Tech Notes: Can Apple be boss of the bowl?

Jun 12 2008 by Herb Kim, The Journal

DESPITE unveiling a newer, faster version of the iPhone in San Francisco earlier this week, Apple chief executive Steve Jobs faces a major challenge if he wants the product to become more than a small fruit in a big bowl.

While the original wasn’t quite, as Jobs claimed it would be, a magical product that is literally five years ahead of the competition, he wasn’t too far off.

The hugely-anticipated phone packed a lot of groundbreaking features into its shiny little frame, including a lovely big LCD screen, a fantastic touch-screen interface and, of course, the best music and video capabilities available on any phone at the time.

Twelve months after it launched – an eternity in the fast-paced world of mobile phones – these features still stand up to scrutiny.

Make no mistake. The iPhone has had a huge effect on the handset side of the industry. Think back a year and you couldn’t find anything that looked nearly as sleek, nor with such an innovative touchscreen interface.

Now the industry is becoming littered with products – iPhoneys, if you will – that offer similar features and designs. It’s good news for the consumer, particularly for business users, but it makes Apple’s job extra tough if it wants to become more than a bit-part player.

You see, in the mobile music player market, Apple is huge. In the mobile phone industry, however, it remains relatively small in a market that sells a billion products each year.

When Jobs announced iPhone 1.0 in January last year, he set a fairly modest target of selling 10 million units by the end of 2008.

Given that the phone has only sold six million in 12 months so far, it may struggle to reach that target.

Jobs can’t be happy with that. And if you want proof, look no further than Monday’s announcement.

During his speech, he revealed the new version will come in two colours, will work on 3G networks, with a better camera, and will have GPS satellite navigation built in for location-based services.

More significant, though, is the fact that the new product will be available at around £100 – a significant reduction on the first model – and for free on some tariffs.

It’s a clear indication of Apple’s intentions. Forget a mere 10 million. They want to sell masses of the things. Whether the new version of the phone will manage to achieve that is tough to say.

But given Apple’s innovative history, it sure will be interesting to watch their next move in this space.

Herb Kim is chief executive of Codeworks, a centre for digital innovation based in the North East