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On Mobile World Congress and the iPhone

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By Jeremy Horwitz

Editor-in-Chief, iLounge
Published: Monday, February 16, 2009
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A reader comment on today’s news from the 2009 Mobile World Congress in Barcelona summed up our thoughts succinctly:

“I hope the pressure Apple has put on its competitors to improve their devices and application development will also occur in the opposite direction and push Apple to also add some much needed features to the next iPhone.” - TosaDeac

The key word above is “hope,” as distinguished from “think.” It would be great if Apple viewed its competitors as important enough to continue leapfrogging, in much the same way as it did when it declared the iPhone to be five years ahead of other smartphones. But does it? Is there any sign that Apple even cares about all these other smartphones and app stores, except for any threats they may pose to its patent portfolio?

Thus far, the answer is “no.” The first iPhone came out, people had their complaints, and Apple addressed a grand total of three of them: speed, pricing, and audio output. In so doing, it ignored—and compounded—concerns about battery life, made no improvements to its camera or screen, and diminished both its body quality and accessory compatibility. These sorts of changes were signs of a certain Apple confidence: namely, that the company believed it knew what it had to do, didn’t have to do, and could get away with in making a sequel to its original device. If sales were the only measure of whether the company was correct, the iPhone 3G would suggest that it was.

So what about the next-generation iPhone? By this point, the specs have been locked down, so it’s unlikely that any of the new hardware announced today will have directly influenced whatever Apple unveils later this year. Consequently, you can pretty much rule out an 8- or 12-Megapixel camera, HD video recording, and the like; at best, the next iPhone will bump the still camera up a bit and enable low-res video functionality. If a screen resolution bump is in the cards, which seems less likely than a screen technology/brightness change, it was planned well before today’s announcements; similarly, whatever processor and audio chip changes are coming have been underway for many months, and Apple’s main objective will be to improve things the iPhone is already doing pretty well.

On the software side, Apple has comparatively little reason to “compete” with other companies. Everyone’s still struggling to catch up with iPhone OS 1.0 and 2.0, and Apple’s probably putting the finishing touches right now on 3.0. Unless it has been finished already, whatever software will ship on the new device is surely still at least a little open to change, but we’d expect that Apple will be marching to its own drummer on what does and doesn’t make it into 3.0—not following whatever Microsoft has planned for Windows Mobile 6.5 or Google is planning for Android. That’s just not Apple’s style.

What do you think is going to happen with the next iPhone? Will this be the year when Apple finally splits the line into high-end and midrange phones a la iPod and iPod mini? What are you expecting from the hardware? iPhone OS 3.0? We’re curious to hear your thoughts.

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Comments

1

The iPhone 3G did not knock my socks off.  Let’s hope the 3G iPhone does.  At the very least I need 32GB of storage, and a slightly better camera.  A 720x480 widescreen display that can handle playback (and output) of 720p files would be great.  I’ll be ready to upgrade by this summer.

Posted by Galley in Greenville, SC on February 16, 2009 at 3:33 PM (PDT)

2

The real battle this year is between iPhone OS 3.0 and the Palm Pre OS 1.0.  There was never any real competition before - Microsoft, Nokia, RIM - even Google’s Android show no real ability to compete with the iPhone.  But the Pre’s OS is the first one I’ve seen that looks like it will dethrone the iPhone as the new “IT” thing.  Palm seems (and I say seems cause the proof will be in the pudding when it ships) to have addressed every major concern of the iPhone’s detractors and the fanboys who were drooling for the next white device from Cupertino seem to be drooling just as much (if not more) for this new shiny toy.  If the OS is as good as it looks and if Palm can build a credible app developers pool, then Apple is going to have to think long and hard about an iPhone 3.5 that addresses all those concerns and puts them ahead of Palm.

Posted by Jay on February 16, 2009 at 3:42 PM (PDT)

3

@ Jay:

Hate to break it to you, but Apple is certainly already hard at work at “iPhone 3.5” (if that’s what you want to call it).  You’re comparing a yet-to-be-completed Palm to an iPhone that’s been mostly unchanged for a year and a half.  If I were a betting man, I’d expect to see a balloon-deflating iPhone announcement from Apple around the time Palm’s Pre is finally ready to hit the street.  Watch and see.

Remember the day when Microsoft proudly announced their new Zunes, just in time for Apple to announce the iPod Touch and blow Microsoft out of the room (again)?  Yeah, it will probably be like that.

The Palm looks like a great device, and I’ve always been a Palm fan, but it would be foolish to think Apple is just sitting around waiting for Palm to crash the party.  Palm stayed stagnant far too long - I don’t know if the Pre will really be enough to save them.

And I don’t think the Pre will get as much drooling as you think (when it actually launches) without a native SDK.  Too little, too late.

Posted by Quix on February 16, 2009 at 5:04 PM (PDT)

4

If you work in the industry, you’d know that from a hardware point of view, the hardware components for the iPhone 3G were pretty much locked in by Sep 07.  (Remember that it took 2.5 years to develop the original iPhone.)  And given that 3G was pretty much locked in, I don’t see how Apple could do anything about additional battery life; they’d had to have dropped 3G or doubled its size in order to do that.

So the next iPhone’s specs were likely locked in by Sep 08. Possibly they addressed the camera, tying it in with adding a GPU and a bunch of other video-oriented features.

Posted by watchdog on February 16, 2009 at 5:07 PM (PDT)

5

Are you serious?  You completely ignore the App Store and the SDK which was the BIGGEST complaint by people.  How is that not a huge change?

They have also added all sorts of enterprise features, by licencing ActiveSync.  Maybe you are not the kind of customer who was interested in that, but that was a HUGE change that they made.

About the batter life, all these phones are expected to have worse battery life than the iphone.  Its a technology issue, not one Apple can wave their magic wand and solve.

Talking about accessory compatibility, they addressed a huge complaint regarding the depressed headphone jack of the iphone.


Also, please write this after even 1 of these phones can actually be bought.  You are comparing unreleased phones, with one which is over 8 months old.  Thats just ridiculous.

You complain about battery life/price and then want a much higher resolution camera?  Shockingly, the poorer MP camera has not stopped the iphone from being one of the most popular devices on Flickr. Most people don’t seem to consider it that huge an issue.

There are a few things that Apple should be working on, that they haven’t been (the obvious Copy Paste, Video recording, etc…) but don’t make it seem that Apple has done nothing, and is not reacting to competition, just because its 8 month old phone doesn’t match up to their demos.

Posted by addicted on February 16, 2009 at 5:16 PM (PDT)

6

#4/#5: Apple thinned the iPhone 3G and reduced the size of its battery from the first model. It isn’t exactly magic to let the device stay a little thicker for the sake of additional power, or to give people the replaceable battery option they wanted.

#5: Chill out.

The lack of apps wasn’t the biggest complaint from users, and certainly not at first. It picked up steam over time, and even so, no one—not even Apple—expected apps to be as big a deal for the iPhone as they have proved to be. Additionally, this article is about changes to the iPhone 3G from the iPhone, and similar changes to the third-generation iPhone from the iPhone 3G. The SDK wasn’t a change to the iPhone 3G; it was an across-the-board update to the original iPhone and iPod touch as well.

Regarding the camera and Flickr, please don’t confuse popularity with performance, or past feature requests with current ones. We praised the iPhone’s camera when it came out, and were fine with it in the iPhone 3G. It’s time now, two years after the iPhone was first announced, for an improved version. You act as if no one has a right or reason to expect more from the next-generation iPhone, even where it’s deficient.

Posted by Jeremy Horwitz in East Amherst, NY, USA on February 16, 2009 at 6:53 PM (PDT)

7

At this point, the only way I can see Apple increasing its market share is to drop the price (a la iPod mini), or make the iPhone available to other carriers (which, if I’m not mistaken, cannot be done until the agreement with AT&T;expires).

Just because we can see the iPhone’s flaws doesn’t mean that Cupertino can. It’s like the line from Kill Bill, vol 2:
“If you’re gonna compare a Hanzo sword, you compare it to every sword that wasn’t made by Hattori Hanzo”.
Think about it, how long did it take the iPod to get gapless playback? And who’da thought we would still be waiting for graphic EQ in 2009?

Posted by Paul on February 16, 2009 at 7:05 PM (PDT)

8

I love my 3G iPhone. I really do. But let’s be real here. There are major areas where Apple has fallen short with both the original and the 3G. My wife’s 2 year old Nextel flip phone speakerphone output is WAY LOUDER than either iPhone. And due to California’s hands free law, a louder speakerphone is a must! My old $20 Virgin pay as you go phone had voice dialing, and you mean to tell me that not even Apple’s second generation phone offers this? And please don’t mention the outboard apps you can get that somewhat perform this function. And then there is true GPS Navigation. Maybe Apple will throw us that bone with the next release. And also a better camera with a FLASH and perhaps a movie mode.

I love my iPhone(s). I really do. But it would be nice to have some major improvements to some basic features that in my opinion should’ve been addressed by now.

Posted by Michael on February 17, 2009 at 3:34 AM (PDT)

9

.....everybody wants this, wants that; people lets recognize this device has changed not only the ball…but, the whole ball game.
NOTHING existed like this two yrs ago, i have owned my 1g since the beginning, and watched it grow into something really great.

Posted by rdr on February 17, 2009 at 6:08 AM (PDT)

10

Yes, rdr, the iPhone is truly a game changer. But remember, it is a phone FIRST! If you want to go about creating a revolutionary device like the iPhone, Apple needs to make sure they get the PHONE part of it right first! This is not the iPod Touch we are talking about.

Posted by Michael on February 17, 2009 at 10:12 AM (PDT)

11

Amen, Michael. AMEN!

Posted by Cristina on February 17, 2009 at 10:44 PM (PDT)

12

I don’t see the next iPhone’s form factor really changing that much. It could be thinner or it might be a tad wider or taller. I know there’s been the often rumored iPhone nano, but it’s difficult for me to imagine such a device that doesn’t compromise a user’s ability to dial, listen to music, watch videos, or use existing applications.

Internally, I could certainly see a bump in memory, the addition of GPS, and an upgraded camera in the next iPhone, if Apple chose to add them. None of these would really affect the phone’s overall form factor.

I’m most interested in seeing if Apple significantly upgrades the iPhone software with version 3.0. Perhaps they will come up with a way to better organize apps on the device, add cut and paste, get a version of Flash that works well with the OS, or whatever else.

I’d be curious to see if Apple decides to diversify its iPhone lineup this time around as they did with their iPod lineup. It makes sense from a business standpoint as Apple sees its revenues coming from three main income streams: iPod, iPhone, and Macs. The question then becomes, how do you diversify the iPhone? I don’t think the mini or nano are good indicators, as a phone can become only so small before usability really takes a hit. And I think Apple would be loathe to offer a cheaper but crippled version that dispenses with the camera or some other function. The iPod and the nano can essentially do the same things and the only differentiators are size and storage. Photos, videos, and games appeared later, but the core mission of the iPod, mini, and nano were always music. The extras were added to take advantage of the iPod’s storage and screen. The shuffle is the lone exception to the rule.

Not that my guesses have anything behind them, but I’d say Apple’s next phone comes with a very spiffy 3.0 software upgrade, along with a better camera with video capability, GPS, and a 32GB option. There will be some subtle changes to the body, maybe thinner and lighter, perhaps with a different backing. The 32GB will retail for $399 (while a 64GB version of the touch will retail for the same).

The Apple earphones with mic and remote will also become standard equipment across the entire line, as well as iPod.

But beyond the hardware and software changes, I think Apple might keep the 8GB version around and drop the price to something like $149 (with the 16GB version remaining at $299). I think it will become their new “entry” model—inexpensive enough that it might get more folks to buy. AT&T;might also offer a less expensive voice and data plan. Since Apple makes its money from carrier subsidies and iTunes/App Store revenues, a cheaper data plan has no impact on Apple’s bottom line. I suspect if Apple kept an 8GB model around and dropped the price, they’d recoup any lost revenue with the boost in sales volume, not to mention the fact that 8GB of memory is less expensive today than when the phone was first introduced.

Posted by cxc273 on February 18, 2009 at 9:05 AM (PDT)

13

The biggest reason for the success of the iPhone 3G were its price and the App Store. Those are the two factors competitors could not match last year.

Apple should do its best to make an even more affordable iPhone and widen the APIs developers can access, so that even more amazing apps come to life.

One thing the new iPhone will have I think is compass sensor like the G1. This sensor will be able to provide the kind of data the accelerometers cannot do now.

Contrary to many peoples expectations, I think that Apple should reintroduce a 4GB iPhone again rather than a 32GB one. The one reason. App Store. With so many apps providing streaming music and video services (iTunes to join soon) lack of space for media on the iPhone is no longer such an issue. Given the current average size of apps of 10MB, even if you have 148 apps on your iPhone, you would not need more than 1.5GB of free storage.

Despite much wider availability of the iPhone 3G, in some places the original iPhone is still a better deal. Many countries do not have 3G Networks or iTunes Store. A completely unlocked 4GB iPhone without the 3G antenna could sell for as low as $400 in many smaller countries where people buy the unlocked iPhones 3Gs for $800. I have a friend still in high school who bought one for $980, with the average monthly salary in my country being less than $500.

Apple benefits from larger iPhone Market share across the Board. Last quarter, Apple’s performance results were largely saved by international sales. That will be even more the case from for on until the US economy recovers. The iPod Touch 2G is an excellent international product, selling much better than the iPhone 3G, I think.

The App store currently works in less countries than the iPhone sales, forcing people to rely on jail-broken iPhones with free Cracked apps. In my country its damm difficult to create a iTunes Account and one has to buy vouchers by ebay to shop Apps.

Apple need to recognize the potential to subsidize iPhone trough iTunes and make up with App Store sales. Instead of trying to forge deals with carriers trying to rob people on the long run, Apple should introduce iTunes, the App Store and a 4GB unlocked iPhone to as many countries as possible.

Posted by Nikolay Andreev on February 21, 2009 at 2:11 AM (PDT)

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