Four big "ifs" of iPhone

Stan Beer
Sunday, 10 June 2007 09:02

Business IT - Technology

As the Apple Worldwide Developers Conference approaches once again, there has been speculation over whether the focus will be on Leopard or iPhone. For developers, there is one overriding issue; for consumers there are at least another three.

The four big "ifs" of the upcoming iPhone arise out of Apple's traditional obsession of keeping tight control over its product platforms. The iPhone is entering a huge market where pretty much everything is open, interchangeable and has been to a great degree been commoditised in favor of the consumer. Having played with one briefly at a Macworld media audience, I can say that the iPhone is a captivating device. However, playing with an iPhone is not the same as living with one.

Will mobile phone and smartphone consumers accept the closed Apple iPhone platform? Right now, all the market research screams yes. Consumers in the US are lining up to get their hands on the new Apple device when it goes on sale on June 29. However, virtually no-one has had a chance to touch an iPhone, let alone live with one.

Market intelligence says that the still growing legions of Apple faithful alone will be enough to buoy iPhone sales for years to come. However, even Mac and iPod fans will eventually be forced to judge iPhone on its merits as a cellphone and smartphone first and foremost because most of them already own phones. 
And it is here that the big "ifs" arise.

The first big "if" concerns price. The question is if consumers will be willing to pay US$499 and US$599 up front on a two-year contract for a phone. OK, it's also an iPod and many iPod owners also have phones, so iPhone gives them two devices in one package. However, outside the US at least, even the fancier cellphones, with smartphone capabilities, such as the Blackberry Pearl and Nokia N95, can be had on two year contracts for nothing up front and dirt cheap capped price plans.

Then what happens after two years are up? These days cellphone users are used to simply ditching their existing phones and getting a new phone on contract without parting with a cent. Can Apple convince them to part with another $500 or more to upgrade to its latest model iPhone when the contract runs out?