iPhone 3G: the Second Coming
Last week, after an eagerly waited and much speculated upon announcement from Steve Jobs at the World Wide Developer Conference, we finally got the story on the 2.0 version of the iPhone, known as iPhone 3G. While it’s really iPhone 2.0, we get the appearance of a 3.0 product with the new name. The event was a combination of Woodstock love fest, fan boy rally, and reality distortion field generation par excellence. But Steve Jobs announced what most people were expecting, and then some.
In the past, when people have asked me what I have thought about the first generation iPhone, I told them “Excellent as a media device: music, movies, YouTube, email/web browsing are all seamless.” But the flip side was this: as a data device is was sorely lacking. Specifically:
- No 3rd party applications could be (safely) installed
- No data, including Office files, could be transferred to the iPhone for editing
- The PIM (Personal Information Management) tools were immature: Address Book had no searching, Calendar had no colors for sub-calendars, Mail was weak
These will change with the iPhone 3G and the updated iPhone 2.0 software expected on July 11. Here are the highlights:
- Apple’s App Store will permit and distribute 3rd party applications for the phone, in some cases over-the-air
- Integration of Microsoft Office and Apple iWorks documents. (Though we don’t know yet about “editability”)
- PIM upgrades: Address Book will allow searching (though not any “cut & paste” yet?), Calendar will support different sub-calendars with different colors, Mail will allow push technology from Exchange via ActiveSync.
There are several things both explicit and implicit in the announcement that could change the way people use mobile devices like smart phones. While 3G and GPS are not a new item in cell phones, the combination of a number of elements in the iPhone ecosystem could change the game.
- Location Based Services: while there are other phones with both 3G and GPS, the iPhone holds out the promise of an easy-to-use, high resolution mobile device that can support services that rely on knowing where you are. One was demoed at the announcement, Loopt is a social networking tool that would tell you where your friends are and vice-versa. Adaptive GPS (A-GPS) will take advantage of the closest satellite as well as WiFi and cellphone tower triangulation to identify a users location. Will this serve as the communicator locator from Star Trek: The Next Generation, or introduce a privacy concern?
- 3rd party applications: The Macintosh has some of the most innovative developers, several apps previewed at the announcement could have a profound impact on productivity, enterprise connectivity and gaming. 250,000 iPhone software development kits have been downloaded and an analysts at Piper Jaffray believes it could be the start of a billion dollar ecosystem. The previously existing Web-based-only applications are trivially easy to “install” (use), but can be slow to start up and don’t work without a connection to the Web.
- Enterprise connectivity: Access to the corporate Exchange server, previously only available for the BlackBerry with the BlackBerry Enterprise Server, could have an impact on how corporate users access their email, calendar and contacts. Could they turn their BlackBerry back in?
- Wide availability: Presently, the iPhone is only (legitimately) available in 6 countries. Of course, unlocked versions have appeared everywhere, not tied to the official carrier of the country. When I was in Hong Kong last December, I saw iPhones available many places for sale, despite the fact there is no carrier there. By July 11 this year, it will be available in 22 countries, and 70 are expected by some time next year. Notably missing on the map are China and Russia, but confirmed contracts with carriers there seem to have simply missed the announcement date, work continues apace.
- Cloud computing: Apple plans their own over-the-air updating system, “Exchange for the rest of us” as it were. The rebranded .Mac, aka MobileMe will allow near real time synchronization of email, calendar and contacts between the iPhone, Macintosh, and web-based PCs. More on this in a subsequent article.
TCO vs. ROI?
Although the new iPhone 3G will have a lower initial purchase price of $199 vs. the previous $399 for the 8GB device, the Total Cost of Ownership is measured by the initial cost plus the ongoing monthly service fees over the 2 year commitment to the carrier. Announced by AT&T on the same day as the iPhone 3G, but not as part of the Apple announcement, was the new pricing service for the device. The monthly data plan and SMS plans will cost more, making the device more expensive to own over 2 years by as much as $160. But perhaps the more valuable analysis would be the Return On Investment. The incremental value of being able to pull data down faster over a 3G connection, or the added value of GPS functionality… all add up over a 2 year period and may be compelling enough for a new purchase, or upgrade.
Thanks for coming along.