Steve Jobs is no fool. He didn't lead Apple from the edge of bankruptcy a decade ago to where it is today by making rash moves. Betting against Jobs isn't a good bet. The chances are high that the iPhone will be a success initially, but what about long-term? This depends largely on what the early adopters have to say about it.
Heck, I've even thrown dough at things that have become over a period of weeks nothing more than expensive paperweights, but when there's a 2-year contract attached to the deal, that's when I become waryThe iPhone is a first generation device and as such is flawed. I make no apologies for saying that. Lack of 3G support is a flaw. Rolling it out on one network is a flaw. Lack of cutting-edge features such as a GPS is a flaw. The on-screen keyboard is a major gamble which could turn out to be a serious flaw. The battery life, although improved, could be a flaw in the design. Folks who go out on the 29th to buy an iPhone are buying a new device and locking themselves into an expensive contract based on nothing more than faith in Apple. Now I'm not aversed to throwing money at a gadget that doesn't live up to all my expectations. Heck, I've even thrown dough at things that have become over a period of weeks nothing more than expensive paperweights, but when there's a 2-year contract attached to the deal, that's when I become wary.
For me a cellphone is a tool that has to work, not a toy, a piece of jewelry or a badge of honor. If it doesn't work, I lose money. Years ago I got burned by being an early adopter of a SmartPhone. I hate to think how much that piece of junk cost me in downtime and hassle. Sure, it was a nice toy, a cool conversation piece, but it was rubbish at doing what it was supposed to do. That kind of experience makes you very wary of combining the phrases "early adopter" with "crucial piece of business kit".
But for a moment let's assume that the iPhone is pretty much perfect in every way. Let's assume that it's the perfect fusion of cellphone and iPod. The keyboard works, the battery life is fantastic, everything works as planned. What next?
Steve Jobs has predicted that Apple will be able to shift 10 million iPhones by the end of 2008. To me, given the size of the market and the current penetration for market leading phones, this sounds ludicrous. If the iPhone was $250 and came with no contract strings attached, I'd still say that 10 million was overly optimistic. If, by the end of 2008 Apple has managed to shift around 3 million iPhones I'll be amazed. The 10 million iPhones statistic could be one number that comes back to haunt Apple next year.
Apple could launch two branded tin cans and some string and initially the product would fly off the shelvesThere are other limiters to the success of the iPhone other than technical ones. The main limiter is that the iPhone is a convergence device, and by and large, convergence devices haven't enjoyed anywhere near as much success as divergence devices. Over the short them the iPhone is bound to be a success. Apple could launch two branded tin cans and some string and initially the product would fly off the shelves. But the success of the iPhone won't be judged over the first 90 days, it'll be how well it performs over the first couple of years. The hype surrounding the iPhone has been extraordinary but this won't last at present for long once the device is out. It then relies on real-world reviews and word of mouth from early adopters. This will be where the rubber meets the road and after all the hype it will be really interesting to see what regular users make of Apple's new creation.