So who are the competitors? Just exactly who should be worried?

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A guest said: (hide)

Guest wrote:
That's a sentence? Convenient to leave Samsung out of the picture from Apple's perspective.

Uhm, wow, you win! You're not Korean-American, now are you? He also forgot Lucky-Goldstar! How dare he! The outrage!

Guest wrote:
Again, you mean the -software- user interface. I wonder if John even knows about the F700 yet, ah, why would he bother himself with the future of cell phones?.

Oh, well, that settles it. You're a Samsung PR rep. Flash UI, WAP browser, woohoo, it's got great specs! We all know great specs mean a great user experience!

Guest wrote:
A decision that has made Windows computers running on the hardware of IBM, Dell, HP, Toshiba, Sony and many other the dominant platform for well over a decade now.

"dominant" isn't what John's quote was about. He was talking about pace of innovation. How long did it take MS to write its last OS? And, is it even possible to downsize Vista on a handheld device, like OS X has been?

Guest wrote:
Wait, huh? When did the Macintosh take over the market share? I thought they were still in the single digits around 6% compared to over 90% for Windows/various hardware vendors..

Another misunderstanding of John's point. He was talking about pace of innovation, but don't let that stop you from your talking points.

Guest wrote:
Windows.

Now, we know you're in PR or marketing for Samsung if you think Windows is based upon Unix.

Guest wrote:
To an extent, Apple still has a long way to go in the mobile phone market and are unfortunately limited to a single carrier for the next 5 years. In that respect, Apple will be completely incapable of competing in sales to any other carrier.

Why do your responses not fit John's comment you are quoting? Why not just write an opinion piece of your own, instead of this charade of pretending to dispute John's points. I mean, how have you refuted anything he has written? You're just like a politician. You quote something John has said, and then respond with something completely different?!?

As for your above comment, this is exactly why you don't get it. Apple is not competing for sales to carriers. It is competing for sales to end-users.

Guest wrote:
Where there are lot of reviews for the first three generations of iPods showing that Apple had made a lot of careless mistakes that a newbie would make? That would the be conclusion, but I don't see them. The first 3 generations of the iPod were the great success that the iPod is now known to be. It wasn't until the 4th quarter of 2004 that sales started to grow. That coincided with the launch of the now familiar iPod television commercials. The success of the iPod came not from converting millions of consumers from another device onto the iPod, but from growing that market through skilled advertising. The great majority of people in America do not know the names Rio or iRiver, but they do know Nokia, Samsung, Motorola and Sony Ericsson.

Before you nitpicked John's sentence structure, did you happen to look at your own?

I suppose we can all argue about the exponential growth of iPod sales. Certainly the sales in the first few years seem miniscule by today's standards, but at the time, they seemed just as exponential.

If you believe Ipod success was due to smart marketing then it stands to reason that any MP3 competitor could achieve similar or at least modest success by utilizing the same model. Apple certainly doesn't have a monopoly on smart marketing, does it? Or maybe your conclusion isn't everything you think it is. Why the omission of Sony or Samsung or Microsoft? Surely, they competed in the MP3 space and have the financial resources and brand awareness to make a dent in iPod sales?

Guest wrote:
When it comes to infrastructure of a productivity tool, Apple not only failed to clear the bar, they went completely under it. An inferior data network, inability to edit the most common productivity document formats, inability to synchronize with the most common email, calendar and contact servers, an inferior voice network, the list goes on. Many of these things can, and I hope will be addressed in future upgrades, but the iPhone is an inferior device when looking at the infrastructure that it relies on.

Hardly seems worth dissing over, seeing as you note, "many of these things can, ... be addressed in future upgrades,"

Guest wrote:
Maybe the genius had a stroke? Activations have been far from painless. Many users had to wait days for their iPhones to be activated. In some cases when porting a number from another carrier, users were without a working phone during this time. As the kinks get worked out, the process will get better, but activation has been one of the biggest stories on the negative side for the iPhone since its launch. Another drawback is the lack of support for corporate liable accounts, which prevents large institutions from buying many iPhones, pooling the minutes, and distributing them around the organization.

Many? Is that a majority or minority? Is 2% "many"? Since you admit this is being "worked out", how is this even an issue in John's context? And we all know that many of these activation issues would have occurred even with human intervention, seeing as many were related to billing addresses being different zips than usage addresses.

Have you considered that the time saved by the vast majority of users in purchasing and activating an iPhone, far outweighs the time lost by a fraction of users not having timely activation? Let's say 500,000 buyers. 98% of those took no more than 5 minutes to buy, and 5 minutes to activate. Let's say on average it takes normal cellphones to be bought and activated about 30 minutes. So, 20 minutes is saved. Multiply by 490,000 and you get, 9.8 million minutes saved. And, on the negative side of the ledger we have 10,000 users inconvenienced by, let's say 3 hours each or 180 minutes, giving us 1.8 million minutes lost. iTunes activation was a net positive even with the activation problems.

Guest wrote:
Please do think about that. First, you're wrong, it doesn't happen every time you charge an iPhone. You have to plug the iPhone into your computer and synchronize with iTunes in order to receive updates. A great many of devices do not require that step for the user to receive an update to their phones. Instead updates are pushed to the devices wirelessly. Why? Because it's a wireless device. Take advantage of the capabilities of the device. It would be bad for an iPhone user on the go, who is only charging their iPhone from a wall socket and not their home computer, to go without a needed security update because the only way to receive the update is to synchronize with your computer.

Wow, cut John some slack. Many people will set up their recharging stand connected to their computer, and some will set it up with their wallwart. While it certainly is convenient to get updates wirelessly, it is of some concern when getting a firmware update, that your cellphone battery may die in the middle of a download. If your iPhone is connected to your charging stand getting its update, there is no risk of battery failure, right? I would never want an update, security or firmware, without my phone being connected to a charging stand, whether it be a computer or wallwart.

Guest wrote:
Ah, a fraction, a meaningless word. What is that fraction John? 3/4? 7/8? 99/100? I'm obviously quoting the wrong numbers, just to show that the statement you've made is meaningless, but well worded to push your agenda. Especially since the Fortune 100 companies represent a fraction of the companies that use Exchange (and by fraction I mean less than 5%, is it really less than 1%? I didn't look it up.) You are right on the point that Apple should not try to shoehorn the iPhone into business. They need to have much better infrastructure in terms of a solid data network, reliable integration with Exchange (instead of an IMAP hack), and greater productivity tools in order to make any significant sales in that area.

Well, if you can't define "many" why should John have to define "fraction"?!? And, most people take "fraction" in John's context to certainly mean a minority, not a majority, contrary to your examples. Fraction has some meaning, but clearly, not your meaning. The sad thing, is your nitpicking some minor details has no impact on John's larger point.

Guest wrote:
Ah, okay, so that's the fraction you were talking about. The iPhone is for the 6% of the population that is &quot;the rest of us.

So, you deliberately twist John's words even though you know exactly what he's talking about. His context is the non-business users market. This is far larger than the business users market that wants Exchange server compatibility.

Guest wrote:
I don't know that anyone is overlooking that, they are just running smart businesses. There will come a time when most PDA phones look somewhat similar to the iPhone, with even better designed touchscreen interfaces than the iPhone has now. There will come a time when that is an economically viable option for the majority of people. When that time comes, Apple will not be the only manufacturer with devices that have been on the market at this time. It is easy to take a new device and put it on top of the infrastructure that you already have (new mobile phones are released and transitioned to end of life faster than it takes A-Rod to create controversy). It's a lot harder to get out of an exclusive deal with AT&amp;T's notoriously bad networks and implement a 5 9's email delivery system that integrates well with a third-parties server (integration with its own products is something Apple is good at, but has not had any great success at integrating with anything Microsoft, and failed to work with the bigger and better carriers).

And, you know these things because.... what? Just by stating that "most PDA phones [will] look somewhat similar to the iPhone" is telling. How do you know they'll have "even better designed ... interfaces?" How do you know it will be difficult for Apple to integrate with a 3rd-party server? It sounds like they are well on their way. Why do you say Apple will have difficulty "integrating with anything Microsoft?" Have you heard of MS Office on Mac? Did you know Excel was written first for the Mac? And, which is the "bigger ... carrier?" that you are referring to?

Keep drinking the MS koolaid.

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A guest said: (hide)

A guest wrote: A decision that has made Windows computers running on the hardware of IBM, Dell, HP, Toshiba, Sony and many other the dominant platform for well over a decade now.

I notice you only comment on length of time and not units sold. And yeah, I remember all those people on line to buy those MS phones.

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Bryan said:

member since 11 Jun 2001 with 7340 posts, TMO Staff, send him a message or view his profile

Anonymous wrote:
It's easier to say, "he doesn't get it," than it is to disprove any of those points. That is what you do when you cannot voice it in a cohesive and accurate argument, throw up your arms and claim victory because the facts in evidence are being "viewed" incorrectly.

I didn't care about refuting his points, because -- in my opinion -- his points are not particularly relevant to John's column. My point, which I made quite well, is that his perspective, right or wrong, is coming from a different place than John's did.

There's no insult, no flaming, and not even any real criticism in that. It's just an observation I thought pertinent.

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vanetten said:

member since 27 Apr 2007 with 3 posts, unranked, send him a message or view his profile

Hi John,

Some of your best and most heart-felt work here.

Thanks,

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Terrin said:

member since 29 Jan 2006 with 414 posts, unranked, send him a message or view his profile

I am not a Verizon fan, however, I do not believe for a second that Apple actually wanted to do a deal with Verizon. Verizon was the bait to get favorable terms from ATT. Apple knew it had to do a deal with one carrier to get total control over the hardware. ATT has the biggest network, and it uses the same standard that is used in Europe. Don't get me wrong, if Apple couldn't get ATT on board, it would have accepted a deal with Verizon if those terms were more favorable. I just don't see the point of making it out like Apple really wanted a deal with Verizon. It didn't. That means it really didn't have a chance to make a deal.

Also, what Apple in the late 80s mistake are you referring to? Surely, it is not the not licensing the OS decision. I do not find that to be a mistake. There wouldn't be any Macs today if Apple had done that. The Mac OS yes, but Macs no. Perhaps you were referring to Apple having the opportunity to buy the patents for Lithium batteries, but turning it down. That was a mistake.

Krioni wrote:
Verizon made a huge mistake in passing on an iPhone deal. About as big a mistake as some that Apple made in the late 80s

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Terrin said:

member since 29 Jan 2006 with 414 posts, unranked, send him a message or view his profile

Good points. However, AT&T is an "it" not a "they." It exists independent of any of its workers. So, if you care about proper English (which admittedly you may not) you should say, "Apple has provided it with a weapon for trumping it's competitors . . . "

Guest wrote:
All those people criticizing AT&amp;T's lousy network: I would not doubt for one minute that AT&amp;T's primary corporate objective right now is &quot;Upgrade the Network&quot;. Apple has provided them with a weapon for trumping their competitors and they know that network quality is holding them back from maximizing the benefits of the Apple partnership. It's not as if they don't hear it from every direction.

As an aside, can you imagine what it's like being on the other end of the phone line when Steve Jobs called AT&amp;T to 'urge' them to fix the activation problems that cropped up on week one?

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A guest said: (hide)

After further review of all your posts, I have come to realize that most of your arguments are off-kilter if not downright illogical. You seem to be incapable of distinguishing between critical and trivial factors. It's pointless and futile to continue any discussion with you.

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A guest said: (hide)

Responding to the alpha-Guest post ...

While the writer of the post was obviously trapped in MS-land, it was overall a pretty good post, in the sense it forces you to think. Most of the arguments are reasonable, even if *I* think they're wrong. Nothing was 'dumb', though the "Windows" joke was pretty bad.

I am too old to write tit for tat responses, just as I long ago gave up arguing with street missionaries. So an alternative set of points, some of which may coincide directly, other's less directly.

1) Marketing never makes a product go long term. Microsoft did not achieve their position by marketing alone. It was the support of IT managers who always prefer a minimum solution rather than a maximum solution both cheaper to procure and offer personnel in the IT department more scope in being useful and interesting, and more numerous. Apple has always represented a medium to hi-end solution only, with more hardware and software than was necessary to do accounts or billing. It is only when the minimum requirements exceeded the MS-platform of the day that Apple has been successful, such as print and design and the living of a full life.

2) Its not features that sell an X (computer, phone, PDA etc.) - its the right features. I too was surprised when the original iPod became successful because it had so few features that other players had. The successof the Shuffle really blew me away. They apparently had the right features, which was to play music and most important, the ability for 'real people' to import cds. manage and install music on the player. I didn't buy one (I still prefer iRiver), but I bought one for my wife and my father. It wasn't airplanes that killed the Rio, it was iTunes that killed the beast. (BTW on a mac at least you can use iTunes to manage any player that can mount ... just create an account for your player, mount it, login to its account and make it the 'Music' folder for the new account)

3) You don't need 80 or 90 per cent of a large market to be successful. Apple has been successful for the most part with 3-15% of market share since its inception. It has never been the dominant player except for a few months in 1976-7. It has always been influential, and easy to influence with the right technology. Apple will probably achieve at least 10% of market share over the next two years (it already has over 10% of installed systems). Even if we substitute "Skoda" for "BMW" here to relieve ulcer aggravation, that's more than enough to make money and be successful. What's changed is the theory that there can be only one, something that MS-landers seem to have believed as they soared to the highlands.

4) Business systems are not the 'best' systems. Business folk sometimes seem to think they are the apex of technology. While true that initially only business can afford many new technologies, these are not deployed throughout the enterprise, but a few units in specialised places in specialised divisions. Most business technology is cheap, uniform, and just covers the purposes for which it is used. Innovation in finding purposes is not a mainstream activity. It is also not selected because it is easy to use - training substitutes for ease of use. Cracks, such as insecure email servers, can be papered over by IT departments. Obviously, technology will not be too diverse either - leads to too much training. Real people often appreciate better technology for use at home unless they just do work at home. Hence the development of non-enterprise games for Windows, and the existence of non-business oriented systems such as the Macintosh (which can be used in business, particularly specialised needs, but are not oriented to the minimal goals of the enterprise). However, signs are that Apple may have a plan for how to succeed in business without really trying.

5) The iPhone is creating excitement because people hope it will change the system, not because it suits the system. We shouldn’t be surprised that iPhone will not satisfy people already satisfied with the status quo. Most of the arguments against the iPhone have predicted doom because the iPhone in some ways is a square peg. I think from Apple’s point of view that is why it will succeed. Few real people seem to like the round holes. It is no accident that they chose AT&T, a weak carrier they could bully into changing the infrastructure to support square holes. European carriers were hemming and hawing before the launch, also not liking the restrictions Apple posed on their management of infrastructure. Now that the launch in the US was successful, they are lining up to change. This is being repeated in Asia. Maybe even the enterprise will eventually find square holes a bit more appealing so that people in the highlands on a clear day can see forever.

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A guest said: (hide)

What Apple can accomplish with the iPhone is a less annoying device. And set a standard that competitors must at least approach, or become irrelevant. MSDOS was once dominant, now a small niche. Doesn't mean that Blackberrys are doomed, but they will evolve rapidly or become more of a niche product than they already are. the big change I expect from the iPhone?, fewer Sam Kinison impressions. BTW, WIN NT does have a few vaguely UNIXy characteristics, but it's like comparing Chevrolets and BMWs, the Chevy is perfectly adequate, but there are more wonderful things.

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metavurt said:

member since 16 Jun 2003 with 163 posts, unranked, send him a message or view his profile

YAYYYY!!! We've got another Windows troll denser than the bricks that have come before him!

(and yes, "him" is the correct gender. women are smarter... ;P )

Don't Feed the Troll. He's got enough schlock from M$ to feed on fer years... .

How 'bout dem [insert baseball team name here]?

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A guest said: (hide)

Terrin,

it's = contraction of "it is" or "it has"

its = possessive form of pronoun it

Syntactically yours,

A fellow nit-picker

Terrin wrote:
Good points. However, AT&amp;T is an &quot;it&quot; not a &quot;they.&quot; It exists independent of any of its workers. So, if you care about proper English (which admittedly you may not) you should say, &quot;Apple has provided it with a weapon for trumping it's competitors . . . &quot;

Guest wrote:
All those people criticizing AT&amp;amp;T's lousy network: I would not doubt for one minute that AT&amp;amp;T's primary corporate objective right now is &amp;quot;Upgrade the Network&amp;quot;. Apple has provided them with a weapon for trumping their competitors and they know that network quality is holding them back from maximizing the benefits of the Apple partnership. It's not as if they don't hear it from every direction.

As an aside, can you imagine what it's like being on the other end of the phone line when Steve Jobs called AT&amp;amp;T to 'urge' them to fix the activation problems that cropped up on week one?

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Neil Anderson said:

member since 24 Jun 2007 with 16 posts, unranked, send him a message or view his profile

Guest wrote:

"Maczealots would buy even a turd with the Apple logo."

It'd probably have WiFi. And tell you the locations of the three nearest public washrooms.

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A guest said: (hide)

metavurt wrote:
YAYYYY!!! We've got another Windows troll denser than the bricks that have come before him!

(and yes, &quot;him&quot; is the correct gender. women are smarter... ;P )

Don't Feed the Troll. He's got enough schlock from M$ to feed on fer years... .

How 'bout dem [insert baseball team name here]?

The irony of your post is overwhelming.

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