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| Monday, June 25, 2007 |
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THE NEXT GENERATION
Apple's iPhone will change the very nature of mobile communications with its dazzling design and interface
Ryan Kim, Chronicle Staff Writer
Monday, June 25, 2007
Call it the iPhone effect.
That's what you get when you throw a potentially game-changing device from an innovative pioneer into an established but still evolving industry. Apple's uber-phone, a media and Internet device that goes on sale Friday, has the potential to create seismic shifts in the cell phone industry larger than the size of the iPhone's sales, analysts and observers said.
With its radically different approach, the iPhone is expected to cause a collective rethinking on everything from hardware design and user interface to consumer expectations and media consumption. It might even prompt a new gold rush in Silicon Valley, if you believe some enthusiasts.
This means that even if you never buy the shiny, expensive gizmo, its influence could reach you in a number of ways.
"Apple has proven it with their Macs and iPods," said Mike Maguire, an analyst at the market research firm Gartner. "While it may have a relatively small market share, what they do in terms of innovation has disproportionate influence. It's going to force a lot of other folks in the handset business to redouble their efforts."
Apple's foray into the cell phone world also shines a light on an industry that has already made a name for itself, with more than 235 million mobile-phone users in the United States.
But Apple will create even more buzz about mobile devices in general and, in particular, pricier smart phones, the mini-computers that are still a fraction of the cell phone market. That's why none of Apple's rivals seems to mind the added competition.
"What the iPhone does is make smart phones mainstream," said Mike Lazaridis, chief executive officer of Research In Motion, maker of the popular BlackBerry. "It's raising all the boats in the harbor. People are now saying smart phones are the wave of the future."
But the more profound impact for all cell phone users is the emphasis Apple is putting on design, both hardware and software. With its touch-screen interface, 3.5-inch screen (measured diagonally) and elegant simplicity, Apple is pushing the cell phone in directions it hasn't gone before.
Jakob Nielsen, principal of the Nielsen Norman Group, a user research company, said the spacious screen and its multiple-touch interface should convince the industry that the larger screen and new input method can unlock a wealth of applications.
He expects to see many more touch-screen menus as manufacturers key in on the opportunities available through this type of interaction.
"We've been in that clumsy, obscure DOS age until now, but the iPhone takes us into the graphical interface age, like with the Mac and Windows," Nielsen said. "Once you've experienced something good like this, you won't accept something bad. It'd be like going back to DOS after using Windows."
Sky Dayton, chief executive of Helio, a niche phone company that offers eye-catching mobile devices, agrees that the cell phone industry has dragged its heels in perfecting design and user experience.
"The devices look pretty much the same and there hasn't been much inspiration," Dayton said. "What the iPhone really helps to do so is elevate the buying criteria and adding design into the process."
True to form, Apple's entry into the cell phone market has been on its own terms. It has held the upper hand in its partnership with AT&T, which has an exclusive multi-year deal to sell the iPhone. Apple has dictated a number of terms, including the price of the phone, which, unlike most phones sold in the United States, will not be subsidized by the operator. The phone will bear only a few traces of AT&T's brand.
The industry standard has allowed carriers to dictate the relationship with manufacturers, essentially picking the phones and services they sell.
Observers said that if Apple is successful, it could create more pressure for carriers to loosen their control. That could mean more services and perhaps a wider range of phones available.
Apple has been able to create a phone to run on its own platform, said John Maeda, associated director of research at MIT's media labs. "That's a game changer. Most manufacturers, their hands are tied. This is amazing."
Charles Golvin, an analyst at Forrester Research, said the fact that Apple is selling the phones in its own stores also could lead to more direct selling by manufacturers to consumers, bypassing the carriers who handle most of those transactions. Recently, Nokia has opened stores in Chicago and New York and is selling some phones that are not offered by carriers.
The iPhone has the ability to raise awareness and expectations for mobile media and Internet usage. So far, most people use their cell phones for voice calls and text messaging. But only about 11 percent use them to access the Web, according to Forrester Research. About half don't even know they have a browser on their phone, Golvin said.
With the iPhone creating such a buzz, it could raise awareness of such capability, said Michael Gartenberg, a Jupiter Research analyst.
"What we're seeing is the beginning of a possible sea change," Gartenberg said. "Apple is educating consumers about what phones can do."
If the iPhone catches on, the momentum could spill over to other Silicon Valley companies, helping spur development of Web applications designed for the device, wrote Tomi T Ahonen, co-author of "Communities Dominate Brands," in a recent blog post.
"If Apple ... says its future depends not on the Macintosh computers or the successful iPods, but this latest gadget, the iPhone ... and suddenly it fulfills all the heartbreaking failed promises of PDAs and palmtop computers of the past," Ahonen wrote, this is "the new dawn of the computer age" and the "real revival after the dot-com bust."
There are still plenty of questions about the iPhone, and its effect on the industry is not a foregone conclusion. The device still has to work as advertised and nail the basics if it is going to have a widespread effect, said Rich Garwood, president of Verizon Wireless' Northern California/Nevada region.
"It's not just the device, but it's about the whole customer experience, the network capability, the product and services that are offered, and price/value proposition," Garwood said. "You really have to think about it all."
AT&T officials, however, are confident the iPhone will be successful. And that should have an effect on everyone, said AT&T spokesman Mark Siegel.
"I am sure the iPhone will drive innovation in the industry," he said. "I think everyone wins as a result."
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/06/25/IPHONE.TMPLabels: Apple, iPhone, Macintosh |
| posted by Perimbean @ 2:49 PM |
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WEEKEND EDITION: Will Apple's IPhone Live Up To Its Hype As A Game Changer?
June 24, 2007: 09:47 PM EST
WASHINGTON (Dow Jones) -- One of the most anticipated consumer devices ever, the iPhone is certain to find plenty of buyers when it first goes on sale despite a lofty price tag.
Industry analysts expect the iPhone to leap off the shelves after Apple Inc. and AT&T Inc. unveil the touch-screen handset to the public on June 29. Supplies could quickly grow scarce and the phone might become hard to find after an initial consumer rush.
But after the initial buzz fades, analysts are less certain whether the iPhone will turn into a mass-market juggernaut, especially at its debut price of $499 and $599. Reaching the 1 million sales mark in the first few months is quite possible, but the device's unusual design, limited distribution and resistance from the corporate world may temper the product's appeal long-term.
A survey by the wireless-research firm M:Metrics, for example, showed that only 9% of all mobile-phone subscribers in the U.S. expressed "strong interest" in buying an iPhone. And the firm IDC found that 10% of wireless users are willing to pay full price to obtain one.
"I am a true believer in the iPhone -- it's a beautiful design," said David Chamberlain, a longtime industry analyst at In-Stat, a research firm based in Scottsdale, Ariz. "I am not a true believer in spending $600, even on something like that."
Sliver of success
Clearly, Apple (AAPL) and AT&T (T) , its sole distribution partner, recognize that the iPhone will have limited appeal given its high initial cost. Yet there's considerable payoff by just gaining a small slice of the mobile market.
"Even if Apple captures just a fragment of the most interested customers, it could sell a few million units in the first year," said Mark Donovan, senior mobile analyst at M:Metrics, who noted that few wireless handsets have achieved that distinction.
Such success isn't unheard of. AT&T's wireless business, formerly called Cingular, sold several million Razr phones by Motorola Inc. (MOT) in the first nine months of an exclusive contract, when the industry's first ultra-thin handset was issued in mid-2004.
That model also sold for $500 when it first came out, though prices later plunged. Most consumers can now pick up a Razr for free with a two-year contract.
More recently, Nokia Corp. (NOK) has sold more than 1 million of its fashionable 8800 series -- a handset even costlier than the iPhone - in the past two years, mostly in Europe.
Since the iPhone is more advanced than the Razr and 8800 handsets, the odds seem high that it will match or exceed their success. The iPhone is based on a unique touch-screen design, functions much like an iPod and provides widescreen video and web-browsing, features unavailable on other mobile handsets.
Avi Greengart of Current Analysis, one of the few analysts who's actually used an iPhone, said Apple's new toy has an "element of elegance" unusual in mobile handsets and that it's easier to use than competing devices such as the Palm Treo. "Where the iPhone is unique is not in what it does, but how it does it," Greengart said.
What's more, the exclusivity of the product and the aphrodisiac-like appeal of the Apple brand enhances the iPhone's already iconic image.
Wealthy customers, status-conscious consumers and young adults are expected to be drawn to the device like moths to a flame -- not to mention the legions of Apple faithful famously devoted to the company's products. If you're thinking of trying to get an iPhone on launch day, some preparation may pay off.Watch a video report.
Supply and demand
A big question from the start was whether AT&T and Apple would have enough units in stock to match the early onslaught of consumers. Michael Coe, an AT&T spokesman, couldn't promise that enough iPhones would be available in the company's 1,800 retail stores.
"For the first few months, people will want this cool device ..." Greengart said. "The iPhone is clearly the 'it' phone today."
Chamberlain said the buzz around the iPhone is unlike anything he's ever seen, comparing it to the introduction of the Ford Mustang in 1964.
The first public viewing of the Mustang, which took the auto industry by storm, was covered by all three existing major television networks. More than 1 million Mustangs sold in the first 18 months.
"It's not a phone. It's not an iPod. It's a phenomenon," Chamberlain said. " They don't even have to release the damn thing to consider it a success."
After the iPhone finally becomes available, however, the inevitable criticism and sniping from critics and competitors will follow.
"That's when the conversation changes," Donovan said. Added Greengart: "The hype and expectation at this point are almost impossible to meet."
Some analysts question whether heavy e-mail users will approve of the iPhone's button-free keyboard. Other expected complaint topics may center on battery life and Internet-access speeds.
Even before launching the iPhone, Apple sought to preempt critics this past week by announcing that it has improved the battery life and substituted a glass for plastic screen. Complaints about scratched surfaces bedeviled earlier models of the iPod.
Accessing the Web at faster speeds, however, is not in the cards anytime soon. Early models of the iPhone will run over AT&T's slower mobile-data network, not the company's swifter "3G" network.
What's also unknown is how much AT&T plans to charge for monthly service. IPhone buyers would have to pay one rate for voice calling and an additional fee for Internet access. AT&T charges customers who use other Internet-enabled phones $20 a month for unlimited data access, but the company has not revealed how much it will charge iPhone users.
The good news is that prospective customers showing the most interest in buying an iPhone already spend more per month on wireless plans than the typical mobile subscriber, according to M:Metrics.
"Those are among the most valuable customers," Donovan said.
Market opportunity
Yet the most sought-after customers - higher-paying business clientele - are unlikely to buy iPhones in large numbers for professional use. The email software used by Apple is not compatible with the secured networks of U.S. companies and most do not plan to make their systems compatible with the iPhone.
In addition, Apple has potentially cut itself off from large segments of the population by signing an exclusive "multiyear" deal with AT&T (the two companies have not disclosed the exact length of their contract). Though AT&T is the No. 1 mobile carrier in the U.S. in terms of customers, it only controls about 27% of the market, according to Forrester Research.
In addition, the iPhone will only be available in the U.S. in 2007 and it won't reach the shores of Europe and Asia until 2008 and beyond.
AT&T executives, for their part, repeatedly have called the iPhone a "game changer" and believe they'll siphon off thousands of customers from rivals. They say more than 1 million potential customers have signed up at AT&T's Website to receive information about the iPhone -- 40% of whom now subscribe to competing mobile services.
And for AT&T, the stakes are particularly high. Verizon Wireless (VZ) , the nation's second-largest mobile operator in terms of subscribers, has been adding customers at a faster clip and could overtake AT&T within a few years. Success of the iPhone will help the company widen its lead over Verizon.
Comforted by the iPhone's pre-launch reception, meanwhile, Apple executives have publicly targeted a goal of selling 10 million units by the end of 2008. Whether they meet that target or not, the iPhone surely will be easier to find next year than in the next month.
"The first few weeks you won't be able to find one," Chamberlain predicted. " This is hot."
http://money.cnn.com/news/newsfeeds/articles/djhighlights/200706242147DOWJONESDJONLINE000371.htm |
| posted by Perimbean @ 2:47 PM |
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Apple updates Safari and Mac OS X to fix security issues
By Justin Berka | Published: June 24, 2007 - 10:02PM CT
The Safari for Windows release has led to a number of criticisms of Apple and of the browser, most notably related to security. Security experts and bug hunters had a field day with the launch, causing Apple to issue a security update for Safari soon thereafter. And now, hot on the heels of the 10.4.10 update, we've got yet another Safari update, as well as a Security Update for OS X.
First up is Safari. The 3.0.2 update fixes a number of issues for Mac and Windows users, and also includes some security fixes. On the Mac side, the update fixes some crash issues with parental controls and Google Reader, fixes some HTML issues in Mail, and deals with assorted iChat and Dashboard problems.
The Windows version received significantly more tweaks. A good number of crash bugs, caused by everything from RSS to authentication were fixed. Apple also fixed problems with text disappearing depending on where Safari was installed or how many fonts the user had installed.
Last but not least are the security updates. Two Safari-specific security holes were patched; the first involved a website being able to modify the address bar, and the second fix was for a cross-site scripting hole in JavaScript. The Safari update also includes two fixes for WebKit along with all of the other feature and security updates, so it's probably a good idea to grab it.
If you're not using Safari 3 but still want to be secure, Apple is taking care of you with Security Update 2007-006. As mentioned, this update fixes two security holes in WebKit and WebCore that are also fixed by Safari 3.0.2. The WebKit issue allows hackers to crash Safari or execute code by corrupting memory, and the WebCore issue allows cross-site scripting via HTTP. Since these two security holes are also fixed in the Safari update, you don't need to grab this if you already have Safari 3.0.2, but it's in Software Update if you're still using Safari 2 or just want to feel twice as secure.
http://arstechnica.com/journals/apple.ars/2007/06/24/apple-updates-safari-and-mac-os-x-to-fix-security-issuesLabels: Safari, security, update, WebKit |
| posted by Perimbean @ 2:45 PM |
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Apple sells one of every seven notebooks
Gregg Keizer, Computerworld
25/06/2007 13:50:49
Apple got help from the update to its MacBook laptops to push its share of the laptop market up nearly two points in May, to 14.3 percent, a research firm said Friday.
"Whenever Apple gets a new product out, they get a nice bounce," said Stephen Baker, analyst with NPD Group. According to NPD's data, the laptop "bounce" was 14 percent month-over-month.
The May boost put Apple's laptops in fourth place, behind Hewlett Packard Toshiba, and Gateway, said Baker, and moved its combined laptop-desktop sales share from 11.6 percent in April to 13 percent last month. In retail-only, Apple showed a slightly smaller increase, from 9.6 percent to 10.8 percent.
"Everybody's notebook business grew last month, but Apple's grew a little faster than the market overall," Baker said, adding that the company's growth rate has been larger than the industry average for some time. Desktop sales, meanwhile, continued to stagnate, although there too, Apple has an advantage.
"Desktops sales are declining, but [Apple's] are declining a little less than others." Apple's desktop machines -- the all-in-one iMac, Mac mini, and Mac Pro -- accounted for 10.4 percent of all desktop sales in May, a small increase from April's 10.2 percent. Apple should get another boost starting next month, as back-to-school purchases begin, Baker said. "Apple will have a better bump at back-to-school in the July-August-September time frame. Everybody gets it the last couple of years, but Apple gets a little bit bigger one, since compared to the Windows guys, it's doing more notebooks."
Not that everything is rosy. "What we're seeing in general is that desktops have been a little weak in the first half of this year, and although notebooks have been strong, they're showing a declining rate of increase, if that makes sense," said Baker. "In 2006, even 2005, the month-over-month increases were around 50 percent. Now they're 30 percent, 35 percent, even 25 percent."
Laptop sales are hitting a couple of plateaus that even Apple won't escape, Baker argued. "ASPs [average sales prices] have flattened out, and are pretty stable now month to month. And at some point, you just can't keep growing [sales] by these numbers."
He's also predicting that this year's back-to-school sales will be less impressive than in past years. "The market is slowing up a little. I'm pretty bullish about back-to-school, but a little less bullish than I have been."
Baker also said he expects Apple will soon revamp its primary desktop line, the iMac, a move that Apple-centric bloggers predicted would happen at last week's Worldwide Developers Conference (WWDC), but are now forecasting for end of July or early August. "I would suspect [an iMac refresh] would happen pretty soon. Both of the notebooks have been updated, so now it's time for Apple to look at that piece."Labels: Apple, Macbook, Notebook |
| posted by Perimbean @ 2:41 PM |
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