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Apple's iPhone 5 key, but iCloud more strategic

By | October 3, 2011, 3:38am PDT

Summary: Don’t get confused by the shiny new iPhone; the iOS and iCloud launches and your data are far more important to Apple.

Apple’s plans to launch its latest iPhone will be closely watched for its specs, new features and ability to get consumers to line up for the device, but iCloud’s rollout will be far more strategic.

If you were to rank Apple’s launches in order they’d be iCloud, iOS 5 and then the iPhone 5.

In other words, don’t get confused by the shiny objects. Apple’s iCloud, which seems like old news since it had a coming out party at WWDC over the summer, is also likely to kick off. As iCloud’s launch goes so does Apple’s transition from a PC-centric vendor to one more equipped for the decades to come. If iCloud has iOutages and other issues it will be a black mark on Apple.

Wells Fargo analyst Jason Maynard said in a research note:

The most profound takeaway from the June WWDC event was Steve Jobs’ statement that the PC/Mac has been demoted to a spoke in the iCloud hub. We believe there is a major battle going on among Apple, Google, Facebook, Amazon, and Microsoft for consumer Internet dominance. At the core, we think the battle is about the control of data. The convergence of software, hardware and Internet services is leading to an asymmetric fight among the gorillas. Our thesis is that the platform that creates the most value will store the most data. The platform that stores the most data will ultimately, in our view, be the winner(s).

On the iOS 5 front, the biggest questions will revolve around whether native Twitter integration and potentially closer Facebook ties can make Apple more social. It’s worth noting that Twitter integration is key for Apple—a company that doesn’t bother with the social broadcasting service.

In fact, Twitter may be a strategic play against Facebook, which may launch an app for the iPad, but is more likely to go HTML 5 and appeal to developers directly. Frankly, Facebook doesn’t really need Apple to be a gatekeeper to its audience.

Bring up the rear to Apple’s shindig on Tuesday may be the next iPhone. It’s only natural to be wowed by better cameras and new features, but keep your eye on the ball. Apple’s immediate future will be dictated by its cloud launch, software and aggregating your data in the land of tech giants.

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Topics

Apple iCloud, Apple iPhone, Apple Inc., Apple iPhone 5, Apple iOS, Social Media, Internet, Larry Dignan

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic.

Disclosure

Larry Dignan

Larry Dignan has nothing to disclose. He doesn’t hold investments in the technology companies he covers.

Biography

Larry Dignan

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CNET News.com. Larry has covered the technology and financial services industry since 1995, publishing articles in WallStreetWeek.com, Inter@ctive Week, The New York Times, and Financial Planning magazine. He's a graduate of the Columbia School of Journalism and the University of Delaware.

For daily updates, follow Larry on Twitter.

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0 Votes
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RE: Apple's iPhone 5 key, but iCloud more strategic
Rick_Kl 3rd Oct
iCloud is just a service to sell more hardware. Remember Apple is a hardware company, not a software company. The ones to worry about are software companies that want to control your hardware.
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RE: Apple's iPhone 5 key, but iCloud more strategic
MG537 3rd Oct
@Rick_Kl
Agreed. Of the companies that were mentioned (Apple, Google, Facebook, Amazon and MS) only one is a hardware company and while iTunes on its own would be big, it is but a small part of Apple's overall profits.
So Larry, are you (or Jason Maynard whom you've quoted) saying that all these companies want to morph into something else than what they are?
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Apple is a Systems company
Bruizer 3rd Oct
@Rick_Kl

People get confused thinking Apple is a hardware company when, in fact, it is a systems company.

When you buy an Apple product, you are buying into a system of integrated components that are designed to work well together. Take away either the hardware or the software and the system falls apart.
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RE: Apple's iPhone 5 key, but iCloud more strategic
Rick_Kl 3rd Oct
@Bruizer I think you are missing the point. When you walk into an Apple store, what do you see everywhere? Hardware, not just isles of software boxes, but actual hardware (iProducts, MacBooks, Mac Pros, iMacs, Mac minis, Airports, Apple TVs etc.) When you walk into a Microsoft partners retail store (Walmart, Best Buy, Kmart, etc.) you see a section for hardware and a larger section for software.
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RE: Apple's iPhone 5 key, but iCloud more strategic
BillDem 3rd Oct
@Bruizer I would say they are an industrial design and marketing firm which focuses on complete solutions. They don't manufacture anything, so calling them a hardware company is definitely not accurate. They design integrated solutions and contract others to build them.

(IMHO, they are one of the best industrial design firms in the world, and I'm not a fanboy, because I actually prefer using Windows.)
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RE: Apple's iPhone 5 key, but iCloud more strategic
glopez123 3rd Oct
@Bruizer You hit the nail on the head... Apple is about systems, eco-systems; around people, devices and content.
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RE: Apple's iPhone 5 key, but iCloud more strategic
tkejlboom 3rd Oct
@Rick_Kl

When you walk into an Apple store you see boxes with Samsung screens and DIMMs, Maxtor, Samsung, or, if you're lucky, WD hard drives, oh and Intel CPUs. Intel doesn't need to invent an ultrabook space to compete with the Macbook Air! They're already the exclusive vendor for the chips in the Macbook Air. These are exactly the same components as in every other PC. Apple differentiates purely upon OS X and pretty designs. They are either a software company or an industrial design company. They are NOT a "hardware" company.
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@Rick_kl
Bruizer 3rd Oct
It is simplistic to think that just because all you see is hardware, Apple is nothing but a hardware company. Apple exists as a company that spend enormous resources on software, network and systems infrastructure. If you buy an iPod but don't install iTunes, it functions are seriously limited. Why? Because you removed a key part of the system.

It is this naive view of Apple being a "hardware" company that has made competing against them so amazingly difficult. HTC offers hardware. Samsung offers hardware. MS offers software (yes the Xbox is a system). Apple offers the entire system. It tightly integrated fusion of hardware and software with custom protocols if needed.

If you really think Apple is another Dell and is little more than a hardware company, you can't begin to understand why Apple has seen the success they have had.
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@BillDem: you just defined a systems company.
Bruizer 3rd Oct
@Bruizer

In engineering, what you defined is a systems company.

Also remember, most large companies subcontract out the vast majority of manufacturing and Apple is not unique in that.
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RE: Apple's iPhone 5 key, but iCloud more strategic
geolemon 3rd Oct
@Bruizer If that's true, it follows my assertion that what Apple really is is a marketing company, who uses the perception of it's systems as a "higher end" prospect to charge higher prices.

Otherwise, if Apple were the company you state, it wouldn't charge premiums for it's hardware, it would behave more like other systems and service providers - such as cell phone carriers.

Those businesses don't charge premiums for their devices [meaning: additional profit just for the name], instead they subsidize them so the consumer pays less - a gateway so that they can start using the proprietary ecosystem.

Apple doesn't work that way...
They gouge you coming AND going.
And, in the end, their solutions aren't superior - in fact, have many more obstacles and limitations if you aren't inclined (or able) to let Apple dicatate [what is often 'the one way'] how your (ponder) environment can be configured.

That 'one way only' approach may simplify things for home and casual users, but isn't superior, and isn't something to pay more for. But Apple has found themselves a niche market in non-technical folk who don't want to screw around with settings and just want things to work - they don't care if it's Apple's-way-or-the-highway. They'll pay more for the "thank god I didn't have to configure" factor, and in a true ignorance-is-bliss sentiment, Apple has leveraged their marketing to work in conjunction with those people's ease-of-use satisfaction to turn into word-of-mouth advertising and the perception that "Apple is superior"...
...and therefore worth paying more for.

It's truly propaganda. No other industry follows this model.
It's also truly brilliant - and the truth in the above materializes when Apple is one of the most profitable (read: more of YOUR money) company in the US.
Something to think deeply about before feeling aligned "with" them...
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RE: Apple's iPhone 5 key, but iCloud more strategic
lostark98 3rd Oct
@geolemon "It's truly propaganda. No other industry follows this model."

Oh really? Have you bought an automobile in the last few decades?
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@geolemon
Bruizer 3rd Oct
Your post shows a remarkable lack of understanding what systems design and engineering is.

Those businesses don't charge premiums for their devices [meaning: additional profit just for the name], instead they subsidize them so the consumer pays less - a gateway so that they can start using the proprietary ecosystem.

That only works for systems that have a reoccurring cost associated with their use. To think there is a single revenu model for all systems houses is simple minded. This naive view and shallow thinking is repeated throughout your post.
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RE: Apple's iPhone 5 key, but iCloud more strategic
spdragoo@... 4th Oct
@geolemon


"Those businesses don't charge premiums for their devices [meaning: additional profit just for the name], instead they subsidize them so the consumer pays less - a gateway so that they can start using the proprietary ecosystem.
"

Apparently you've never heard of Cadillac, Mercedez-Benz, Audi, BMW, Jaguar, etc.

But if you want something more on-topic, remember when the cheaper PCs were called "IBM clones"? IBM was viewed as a "premier" brand. Or, for something more current, when HP bought Compaq they kept the brand name as the "cheaper" product, with their HP-branded items as the "top-line" product (i.e. customers wanting "higher" quality would pay more for the HP name).
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RE: Apple's iPhone 5 key, but iCloud more strategic
michaelwesolowski 3rd Oct
My contract is up and I am deciding between drinking Apple koolaid or Motorola Atrix. All the Apple stuff sound great until I start thinking about how restrictive iTunes is to use. Ug.
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RE: Apple's iPhone 5 key, but iCloud more strategic
Rick_Kl 3rd Oct
@michaelwesolowski You should look at the Windows phones, oh wait they are just as restrictive. Nevermind, you might be better off just buying a Droid Bionic. wink
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RE: Apple's iPhone 5 key, but iCloud more strategic
BillDem 3rd Oct
@michaelwesolowski You can own an iPhone without drinking the RDF KoolAid. I own an iPhone, iPad, and even a Mac, but I seem to be immune to the fanaticism. I still prefer all of my Windows PCs and I cringe every time I hear the RDF faithful spouting that Apple is superior to everything. I have more problems with my Apple products than any of my Windows PCs, so I know the truth. The apps sometimes crash. There are kernel panics. The iOS devices require a hardware reset every so often. None of the problems make them unusable, but they do show that they are far from perfect.

On the other hand, the iOS devices are far more intuitive to start using than any of the Android devices that I've tried. There is no unintuitive "swipe in from one of the frame edges" to make something happen. You see everything and just touch what you want. It's zero learning curve versus small learning curve.

Also, the application and accessory selection is far beyond anything else out there. Go to Brookstone (or any retailer) and look at how many accessories they sell for Android devices versus Apple devices. That's the real appeal of iOS devices. The ecosystem blows everything else away. They're not perfect, but you can do an awful lot with them.
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RE: Apple's iPhone 5 key, but iCloud more strategic
Rick_Kl 3rd Oct
@BillDem [I have more problems with my Apple products than any of my Windows PCs, so I know the truth. The apps sometimes crash. There are kernel panics. The iOS devices require a hardware reset every so often. None of the problems make them unusable, but they do show that they are far from perfect.]

I have the same issues with Windows more often than OS X. So your circumstances are different than mine. Yes, Windows 7 is an improvement over Vista, but it is not perfect. Through my limited exposure to the Windows mobile OS, I think i???ll pass on it. I do not like the metro interface, as it is not any easier to use than the competition, and these phones require a hardware restart every so often. Different people have different experiences. While I do use OS X at home, I use various versions of Windows at work. What bothers me are the endless people that feel it is okay to bash Apple, while giving Microsoft a pass for their transgressions.
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BillDem: Excellent post
toddybottom 3rd Oct
@BillDem
" I cringe every time I hear the RDF faithful spouting that Apple is superior to everything"

+1. Rick_Kl is a case in point.
  • Flagged
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RE: Apple's iPhone 5 key, but iCloud more strategic
cernajose@... 3rd Oct
@BillDem I agree a manage a school that bought 1000+ apple computers 3 years ago and they are a pain. Not to mention apple stops updating software to make you buy newer version of OS X. Since then we are slowly replacing with managed windows 7 machines. Life has been easier for our users and me.
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RE: Apple's iPhone 5 key, but iCloud more strategic
non-biased 5th Oct
@BillDem I have more problems with my Apple products than any of my Windows PCs, so I know the truth.
I agree with most of your post but the above line doesn't fly. If you had said you know the truth about your experience great but claiming you know the truth simply based on your experience is far from accurate. I am not disputing your claim about your experience but my experience is that I have more issues with each of numerous Windows machines I own than all the Apple products I own combined. Does that make your experience wrong, of course not but just shows that your truth is just that, yours and not everyone else's.
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RE: Apple's iPhone 5 key, but iCloud more strategic
lsiehi 3rd Oct
http://url7.me/Xlk4
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Apple will blow the cloud
Monkeypox 3rd Oct
just like they blow everything else. Seriously, the should leave the big stuff to Microsoft.
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RE: Apple's iPhone 5 key, but iCloud more strategic
Synthmeister 3rd Oct
@Monkeypox
And MS should leave the little stuff like mp3 players, tablets, phones and online media/app stores to Apple.
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RE: Apple's iPhone 5 key, but iCloud more strategic
FuzzyBunnySlippers 4th Oct
@Synthmeister

Tablets are no longer little.. well, except for iDevices. You see, you admitted they are little, yourself. Don't blame me. They will soon be big, thanks to Microsoft and Windows 8 making them useful for everyday computing, including every use of what is now relegated to a desktop, not just 'little' things relegated to a media consumption device. You painted yourself in, you stay until it dries. I'm just a little messenger with a big message.
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RE: Apple's iPhone 5 key, but iCloud more strategic
non-biased 5th Oct
@FuzzyBunnySlippers Sorry to break it to you but you are not the messenger with a big message, you are the messenger of your fantasies. Windows 8 may or may not transform the tablet market but just because you base all your hopes and dreams in it happening doesn't mean it will.
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RE: Apple's iPhone 5 key, but iCloud more strategic
non-biased 5th Oct
@Monkeypox They blow everything else? Did you mean they blow everything else away? I will admit they had their issues with MobileMe but what have they blown in the past 15 years of so? Every company has their hiccups.
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RE: Apple's iPhone 5 key, but iCloud more strategic
Afewgoodmen 3rd Oct
I use to own an iPod touch 4th Generation. I now own an iPad. However I intend to buy this iPhone 5 immediately it launches. It's not just the Apple device that I own that matters. It's the Ecosystem. The forthcoming iCloud and iOS 5. The Apple system is by far much higher than that of the nearest competition. It's so difficult to resist and I find myself inexorably pulled towards them!

I'm going to buy a Macbook Air as soon as I can save enough money for it sometimes next year. Then I should say, my Apple experiences wouldmbe truly complete!
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RE: Apple's iPhone 5 key, but iCloud more strategic
MeerkatMac 3rd Oct
Consumers would have to be total idiots to give up autonomous computing platforms for "Cloud Computing". It would be like trading in your Porsche for a prepaid bus and subway pass. Slower processing, spotty availability, service outages, and enormous security issues.

How did this ridiculous concept ever get legs? Multi-billion dollar marketing, that's how.
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RE: Apple's iPhone 5 key, but iCloud more strategic
arminw 3rd Oct
@MeerkatMac
My impression of Apple's iCloud service is that it is designed to be a fancy backup and synchronizing system for your own data, the master copy of which is kept on your local Apple device. If you modify, for example, your address book on your iPhone, that modification is also transferred to your iPad and the Mac. If their service gets interrupted for a time, it simply means that your data is not transferred among devices, but it hasn't been lost from the device where the data originated.
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That souns like an unneeded and/or redundant service.
adornoe@... 3rd Oct
Look, if availability of data is what people should worry about, why not just get an external disk drive to store a copy of the data. Then, if your data, for some reason, becomes "unavailable" from the original device, it will still be available on the external drive.

Or, the data can reside on any other on-line service, and not necessarily the iCloud, which, as it turns out, will be a bit expensive if you need a large enough backup for a lot of data.
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RE: Apple's iPhone 5 key, but iCloud more strategic
bill@... 3rd Oct
How ironic is it that I come here with my iPad to read about the new iOS and iCloud...and the site tells me I can't view some of the content because I have an obsolete Adobe Flash version.
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RE: Apple's iPhone 5 key, but iCloud more strategic
mtully@... 3rd Oct
Windows Phone 7 with Mango has tight Twitter and Facebook integration and with live tiles make iOS5 look like a chump.. add a Zune subscription for 9.99 a month and it's checkmate.
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RE: Apple's iPhone 5 key, but iCloud more strategic
Synthmeister 3rd Oct
@mtully@...
Except MS is playing chess against itself in an empty playground and Mommy and Daddy don't even realize they never came home from mobile daycare.
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RE: Apple's iPhone 5 key, but iCloud more strategic
non-biased 5th Oct
@Synthmeister happy happy
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Not a hardware company, an integrated systems company
autocog 3rd Oct
If they were a hardware company you could put other software on that hardware. It is an integrated system. Proprietary throughout. Each hardware platform has specific software requirements from the same company. In very few cases do you have ANY options of loading something other than Apple on an Apple. And when you do there is usually some level of limitation that the non-Apple software cannot get to the same depth of functions that the Apple software can.
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RE: Apple's iPhone 5 key, but iCloud more strategic
Rick_Kl 3rd Oct
@autocog The very same thing could be said for Microsoft. Unless you discount Microsoft???s hidden (undocumented) APIs. The ones that are reserved for Microsoft???s internal use. Then there is the clause in the EULA, that grants Microsoft first right of access to the endusers hard drive. I do find it funny that I can install software from Microsoft, Adobe, Mozilla, etc on a Mac, yet There are software titles that are restricted (by the software vendor) which are limited to Windows only. As far as software being limited, that is usually by the software vendor, not Apple.
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All things Apple...
adornoe@... 3rd Oct
The Apple infrastructure:

iPad, iPhone, iMacs, iCloud, iTunes, iOS, iApps, iPods, iWhatever...

and, nobody else can play with their "footballs".

In other words, iAppleLockin.

But, there are iFools born every day.
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RE: Apple's iPhone 5 key, but iCloud more strategic
Hasam1991 3rd Oct
@adornoe@... I just don't see it, I have most of those products and I still use Windows 7 laptop and desktop... never felt 'locked' in to anything. I have 20,000 songs on iTunes and only a few came from Apple... the nice thing is everything is now on the cloud, no need to back up

Apple got it right....
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However, do you already know how the whole Apple infrastructure
adornoe@... 3rd Oct
will work together after iCloud and all the hardware and software are integrated into the walled-garden of Apple?

Once the integration is completed, will you really "own" your songs, or will you just have the right to listen to the songs as determined by the iCloud?

Only the data/music/software that is resident in your hardware, can be considered, "yours". If you have those 20,000 songs on your hard-drive, they are "yours", but if they come from the internet via iCloud, are they yours?
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RE: Apple's iPhone 5 key, but iCloud more strategic
Synthmeister 3rd Oct
@Hasam1991

The songs will remain on your hard-drive as well as the movies, apps and TV shows. iCloud will simply sync everything or allow you to stream stuff if you don't have enough space on your mobile device.

All of my content is cross platform anyways and Apple allows you to purchase an app and use it on multiple devices even if they are not synced to the same computer.
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RE: Apple's iPhone 5 key, but iCloud more strategic
jt59 3rd Oct
will you can have the cloud and you can have gmail and windows 8 what a lie it will not run on new notebook i have at all windows 8 and the cloud and gmail are a big flat lie
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RE: Apple's iPhone 5 key, but iCloud more strategic
non-biased 5th Oct
@jt59 What?
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RE: Apple's iPhone 5 key, but iCloud more strategic
nycrocks 3rd Oct
The status/materialism factor alone is worth considering when it comes to Apple consumers. The younger generation thinks Apple computers are cooler, probably because they are more expensive. If I were doing graphics or music, a Macbook at nearly twice the price might be better than a Windows computer with the same or better components. Somehow I still don't think I would be willing to spend double the money just to have an Apple computer and I just don't believe they are worth it. People under 35 probably want a Mac as a status symbol.

I love the iPhone for the convenience factor alone. I won't rush to buy the new iPhone because I'm stuck in a contract until next year. No way are any iPhones worth paying $500+ for!

I do think just for sound in mp3 players the iPod touch/iPhone beats all the competition. Of course all mp3 files sound like ****, but Apple processes them best. If they'd put an actual equalizer in the damn iPods/iPhones, that would be an improvement.
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RE: Apple's iPhone 5 key, but iCloud more strategic
sip01 3rd Oct
@nycrocks: Settings -> iPod -> EQ (iOS 4.3.3 on 3GS)
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RE: Apple's iPhone 5 key, but iCloud more strategic
Rick_Kl Updated - 3rd Oct
@nycrocks Which notebooks are half the price, with better components? I have seen several where one component is better, but the same notebook has three (or more) other components are not even close. Have you seen a new MacBook Pro? They make the bargain bin OEM notebooks look like trash, with those cheap, flexible plastic bodies. Or the low end processors. Just because they both have i7 processors, does not mean they use the same one. My favorite is when price is the first, and only, consideration. I have seen people compare an i3 to an i7, and say the i3 is better, just to suit their argument. And seriously how many people still use a VGA port? That is what, 80s technology? Many of the margin bin systems are made with outdated parts, and do not compare well with newer parts. Next this youll hear is how much Apple sucks, because they stopped using floppy drives (more 1980s tech).
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RE: Apple's iPhone 5 key, but iCloud more strategic
non-biased 5th Oct
@Rick_Kl I have never done a component to component comparison but have recently done moved from a year old HP laptop that was about $750 to a new MacBook Pro. Sure the MBP was twice as much but I have got to say in quality and experience it sure blows away the HP. This is just my experience and not trying to apply it to every system out there but at least I can speak from experience unlike the majority of haters out there that talk like they know.
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Why is iCloud so important?
grillomalta@... 3rd Oct
Amazon has its' own cloud, and Google has been offering use of the cloud for ages... what's new?

@Rick_kl - I have a veriety of iphones, nanos, ipods and an ipad. I DO NOT have iTunes installed. There are other free programs you can use to manage your device.

I repeat. I DO NOT use iTunes...
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RE: Apple's iPhone 5 key, but iCloud more strategic
non-biased 5th Oct
@grillomalta@... It's important due to it's simplicity and integration into the ecosystem. Nobody ever said Apple invented the cloud or was the only one with an offering.
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Re: discussion on apple superiority
Kbron826 4th Oct
Its totally an academic discussion about Apples technical superiority; They simply charge more for their hardware, and software, because they can.

As long as people are willing to pay a premium for the product, service, or software that Apple is selling, Apple or any other shrewd company will charge more and take profits.

Its called "perceived value." Its the same way GM gets away with selling Cadillacs for a huge premium over Chevrolets, even though a high percentage of the parts are the same or made of identical materials by a subcontractor.

Apple pays close attention to design more than other vendors, and when combined with smart marketing creates the tribe mentality among their users. You pay a premium to join the cool people club and use Apple products. Doesn't make Apple bad, just smart product designers and marketers.
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@geolemon
Jonathan K 4th Oct
I agree, Apple's flagship is commendable and it stands out. Less crashes compared to other software solutions, the durability is the trust apple fans have and will continue to follow.

osha 10 hour training | Hazwoper 40hr training
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mumuboa 66 dpd
cmakrekdw45-24379028810453867344191691556755 25th Nov
mxqhvb,qugnexzl74, grxyk.

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