The iPhones?

It’s a terrible crying shame i don’t do these more often, isn’t it? OK, well, try to start a New Media department for an independant label from scratch, finish your final year of grad school, work on a freelance gig and deal with both health and family issues you don’t “want” to come to terms with and voila – preso, instant recipe for dropping some ball some where (geesh, that sounds like I should be a pre-adosellent kid or something)

anyway… I appologize for the delays, I do have thoughts, and, well, here… they are… – tech web story (also carried by ap) on apple’s patents

Ok, so we all know the power of the iPod and iTunes and I am sure we’re all curious with Cingular‘s Motorola KRZR and Verizon‘s Chocholate through Samsung and the number of partnerships (esp. with Cingular in the last few weeks) what’s to come next.

Apple‘s attempt at a foray into the mobile communications market spells something… the market for mobile phones is enormous and even a small percentage share could make money, but at what expense?

Apple‘s patents are aimed specifically at entertainment market, specifically on this speculation in the short term music marketing for thier iTune store, in trying to integrate their store technology to mobile strategies, surmised as a telecommunications device such as a phone. Does Apple‘s name have enough to compete with Motorola, Samsung, Sony-Erikson and LG, the market leaders already well integrated into mobile distribution for thier products (handsets)? Does an Apple branded phone stand up against the existing, less-than-first generation adapted users, the smart phone market of multimedia inlay, the ever fickle popularity of technology?

Well, let’s first disect the idea. Is Apple aiming to manufacture their own multimedia device, an offshoot of the iPod to become a communications tool or are they attempting to lock up technology they can then lisence to allow others to brand? Well, chances are, knowing Apple, this is not a lisenced branding line extention, this is a foray into a new marketplace for them.

Consider this past: They refused to share their computing systems for decades and kept a closed sourcing of everyting well into OS8, including the adaption of compatable software and even on OSX there is still a degree of limited functionality based on lisencing agreements which are much more difficult to traverse than either open sourced linux or the Microsoft NT outlets. When other personal computer manufacturers going all the way back to IBM were lisencing Apple’s IIe and Macs were stand alone closed systems. Secondly, they built their entire music and entertainment system based on a similar closed environment and allowed only limited partnership enlightenment in their short term expansion in order to broaden the adaption rate, which, once it was acheived, they closed back up like a clam out of water. Thirdly, having psuedo-partnered with several carries on a limited basis to a limited adoption rate already (read: low success) and a belief that the iPod / iTunes name is impenetrable as well as an steady influx of new Apple, OSX users there is a false sense of security.

Granted, the issues isn’t with most “phones” in multimedia communications, its been network compatability and the mobile bandwidth in the United States. Many multiuse phones suffer as much from network connection failureas they do from issues with the hardware on the phone itself. And, with multiuse phones, some of the biggest complaints come from the ability to function well as a phone while STILL acting as a multimedia device. Examples are the early Palm devises as well as the Blackberry that failed as phones but helped adapt both email and personal scheduling services into the mobile phone concept. But, even in a simplier standard, even some of the best rated “camera phones” tout better camera abilities than multi carrier connecton capability. Even for multimedia users, from corporate buyers to casual users who are not first-adopters, the top function is still reliability on communicaton, particularly phone reception and the major manufacturers both of basic function and “smart” phones still battle these in a very tight market. Consider the luke warm reception to the Chocolate and the KRZR that were first and foremost players with phones placed on top as an afterthought – medocre sales, less than complete adoption by even the early adopters of those proposed technologies.

In this environment, what makes Apple believe a music phone is going to compete when the carriers themselves and a number of independant studies still show that adoption to the masses is dependant on telephone functionality and then “add on benefits” second? That remains the key question. Is Apple‘s brand strong enough to overcome these challenges? Will they be able to create an infalable product the way they conceivably did with say, the iPod? One won’t know until they launch the device.

In the meantime, Apple recently announced via several major media sources a turnaround in their marketing to a more Mac related branding moving away from the highly successful three year launch of the iPod / iTunes platform. That is reflected in the Apple versus PC campaign launched earlier this year that enjoyed both viral and mainstream success in its appeal and at least some short term adoption increases in both the computers and operating platforms. However, with the blitz associated with the oncoming Zune player and store and whatever related marketing will be done between the SanDisc / Real / Best Buy partnership will Apple hold its ground? With the increased pressures in the OTA (over the air) marketplace from Verizon (and its worldwide partner Vodaphone) to the new Cingular tactic (partnering with any number of music ideas from satellite streams to music stores to subscription temps) how will concepts fair for Apple? Is Apple prepared to competed on two different, imploding fronts?

Theoretically, yes. Yet, realistically, no.

Even if Zune is an innitial failure, it puts Microsoft and both its player brand and store modle ahead of Apple in the fight for mobile space with both the “short range” bluetoothabilyt and the more substancial marketabilty with the content providers based on coorperate leverage, marketing ploy and the falability of all inniating brands over the long term. On top of Microsoft, there are also the number of already competing established brands, at any level of adoption, for any level of service, already competing in the market for mobile content.including the two biggest carriers striving to establish service in North America for mobile music content, Cingular and Verizon.

remember Ford‘s hold on the marketplace for cars at the beginnning of the last millenium? ok maybe you’re not that old, but someone introduced a cheeper product, added a new feature or two (in that time color was a feature) an improved distribution network and it changed everything. Maybe, Sony‘s hold on portable cassette players comes to mind in the 80s? Same deal, the technology was easy enough to manipulate, price was easy enough to match and distribution partnerships were easy enough to come by. Someone ALWAYS comes in cheeper, with more functions / compatability regardless of what strangle hold you try on the market. In Apple‘s case it is in part the sleek simple design of the player (easy for someone to surpass, ask anyone who’s clickwheel has failed what they think), greater compatability of the player or library (ease of backing up their stuff sucks ass for Apple in this case, too much DRM not enough user interface and blocking of third party compatability will hurt them) or the worst the iTunes store itself (horrid DRM – from a label standpoint great they try to protect copyright but their files aren’t compatable to anything DRM or not and the sound quality blows and they refuse to upgrade despite increased overall standards, the pricing scheme also sucks ass because its not a sliding scale and it potentially rips off the artist and the user horridly by treating every song equal, etc.)

If you refuse to see it in those terms lets consider a number of competing service ideas for a second. Right now, if you want to fill your portable entertainment device, you need to either rip your existing product, you need to download it from a retailer (either a DRM or an open sourse, and in the case of a DRM on that is either open sourse or device specific), or you need to share it based on one of the above ideas. Well give Apple‘s inability to budge in its software, that is potentially a strike against them. Despite Microsoft’s apparant disregard for open PlayForSure DRM support, there’s a good chance based on their history, lisences will open up.

The gold of the moble market is about content and the ability to leverage content. Its not about control of content. Apple right now is built around control. They seek to control the content providers based on their negociating schemes and they seek to control the consumer with their distribution of product. The oddness of it is that other people will have the broader open mind than Apple which is usually the trail blazer.

If, say, someone were to introduce on the mobile front, not only a functional telephone that allowed for mobile entertainment content they would need to blend the best of all worlds effortlessly and not focus on a single use of the devise. Sony‘s latest experiment with this is already ahead of the market with its walkman offering, nevermind the already multi carrier phones available opening the market beyond early adopters.

Where Apple‘s strentgh in other products has been attracting early adopters they will now be leveraging the brand name itself of iTunes and iPod and not thier cutting edge technoloty if they are going to be successful. furthermore, unlike the build in distribution system apple has for its existing products, phones are dependant on carriers to facilitate functionality and create a basic distribtuion chain. Apple can’t just use its traditional retail venues unless Apple employs a mobile virtual network operation strategy and effectively leases excess capacity from other mobile service providers and resells it to customers. This could backfire in poor service if and when the network hits a critical copasity (remember what used to happen to long distance carriers that rented AT&T’s lines when AT&T hit end-mass??) It also provides for additional work for Apple in managing the billing and sales aspects.

Of course, if they go the route of selling it through an existing carrier they cannot be as demeaning as they have been to the content providers in Music, Film and Television where they had a leveraged barganning chip to these struggling entities. They can’t outclass thier price, they can’t control the network that already exists just for their phone and tailor pricing schemes and other things to their needs and they can’t throw thier untest weight around like an 800 lb gorilla when the other handset makers offer full lines as compared to potentially their one or two specialty models.

There are ecosystems already in place, unlike what Apple created with Mac and with iPod / iTunes where the ecosystem essentially developed around them. The rules are different when you consider the iPod until Microsoft jumped in competed against a number of non-comsumerbrands and iTunes competed against almost no establised online digital retailers and Mac was aimed at a userbase so niche that no one else was competing in it (hence their meager under 10% market share of the operating systems)

This isn’t meant to be an assination of the attempt at a devise that blends entertainment capability and communications on the part of Apple. It is mean to establish some critical thinking in terms of storage capability (a big problem with phones that try to do entertainment), network cabability (a big problem with entertainment devices that try to be phones), weight, battery life, functionality and of couse the ability to tie your entertainment into mobile (can i buy or rent my content easily, can i move it from devise to devise, such as my computer to my phone and vice versa, can i even move it from phone to phone on upgrades?) There are a number of factors being overlooked in the innital excitement of the innitial offerings of Apple patents.

Furthermore, with new enterants into Apple‘s core tuft of straight entertainment devices with Zune and the SanDisc / Rhapsody offering as well as the lackluster response to mobile video content reported on my several surveys including Neilson recently and the flattening sales and diminshing margins of the iPod itself this is a dangerous time for Apple on the player front. As for the iTunes component, again, Rhapsody is poised to move forward with SanDisc, Best Buy is getting in on the action, Zune is launching and the brick-and-mortor animals are firing back from Walmart and Target to indie chains about pricing models skewing prices too far to the digital world undercutting proper competition. This isn’t likely to go away as the convergence of multimedia and communications goes further mobile and reaches far beyond the realm of just entertainment on your telephone


About thedoormouse

I am I. That’s all that i am. my little mousehole in cyberspace of fiction, recipes, sacrasm, op-ed on music, sports, and other notations both grand and tiny:
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