iPhone's global success is more marketing

myth than reality

By Joe Wilcox | Published October 1, 2009, 12:15 AM
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American business history almost certainly will recall Apple as one of the most successful
marketers ever. With iPhone, the company has performed a remarkable magic trick: Making the
late-starting mobile seem ready to take over the world. But the hard reality of facts -- not the
torrent of glowing emotions coming from American and European financial analysts, journalists
or Mac loyalists -- show something else. Apple's smartphone is by no means the roaring success
everyone here claims it to be.

Let me preface by reminding that I'm on record as

calling Microsoft's mobile strategy a train wreck and asserting that the cell phone is poised to
replace the PC. I've also called Apple's mobile platform -- iPhone, iPod touch and App Store --
as leading contender to become the next-generation computing platform.
But hard mobile phone data and analysis raises doubts about whether Apple has got a sure
winner. After being an early App Store cheerleader, I'm increasingly of the opinion that Apple's
mobile platform may not reach escape velocity after all. Emerging markets and Apple's flawed
strategy in India and Russia top my reasons for questioning how high the platform will ascend
before falling back to earth. Other factors, such as device pricing and emerging market trends
around mobile money, also work against Apple's present iPhone strategy.
Some iPhone fans might ask: Surely Apple's global reach -- more than 70 countries -- is enough
to bring the iPhone/App Store platform everywhere? But there's more to selling handsets than
having presence. I contacted IDC Worldwide Mobile Phone Tracker senior research analyst
Ryan Reith about Apple's global reach. He explained:
The 70+ countries is something that looks good on paper, but in terms of volume it doesn't
address the regional dynamics. One of the reasons why Nokia and Samsung are so good in
developing markets is because they have mastered the art of effective manufacturing and
distribution. They can make devices/services that suit the market. Apple is clearly not that type
of company, nor do I think they are going in that direction. Having handsets readily available in
70+ countries is good for brand awareness, but it won't necessarily drive market share.

Another BRIC in the Wall

What is iPhone's real marketshare? In the United States, during second quarter 2009, Apple
ranked No. 6 in handset unit marketshare, behind Nokia in one of its three weakest markets,
according to IDC. Apple's share: 5.9 percent. By comparison, leaders Samsung and LG had 24.8
percent and 22.1 percent unit share, respectively.
But Apple's global showing is more revealing, and the numbers fall far behind US hype about
iPhone and App Store. For example, combined, four emerging markets known as BRIC -- Brazil,
Russia, India and China -- account for more than 40 percent of world population. There, iPhone's
largest unit marketshare in any one country was 1 percent -- in Russia during second quarter,
according to IDC (That's actually good enough for rank of No. 7). Marketshare is too small to
even register in the other three countries. That's three goose eggs for iPhone. By comparison,
Nokia unit marketshare ranged from 38 percent to 56.1 percent in these same four countries
during second quarter.
China isn't so surprising a non-showing considering that only in August did Apple cut a
distribution deal with second largest wireless carrier China Unicom. But that doesn't explain
iPhone's tiny share in Brazil, India and Russia. The reasons are actually many, and on closer
analysis they don't bode well for iPhone gaining significant unit marketshare any time soon --
perhaps not unless Apple just gives away handsets (Please jump to next subhead for further
analysis).
During this month's new iPod launch event, Apple
CEO Steve Jobs said the company had sold 30 million
iPhones -- a number that is sure to increase when third
calendar quarter shipments are officially announced in
a few weeks. Thirty million is a remarkable number in
just two years, but from another perspective it's paltry.
In just the second quarter, Nokia sold three-and-a-half
times more handsets as Apple did in more than two
years, according to Gartner and IDC.
I've read the comments and commentary; iPhone
defenders try to dispute numbers like these by
insisting on only counting smartphones. They claim
the comparisons are unfair, because iPhone is in a
different category. OK, let's do that. Globally, during
second quarter, Nokia sold more than three times as many smartphones as Apple, according to
Gartner. Nokia's smartphone market share was 45 percent, while Apple's was only 13.3 percent.
There is another measure of success. Defenders of iPhone are all hung up on the applications, as
is Apple, which uses App Store like a marketing club. This week, Apple announced that there
have been 2 billion downloads from the App Store, which now has more than 85,000
applications. The number is humongous and quite simply unbelievable. Apple has shipped about
50 million App Store capable devices (including iPod touch). Assuming they're all in use, that
works out to 40 applications per device.
A World Apart
There are still more ways to put into broader context iPhone's 30 million units. Global annual
handset sales exceed 1 billion units a year, according to combined analyst reports. In about the
time Apple shipped 30 million iPhones, all manufacturers shipped about 2 billion handsets.
Combined analyst estimates put the number of cell phones currently in use at about 4 billion
units, with as many as three quarters in emerging markets. Exactly how does 30 million in use
(presumably) compare to 4 billion? Apple's reach is small, but Americans would never know that
from all the noise here about iPhone (Jump to the next subhead for scorching indictment of the
American media).
Apple's challenge then is to gain more share, more rapidly. "Apple has had great success in
North America, but quite a bit of struggle remains in other regions, especially developing
markets," Reith said.
The reasons for iPhone's rest-of-the-world struggles are many and too many for this already
overlong post. I picked two, the latter being big enough for a series of blog posts.
Carriers operate differently in many emerging markets than here. For starters, there are
many state-sponsored carriers. More significantly, in some markets there are many smaller
carriers -- and these are not the ones distributing iPhone. It's not uncommon in markets like India
for phone users to switch carriers by swapping SIM cards. Small carrier competition creates
more consumer choice, but not for iPhone.
Earlier this year, Anshul Gupta, Gartner's principal analyst for mobile devices, discussed some of
Apple's emerging market missteps: "In India, iPhone was launched at $650, and it was locked to
operator for life. At first, price was high and secondly phone was locked in a market where
consumers are not used to such condition, and" where people "change operator[s] frequently."
But iPhone is different. "You cannot [swap] SIM cards," he emphasized, "because it is locked
onto [the] operator you bought the device from. An iPhone bought from Airtel will not work on
Vodafone and visa versa. Phone is not subsidized as well in India."
The perspective is about the same there in India as viewed from afar by the Gartner analyst.
"Apple bungled up big time with the iPhone in India," said Rohit Mishra, a student studying
mobile technologies at VIT University in Vellore, Tamil Nadu, India. "It still has a solid brand
and created the touchscreen crave that has resulted in the success of Nokia [XpressMusic] 5800
and Samsung Star." Nokia is India's market leader, with 56.1 percent unit marketshare in second
quarter, according to IDC. Samsung was No. 2 and Apple No. 22.
Rohit continued: "By pricing iPhone at Rs 31,000 ($600 approximately), Apple turned away a
huge bunch of people who were waiting for the iPhone. There is another issue here -- we don't
have 3G here. It's been launched by the state carrier in select cities, but that doesn't count for
much now."
Most of the world doesn't yet share the American obsession with smartphones. In many
emerging markets, mobile telephony needs are more basic: connectivity and commerce.
Governments and industry struggle to just get citizens connected with any mobile phone.
Something as sophisticated as iPhone isn't a consideration.
According to data presented during the GSMA Mobile Money Conference, held in Barcelona,
Spain, from June 22-29, 2009, mobile phone access is as little as 2 percent in rural areas of
Afghanistan, in a country where 75 percent of the population is illiterate. Increasing mobile
penetration is a primary goal there and among other emerging market countries. The benefits can
be substantial. According to GSMA: "A 10 percent increase in mobile phone penetration can
boost GDP growth by 0.6 percent."
Beyond connectivity, in many of these same
countries, governments and industry are looking at
ways to enable commerce. Mobile money is a primary
goal. While the concept has several forms, basically,
mobile money allows residents to pay for goods using
their cell phones and to receive money, too. Where
banks can't reach, mobile phones can. Rather than
store bills and coins under the mattress (if there is
one), people carry digital currency attached to their
mobile accounts.
In October 2008, Visa launched a mobile payment
network in India. A similar network launched in
Malaysia in April 2009, in cooperation with
Maybank, Maxis and Nokia. Three days ago, in
Awareness Times, Aruna Turay wrote about a new mobile money system opening in Sierra
Leone.
The point: The majority of the world's cell phone markets have needs that the iPhone isn't ready
to meet -- even with App Store as a huge asset. By the way, even Nokia is moving into the
mobile money business, announcing its own network in August. One line from the press release
makes the point: "4 billion mobile phones but only 1.6 billion bank accounts."
Before writing this analysis, I took the position that mobile payments would overshadow
applications. Apple has the one, but not the other. Reith disagreed. "My opinion is that mobile
payments will coexist on current OS/platforms, and will play a role alongside of applications,"
he said. "I don't think one will overshadow the other."
He added: "Mobile payments will interact with a lot of apps that are made for emerging
markets." That's good news for Apple and its powerful App Store. By number of devices, Apple
is puny. By number of mobile applications, Apple is a world-class leader. Additionally, App
Store offers a limited mobile payments system -- limited meaning its dedicated to application
purchases. An Apple bank, so to the speak, could actually increase the iPhone/App Store
platform's appeal in emerging markets.
Misguided Reporting
I'm not trying to demean or even diminish Apple's success with iPhone or App Store but to create
perspective too often lacking in US reporting. Many of my journalist peers are themselves
obsessed about iPhone and App Store. The number of blogs in any given week just dedicated to
new App Store applications is evidence enough. There is informational obsession with the device
that defies reality.
IDC's Ryan Reith agrees. "The view about American journalist obsession with the iPhone
couldn't be more true," he said.
It's that misguided obsession as expressed in two separate blog entries posted yesterday that
prompted my writing about iPhone. At the Apple 2.0 blog, reporter Philip Elmer-DeWitt asserts
that "iPhone's share of the smartphone market hits a record 40 percent." Really? In what alternate
universe? He writes:
Apple now has a substantial -- if not the largest -- share of the smartphone market in every region
of the world except Asia and Africa, according to a report issued Wednesday by AdMob.
Overall, the iPhone's worldwide share grew to 40 percent from 33 perent over the last six
months. In North America, its share of the smartphone market is 52 percent, as measured by hits
on AdMob's ads.
This data -- based on advertising measurements -- doesn't even remotely jive with Gartner or
IDC smartphone unit shipments, nor even Apple's figures. According to Gartner, Nokia has 45
percent smartphone marketshare in the United States. But the data makes sense perhaps looking
at AdMob's share on different handsets. This kind of persistent reporting makes iPhone appear
larger than what it really is. It's wonderful for Apple's Stock price.
Now for the other blog: I disagree with Silicon Alley Insider writer Dan Frommer's assertion that
"Microsoft must make more spps for the iPhone." That's a simply crazy idea from yet another
member of the iPhone-obsessed American Press. If you're living in one of two glass houses --
geekdom or the United States -- this kind of thinking makes sense (Sadly, many technology
bloggers or journalists live in both).
Microsoft's mobile strategy may be total disaster, but Apple's platform is no sure thing. Frommer
makes a short-sighted recommendation. That's OK, he gets plenty of other stuff right.
As for me, I expect many iPhone and Mac fanboys to call me out-and-out wrong. Feel free, that's
what comments are for. I look forward to the engaging debate.
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dedappermedia
Oct 8, 2009 - 11:41 PM
I'll have some of what you're smoking Joe! So Nokia has 45% of the smartphone market in the
U.S.? Really? The United States of Finland? I guess if you (and Gartner) define "smartphone" as
a mobile phone with a chip in it perhaps. But smartphones like the iPhone and Android OS
handsets are a different beast and Nokia doesn't have a dog in the fight here in the U.S. Which
carrier sells a subsidized Nokia touch-screen smartphone? Oh that would be none. Which sell an
unsubsidized one? None. Definitions matter.

Although there's plenty of misleading data (and misuse of good data) in this piece as well as
many that sing the iPhone's praises, the hard fact is companies like RIM and Apple have done
pretty well for themselves operating in the high-end Western markets. They rightly don't fear
Nokia and it's sad rejiggered relaunch of the Ovi store but rather Android. Remember, Joe, not
every company needs or wants to be the worldwide market leader. Being the premium market
leader in premium markets is good enough (and very profitable) for some.

I know you haters are just dying for Apple to collapse. It could happen. You're free to bet against
them. Enjoy!
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extremely well
Oct 9, 2009 - 2:31 AM
I don't hate Apple, but I still predict its collapse, since anyone with an IQ of approx 72 and above
can see it coming (AGAIN). And anyone with an IQ of approx 57 and above can see nothing
special in Apple already today to justify the buzz around it...

Apple's way of competing with rock-solid-ready-for-future-Win2000-core: build upon someone

else's work hehehehe UNIX. How lame...

It's in Apple's genes to shoot themselves in the head. They CANNOT change their modus
operandi which currently forces their users to jailbreak and jump through other hoops like dogs
in the circus. For what? To do stuff their "creator" deemed unholy? F-- that...

I've never met an extremely technical Mac user. They are all spoon-fed retardants who are
impressed by idiotic crap that third-party software does way better any day.
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Rafafanck
Oct 12, 2009 - 10:00 PM
you can say anything, apple will continue getting richer and better. And what ****s you is that
you know that.
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Rafafanck
Oct 8, 2009 - 5:41 PM
iphone is the best phone ever, how many models have been necessary for nokia to have 45%?
("Nokia's smartphone market share was 45 percent, while Apple's was only 13.3 percent.") and
how many apple? We can't forget that apple is new in the market, nokia is since the time of the
cell phones with the snake's game. And apple market is just getting bigger, just like me, i think
anyone have already had an iphone don't want anyone else, and i will buy a 32gb 3gs, the only
problem is that iphone is still to expensive here in Brasil, but, there is always a price, and
everything is too expensive here in Brasil(including nokia phones) and what nokia phone is
better? anyone of the big nseries(n95 etc..)i know, i prefer a small phone with 3mp, than a big
with 5mp.
Here in Brasil, everybody prefers the iphone, and anyone wants to have one.
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extremely well
Oct 9, 2009 - 2:11 AM
"And apple market is just getting bigger, just like me"

Hmmmm... You...fatty... I begin to wonder if Apple should start offering a free buffet with every
iPhone purchase... It could make the event ever so memorable.
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Rafafanck
Oct 12, 2009 - 9:57 PM
that's not what i mean. "just like me, i think anyone have already had an iphone don't want
anyone else"
sorry, i am from Brasil, i don't speak english very well.
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jermort
Oct 8, 2009 - 4:27 PM
iPhone better??? Better than what??? The Apple Geniuses just released another iphone s/w
update. Ver 3.2 is advertised to fix all the bugs introduced in 3.1. Damn, I'm sure glad I bought
one of these things! If only I could keep it running with out rebooting or restoring on a
daily/weekly basis. Worse than Windows 3.1!
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extremely well
Oct 6, 2009 - 6:16 AM edited
Ahhh God..how can you not see that Apple is doing what Apple has been doing, and their
competitors are doing what they'll continue to do. Even *if* Apple continues to make "better"
smartphones, they could never make them so much better to justify the price difference between
them and the competition. Apple competitors will copy 99% of the things people really love
about their iPhone and offer it for 50% less.

Apple must always spend much more on marketing to convince people that paying 50% more to
get just 5% more is the cool thing to do. Naturally, fewer and fewer people fall for that BS
hehehe
As can be seen with MacOS vs. Windows, slowly all of Apple's arguments against its
competitors disappear. In the early 90's it was "user interface", then after Win95 it was clearly
"stability", then with WinXP when interface was beautiful and stability rock solid, it was now
"security" (mass attack of the toolbars from hell), which was completely annihilated by Vista
(highly secure and includes AV mechanisms). Windows Vista core complaint was "senseless
security measures" (User Access Control madness). With Windows 7, Apple is almost
completely out of ammo. Now security comes together with comfortability... Apple can only
start showing irrelevant benefits such as better backup and other BS that has nothing to do with
an OS. Now, do you REALLY think MS cannot outspend Apple with their gay Time Machine
and gay AT&T Natural Voices Text-to-Speech licensing? You've got to be the most retarded
person in the world if you think MS cannot throw in everything AND the kitchen sink in future
OSs... Something that'll put Picasa, True Image, Babylon etc to shame... Any of these products
ain't worh more than a few dozen million bucks to completely clone within 6 months with MS
army of coders. WAKE THE F-- UP!

Apple will continue to be a bully and prevent users like ME, who MUST HAVE A QWERTY
KEYBOARD from integrating bluetooth keyboard to an iPhone, or some other new limitation,
cuz Apple wants some cash for those hardware "extras". Apple's control freakness will continue
to hurt users as the conflicts of interest between Apple's gaylords (AT&T) and other services
(Google Voice, Vonage, Skype) exhibit themselves. Apple's MOST PAINFUL weakness will be
revealed by a lame walking mobile OS that will ALWAYS be 20 steps behind Windows Mobile
technically and in ease-of-programming (Visual Studio style). Apple will never ever be able to
please developers like Microsoft can.

Apple is doomed for failure, again, and again. There is no way Apple survives ON ITS OWN the
next 10 years. I'll wager my left testicle on that. ;)
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yountmj
Oct 6, 2009 - 2:50 PM
I thought you had said 5 years previously... now it's 10? =)

At any rate, I agree. Well said.

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extremely well
Oct 7, 2009 - 5:28 AM
I said iPhone sales will totally tank within 5 years. The Apple bubble will burst soon after that, as
soon as the last remaining Apple soldier is killed -- the Mac desktop/laptop market... It'll still
take a few years for Apple to gasp for air..in vain. They'll die or lose autonomy (merged/bought
by someone) in max 10 years. No doubt about that.

Besides, when you make the stakes so high, you wanna be 100% sure you're gonna win
hehehehe ;)
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dedappermedia
Oct 8, 2009 - 11:44 PM
wow thou dost protest too much -- are you a top or bottom?
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extremely well
Oct 9, 2009 - 2:05 AM
In your case you know I'm gonna have to be a top.

BTW, have they found Osama in one of your folds yet?? hehehehe
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jnaina
Oct 2, 2009 - 2:42 AM
I have been using mobile phones since 1989, my first bring the Moto brick phone. Over the
years, I have owned over 25 different phones and about 12 different PDAs, including the palm
and newton. Every one of these devices had flawed interfaces, that prevented me from utilizing
the device fully. While I am a geek by nature, and had the time in the past to fsck around the
device to make them usable by customizing/hacking/configuring them, the turning point came
when I bought a HP WM based rw6828. This was HP's umpteenth smartphone, but the device
was utter crap. The phone would hang while talking, vpn/internet settings menus were redmond's
worst programming feat, the user interface with the damned stylus was a horror, updating the
firmware/rom was an exercise in playing russian roulette, apps were of mediocre quality and
prone to making your phone crash, multiple apps being run would slow down the phone to a
unusuable state...the list went on. Sure i could have trawled the net to look for patches and fixes,
to make it all work, but at some point in your life, you just want something that just works...it has
to pass the toaster test. Somewhere along the line, the mainstream/established phone makers
started getting more focused on marketing/carrier bundling/marketshare growth, instead of truly
addressing the concerns of the regular joe who wants a connected device that can be used as a
phone and internet device/game/mp3/small factor pc. Apple was the first company to really re-
examine the concept of the smart phone and truly cleaned up a lot of mess out there, and came
out with a phone that is simple to use, functional and extendable. They didn't just deliver a
phone, but a extensible platform. Sure the damn iphone doesn't have the latest bluetooth ADP2
this, and 100 megapixel that, or 1080p HD video with tivo built-in. But you know, most folks
who buy the iphone are not looking at the best specced phone out there. They are only looking
for the most usable smartphone, which just so happens to be an iphone.

Sure the iphone will not appeal to all and sell like another faceless cheap nokia candybar, but I
hardly see anyone writing a thesis stating that Lexus/porsche/maserati are all failures because
they didn't sell billions and that the afghan sheep shaver or the chinese chicken feather plucker
doesn't own one.
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joewilcox
Oct 2, 2009 - 11:30 AM
@jnaina You're right that you don't "hardly see anyone writing a thesis stating that
Lexus/porsche/maserati are all failures because they didn't sell billions and that the afghan sheep
shaver or the chinese chicken feather plucker doesn't own one." But you do, in America, see
people writing about iPhone like it will sell to everyone and is selling to everyone, which is so
far from the truth. That was the whole point of writing this post -- to put forth some facts about
iPhone's global presence.
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fatty
Oct 2, 2009 - 2:35 PM
Huh? that is funny, anyone who knows anything would tell you the iPhone is not for everyone;
not everyone needs a smart phone. That is an absurd statement. Tell us the real reason you wrote
this nonsense....set yourself free Joe....
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McDave
Oct 2, 2009 - 8:30 PM
I think the whole thesis above fails to acknowledge a few key points:

Firstly 4bn phone users worlwide? At first I started to agree, 6bn people on the planet, living in
an affluent western society 2/3rds of the people I know have 'em - no, wait, 2/3rds of the adults I
know have 'em (maybe more) but the global population stats include under 10s & over 65s. This
means less about half the people I know actually own a phone. 4bn phones has to be fiction, Joe,
you're not immune.

Secondly, regardless of population the wealth dynamic is vastly different. My wife comes from a
modest, South American country & no, they won't be affording iPhones. The US on the other
hand is probably the model of capitalism/materialism so of course the disposable wealth for
Apple gadgetry is going to be higher.

Thirdly, low-end consumer phones are just that - consumable, high-volume, sort life-span
products. In the same way Apple Notebooks/Desktops happily deliver a 5-year life-span the
proliferation of NetBooks is dropping the average PC life-span giving the false effect of
increased marketshare. Smartphones won't be changed every 6-months so of course the
marketshare (by volume of sales) will be lower & decreasing.
McD
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extremely well
Oct 1, 2009 - 11:59 PM
Once in ten years Apple comes up with some market hit and you ppl are creaming your pants.
Listen, with or without the iPhone, we would STILL have touch screens, maybe one finger only
for next X years, but we'd have the same nice interfaces.. We just didn't have the CPU power to
do it well, and Apple came in and did a few things "efficiently" by effectively KILLING the
most basic concept of QUALITY WORK which is multitasking. So they beat the market with
some clever idea. NO BIG DEAL.

They . will . lose . it . all. They CANNOT continue to innovate better than 200,000 just-as-smart
developers/designers/scientists around the world with just as many PHDs... Apple does not have
a monopoly on creativity. Apple actually sucks by solving one problem ("make the damn thing
sexy, man!") and creating another ("forget about multitasking and powerful IDE for devs -- just
get it to market fast, man!"). The iPhone OS is the lamest thing in the f'king world and will
FOREVER remain gay in comparison to Windows Mobile.

iPhone sales are gonna TANK BAD within 5 years, and the APPLE STOCK BUBBLE WILL
BURST, taking with it the entire company. Maybe Microsoft will keep them alive again for their
own benefit ("I? Monopoly? Noooo") and maybe Google will buy them out. Either way Apple
will lose its indepenence in a few short years BECAUSE THEY ARE A MYTH OF
GREATNESS AND ALL MARKETING LIES EVENTUALLY COLLAPSE LIKE A DECK
OF CARDS.

You will have to be the dumbest person in the world to buy a Mac in 5 years when by EVERY
MEASURE a Windows machine will be the better pick. You'd likewise have to be retarded to
get an iPhone compared to the better and cheaper (again) alternatives for future mobile OSs.

Don't tell me Apple are so damn unique and special. They ain't. They were about to die once and
they're gonna do it AGAIN. The only way they can survive is if they go out and say "we are so
damn special that we want you to spend $5,000 on a laptop that is only 5% better than a $700
laptop of our competitors, and you will pay because you have the cash you rich bas****". Now
*that*, is a rather unlikely scenario and we all know it hehehehehehe
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mrrt
Oct 2, 2009 - 1:10 AM
Hmm, do I detect a bit of teen angst leaking out there? ;-)

So the iPhone has no hope against the massed opposition of dozens of other companies?
I guess just like the iPod and the iTunes Store just couldn't compete against all those just-as-
smart PhDs behind the massed opposition of Microsoft, Sony, Creative, Dell, Toshiba,
Mitsubishi, Real, the "Plays For Sure" platform, the Zune, EMI, Universal etc etc etc... ... oh
wait...

-Mart
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joewilcox
Oct 2, 2009 - 11:39 AM
@mrrt

Mart, iPod was very different. Back in 2002 and 2003, I started asking in blog posts why no
other company marketed a music player. By the advertising -- and there was lots of it -- you
would have thought Apple made the only one. Marketing works, which is one reason Apple is
pumping so much into advertising App Store to promote iPhone.

Something else: Apple got the most important attribute right on Day 1: Synchronization. The
iPod/iTunes sync worked really well, even for all that DRM content. No other competitor did
sync nearly as well, and PlaysForSure sync was a complete mess.

iPhone's appeal isn't the device but the software and user experience. Sync was one kind of user
interface that worked well for iPod. Multitouch is another, and it works well for iPhone/iPod
touch. It makes people feel good about using iPhone, which is good product marketing.
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mrrt
Oct 2, 2009 - 8:07 PM
Okay so if marketing is the main reason for the iPod's success then by your own argument the
iPhone/App Store will be a shoe-in for the same dominance the iPod/iTunes music store enjoys
as iPhone advertising has well and truly carried on the same tradition.

Also by your own admission the iPhone enjoys spectacular levels of exposure in the press and
the public consciousness so again your argument is leading us to conclude the iPhone is destined
for the same success as the iPod. :-)

In point of fact, the App Store is accelerating far faster than the iTunes Music Store in terms of
sales and awareness - yet another engine for the iPhone growth story.

Synchronisation was the other reason? In that case check for the iPhone - it has the same
industry-leading synching of music, movies, TV shows, podcasts as the iPod (and of course add
Apps to that as well).

Then there is the iPod ecosystem with over 75% of cars coming with iPod integration and of
course the thousands of other peripherals such as dock-equipped sound systems, cases, etc etc
which all work with the iPhone.

As you say, multi-touch and the amazing iPhone GUI is another driver.

Basically Joe, everything you have said supports the thesis that the iPhone is on the same
trajectory as the iPod – is that not the case?

-Mart
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bousozoku
Oct 3, 2009 - 12:20 AM
$5000? The last time I saw a laptop computer costing that much, it came from IBM, not Apple.
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yountmj
Oct 6, 2009 - 3:02 PM
"iPhone's appeal isn't the device but the software and user experience."

For me, the appeal of the iPhone always has been the device. The hardware is what makes the
pleasant user experience possible in the first place through software. It's quite simply an elegant
and beautifully designed piece of hardware (not so much with their latest cheap looking and
feeling incarnation).

It's the limitations and restrictions placed on it by Apple and AT&T for over 2 years that have
been choking the device, and robbing consumers of the experience they truly deserve for that
amount of money. Unlocked iPhones show just exactly what that device is (and should have
always been) capable of doing since launch.

For the rest of Apple's products, I would agree with that statement though.
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mrrt
Oct 1, 2009 - 11:00 PM
Joe, one important issue you fail to mention is growth rates. The iPhone's smartphone
marketshare has grown 625% year-over-year while according to Gartner, Nokia's has decreased
from 47.4% in Q2 2008 to 45% in Q2 2009. You need to look where the market is heading to get
a real picture of how large an impact the iPhone has had and continues to have.
http://www.gartner.com/it/page.jsp?id=1126812

RIM took 10 years to hit 50 million Blackberry devices sold this year - Apple has sold 50 million
iPhone OS devices in only 2 and a bit years. RIM only has a current subscriber base of 30
million devices and most of those are older, low-res, non-touchscreen devices many of which not
only lack 3G but wifi as well.

Then there is Microsoft who has been well and truly knocked to the ground having dropped from
14.3% share of the smartphone market in Q2 2008 to 9% in Q2 2009
http://www.canalys.com/pr/2009/r2009081.htm

As far as profitshare is concerned, I got the figure wrong – it’s even larger! The WSJ reports
analysts at Deutsche Bank have estimated that despite only having 1% unit marketshare in 2008,
Apple captured 20% of the profitshare of the *entire* mobile phone market (with RIM capturing
15%). This year they estimate Apple and RIM combined will rake in a staggering 58% of total
operating profits over the entire mobile phone industry.
http://arstechnica.com/g...r-iphone-blackberry.ars

Joe, the 13.7% figure from Canalys does not include the iPod Touch. The 20% is a rough
extrapolation once the latter is added to the mix. It's not about just the phone anymore - it's about
the platform – the OS and the apps.

The 75% of developer-share figure should have been 74% and comes from the Mobile
Application Analytics firm Flurry which indicates that in terms of developers by platform the
iPhone went from 72% in March 2009 to 74% in June 2009: http://blog.flurry.com/?
month=7&year=2009

You highlight the Mac as an example of Apple failing to establish a market-leading dominance
but fail to acknowledge a much more recent example. The iPod/iTunes ecosystem where Apple
owns 70% or more marketshare of media players and music stores says you should never say
never. Will the iPhone/iPod touch capture the same overwhelming share of the
smartphone/pocket computer market? Who knows, but at its current growth rate and consumer
and developer mindshare I wouldn't want to bet against it particularly as Apple still has plenty of
countries (such as China) and carriers to expand into. The iPhone is in 70 countries, RIM and
Nokia are already saturated in ~300 countries.

With all these data points, it seems fairly evident that the hype around the iPhone OS is in large
part justified whether supporters of other platforms want to acknowledge it or not.

-Mart
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joewilcox
Oct 2, 2009 - 12:53 PM edited
@mrrt

Mart, see response to above about iPod/iTunes.

I checked the Flurry site and couldn't find the 74-percent figure. But I did find that all the data
was specifically about games and that the developer comparisons are to carriers stroes like
AT&T's. No disrespect, but by my reading you took the data out of context. I do believe that
gaming is the future of the iPod touch platform.

The Flurry data also shows that new developer starts are much higher for Android than for
iPhone/App Store. Quote: "Though iPhone still commands the majority of developer interest,
Android is beginning to close the gap in an undeniable way."
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mrrt
Oct 2, 2009 - 8:29 PM
The 74% of developers on the iPhone figure is shown in the pie chart three-quarters of the way
down the page which shows that as Developer interest in the iPhone grew from 72% to 74%, it
stayed the same on 22% for Android.

Some of the charts and text talk about games (which is not surprising as they are such an
important driver for consumer interest), but plenty of the data on that page talks about general
dev issues as well.

-Mart
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mrrt
Oct 2, 2009 - 8:32 PM edited
Joe, any comment you'd like to make on the huge growth rate of the iPhone vs other platforms or
the enormous profit-share of the iPhone vs everyone else? These are pretty important issues that
bear heavily against your arguments.

-Mart
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rauckr
Oct 5, 2009 - 10:05 AM
Android-based phones are likely to be successful because Google is another very creative
company. They are not to be taken lightly. However, Apple has an inherent advantage in this
competition because they design the hardware and software and can optimize both to create an
unmatched user experience. So far we have only seen early generation iPhone technology. Future
generations will leverage increasingly powerful hardware and more sophisticated software. The
product will increasingly be seen as the fusion of computer/telephone/video/audio devices. Steve
Jobs' vision of the mobile future has no peer.
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lnternetworld7
Oct 1, 2009 - 10:48 PM
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new feature of icrapone-MMS lol, what a crap
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Piot
Oct 1, 2009 - 10:16 PM
Joe you really just don't get it do you?

You spend so much time on explaining why Afghan goat herders and Chinese rice farmers won't
be buying iPhones that you miss out real, relevant facts concerning the sales and success of the
product.

You may have tried to look at the different needs of various regions but in the end your argument
simply comes down to numbers. Bigger numbers.

Samsung sells more phones. LG sells more phones. Nokia sells more phones.
Therefore iPhone is not successful.

The single biggest reason these companies sell so many more phones than Apple is they have
hundreds (that's hundreds) of different models. Is a product not successful because it only comes
in a couple of different flavours?

Another reason. The vast majority of phones sold by Apple's competitors are not designed to be
used with expensive data plans. Apple appears to be trying to build an ultra mobile computing
platform here... you know, just like Nokia, Microsoft, Rim and Google are trying to do. You can
quote your big numbers all day long, but a candybar camera phone is just not in the same league.

These 'platform' phones will get cheaper... so will the data plans. Goat Herders WILL be buying
them. It's the fastest growing segment of the market but you choose to diminish it's importance.
Did you not get Balmer's memo? One day all cell phones will be "smart".

Another reason. Apple has been selling iPhones outside the US for a little over a year. 14
months! For comparison Nokia has been in the business for over two decades. Nokia is the
global leader in cell phones. It has hundreds of different models, sells them in virtually every
country in the world (via nearly every carrier). Is it really such a shock that they have bigger
numbers than a rookie? Does the size of Nokia's mobile business, built up over 20 years
somehow prove that iPhone's success (in just a couple of years) is just a "marketing myth"?

Finally... in your last para you set up the inevitable strawman. If you don't agree with Joe then
you are just an Apple fanboy. Sigh!
I'm a fan of reasoned argument. A fan of recognising, and not ignoring, tech trends and
directions. A fan of putting facts (all the facts) into some kind of real world context.
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extremely well
Oct 2, 2009 - 12:16 AM edited
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hahahaha you are recognizing tech trends, huh? hehehehehehe
I AM THE ONE AND ONLY TRUE TECH PROPHET WHO HAS *NEVER* BEEN
WRONG. BOOKMARK THIS PAGE AND LET'S COME BACK HERE IN 5 YEARS TIME
ONCE THE APPLE BUBBLE HAS BURST, OKIE??

Apple sucks and they shall collapse. Windows 7 and Windows Mobile 8-9 will make everyone in
the world know who the true master is: Microsoft and Microsoft ONLY!

BTW, how many billions of dollars does Steve Jobs have to donate to reach just 1% of what Bill
Gates has donated so far? And another question, was Steve Jobs registered as an organ donor
after starting Apple or was he of the 2/3rd who decline? Inquiring minds would like to know...

MAY GOD CONTINUE TO BLESS MICROSOFT. AMEN.

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fatty
Oct 2, 2009 - 2:33 PM edited
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Joe has no logic. He just tries to add his fluff around the Microsoft talking points slide decks
their marketing droids send out. Some of the other paid shills out there do a much better job of
trying to disguise their anti-anything-apple/google, everything Microsoft does is
amazing/wonderful/fast/exciting/etc...

The facts are simple....Apple killed Microsoft in the mp3 market, and now Apple is killing
Microsoft in the smart phone market. Last quarter the iPhone outsold all Microsoft Winmo
devices put together.
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bousozoku
Oct 1, 2009 - 2:30 PM
Tell it like it is: Apple don't make throwaway phones and, other than Blackberry and Bang and
Olufsen, the rest do.

Nokia's N9x series probably doesn't sell any better than iPhone does, so that's not how Nokia has
a huge share of the market. They sell more throwaway phones than almost anyone else.
When smart phones come down to the US$50 level en masse, we'll see if Apple care to compete
and whether they sink, but until then, they're doing the same thing in phones that they do in
computers and it's working, regardless of whether they have, want, or need world dominance.
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Paulysworld
Oct 1, 2009 - 8:41 PM
um dude, the N95, yeah, well, this is old news:
"Nokia is Connecting People indeed. Today the Finnish giant has released their numbers from
the final quarter of what has been a phenomenal year. Most notably, Nokia has officially
obtained a 40% global market share as of Q4 which is quite an accomplishment. They shipped an
impressive 133.5 million handsets in Q4, bringing the 2007 total to 437.1 million. In terms of
smartphone sales, Q4 Nseries sales were up 48% compared to Q4 2006 whereas Eseries sales
ballooned with a 102% increase. As much exposure as the Nseries gets, it’s pretty remarkable
that the enterprise sales increase was more than double that of the Nseries. Granted there is
plenty more room for growth in Eseries sales; Nokia unloaded 2 million of them in Q4 2007
compared to 11 million Nseries devices"

But that's old news and I'm sure you already knew that.
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Daddy_Spank
Oct 1, 2009 - 2:22 PM
Joe, I just read your article and I you kindof surprised me with this one. In a good way! Thanks
for interesting perspective and facts, all put together with a good thesis. I am european and travel
a lot, also in the US, and I totally agree with what you are saying in this article about the
incredible hype going on in the US these days.

Glad you are trying to put things in perspective!

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mrrt
Oct 1, 2009 - 1:01 PM
Joe, you're comparing Apples and oranges.

Apple is not competing against the millions of dumbphones out there - in fact they're not even
solely aiming at the smartphone market - they are establishing the "Next Big Thing": The Mobile
Computer Platform.

When you compare the iPhone OS (which includes iPod Touches) vs the Blackberry OS and
Symbian etc, you find that Apple has 20% of the global market, beating RIM and second only to
Symbian in global mobile OS share. (figures from Canalys)

Add to that the fact that Apple has captured 75% of mobile developers, and 75% of the mobile
App market and you realise that the iPhone obsession is justified.

Heck, even if you do look at the global dumbphone market Apple has captured 15% of the
profitshare on only 2% of the unit marketshare. Which business would you rather be in?

This in fact is a VERY big deal. You're too focused on the dumbphone market.

-Mart
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joewilcox
Oct 1, 2009 - 2:56 PM edited
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@mrrt

Mart, that's not the Canalys data I see. For smartphones, iPhone OS share is 13.7 percent, behind
BlackBerry OS at 20.9 percent and Symbian OS at 50.3 percent, in Q2:
http://www.canalys.com/pr/2009/r2009081.htm

The market is much bigger than smartphones.

Where does that 75 percent figure come from? Based on what? And the profitshare figure, where
does that come from?

Apple created Macintosh to be the next-generation computing platform, too. It wasn't. I agree
that iPhone potentially is the next-generation computing platform. But positioning it as such
doesn't make it such. Apple has a long way yet to go.
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mrrt
Oct 1, 2009 - 11:05 PM
Joe see my post further up where I address the points in your reply and give links to the sources
of my data.

-Mart
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rauckr
Oct 5, 2009 - 10:18 AM
You have stated it well. Steve Jobs' vision is not to make a better mousetrap but to build a new
and different platform with unmatched capabilities. We are not looking at the finished product
but rather at a work in progress.
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KenSmith
Oct 1, 2009 - 12:19 PM
Joe Wilcox writes: "Many of my journalist peers are themselves obsessed about iPhone and App
Store. The number of blogs in any given week just dedicated to new App Store applications is
evidence enough. There is informational obsession with the device that defies reality."

Absolutely true. In fact, I started an iPhone blog four weeks ago -- two days after I bought an
iPhone 3GS. My reason for doing the blog was to learn how content is ported to the iPhone and
why more companies are not optimizing for the smaller screen. Plus, I'm retired, living in
Mexico and had nothing better to do.

I used WordPress for the publishing engine and found a plug-in by BraveNewCode that detects
the iPhone and then delivers an optimized page. The WordPress theme and the plug-in are both
free. In a few hours, the site was up and running on the web and the iPhone (also the Android,
but I haven't tested that yet). I tinkered a bit with the code, but mostly it's off-the-shelf. I'm a
former journalist and salesman, not a coder.

For content, I look for press releases, which I then edit and re-write -- cutting out the hyperbole
and superlatives. (Really now, have you ever heard a CEO say he was "thrilled" about anything?)

In searching for material for daily postings, I have been struck by the amount of trash-talking
about the iPhone. It's almost as though the detractors see the iPhone as some sort of threat to
their way of life.

The blog is not a serious long-term project, and I will likely drop it in a few weeks. But, even
though traffic is quite low, I have been struck that almost half of the visitors are from outside the
US, particularly India and also Scandinavian countries.

Take a look on the web and on your iPhone. Comments and suggestions are welcome.

http://iphonetoday.mobi
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mjm01010101
Oct 1, 2009 - 11:46 AM edited
http://macdailynews.com/...p/weblog/comments/22597/
"Apple iPhone takes record 40% share of worldwide smartphone OS market"
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fatty
Oct 1, 2009 - 11:56 AM
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Did you read the fine print?

""For those new to the report, the AdMob Mobile Metrics report is a reflection of the data
flowing through our network each month. The statistics do not represent handset sales or unique
devices in the market, rather they represent the relative mobile usage we see from the sites and
apps in our network. This means that devices with heavy mobile usage (like the iPhone) have
higher share than other devices."
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joewilcox
Oct 1, 2009 - 12:14 PM
If you read my post to the end, you'll see that the misquoted AdMob data prompted my writing
and to use real data from real analysts to provide real perspective.
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fatty
Oct 1, 2009 - 11:29 AM
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Is Apple selling iPhones like hotcakes? YES
Is the Apple App Store with over 65,000 apps and over two billion apps downloaded wildly
successful? YES
Is Apple making extremely large amounts of money off the iPhone + App Store? YES
Is Apple selling more Macs because of the iPhone halo effect? YES

By those measures I would say Apple has a huge global success on their hands, hardly a myth.
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joewilcox
Oct 1, 2009 - 11:55 AM
Are millions of people in each of the four countries representing 40 percent of the world's
population buying millions of iPhones? No.

Are people in most other African, Americas, Asian or European emerging markets buying
millions of iPhones? No.

Are millions of people in each of these same countries buying from the App Store. No, they don't
have iPhones.

There are plenty of companies with niche products that make "extremely large amounts of
money." For Apple the company, iPhone and App Store are successful. As measured on the
global scale, iPhone's success is more about branding and marketing than meaningful sales -- by
comparison.

Better carrier subsidies would help, but much more would a better device. I should have
mentioned that in the post. What? Are you going to carry around breakable glass-screen iPhone
in the mountainous regions of Afghanistan? Or a rugged Nokia handset? Use your noggin.
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fatty
Oct 1, 2009 - 2:05 PM
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I know you are just parroting the Microsoft talking points as Microsoft is using every trick in the
book to try to diminish the success Apple is having. Are MILLIONS worldwide buying the
iPhone? YES. Are dirt poor farmers on a mountainside in Afghanistan buying iPhones? probably
not. if they buy a cell phone, they are going to buy some cheapo phone which does what they
need it to do...make calls, not surf the web, play movies, play games, do work, send email, IM,
etc...

Face the facts...the iPhone is kicking butt and taking names right now. When people spend their
own money, they overwhelmingly choose the iPhone because it is the best phone out there right
now.
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Paulysworld
Oct 1, 2009 - 8:15 PM edited
Fatty, whatever dude. You sound like more of the isheep spewing forth the same rhetoric. And
yeah, they recently announced they have 85, 000 apps. Mind you there are over 130 Fart apps, so
how many of them are of actual use to anyone? And the top selling apps, the programmers have
said they "can't give up their day jobs" on the paltry funds they have received for their efforts.
Apple used to be an innovative company, but these days they are more like the big brother they
labeled IBM in January of 1984 during the Super Bowl in the very first MAC add. Look at how
they control everything they make, and they do make nice bricks, just saying is all.
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Paulysworld
Oct 1, 2009 - 8:16 PM
well put joewilcox, bang on the money!
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Paulysworld
Oct 1, 2009 - 8:20 PM
Fatty, best phone out there? Not by a country mile dude. Do yourself a favour and actually check
out the Nokia N900. the Palm Pre, and the HTC TP2. All exceptional and 100% customizable!
But hey, continue to buy into the isheep mentality and believe everything Steve Jobs tells you, or
you could always watch the brilliant Simpson's episode when Lisa gets a mypod.
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kb9mawjh
Oct 2, 2009 - 5:37 AM
I was actually looking forward to the TP2 but I might go for the LEO HD2 or if they ever release
a Tegra based one go for it. Then I can use it on any carrier I choose. (travel lots europe and usa)
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rodgerballard
Oct 1, 2009 - 11:22 AM
Well Joe, for the most part I'd have to agree. There's a few bits and pieces I don't totally agree
with but fairly on mark. It's fairly obvious the established market leaders are still kicking the
Apple smartphone markets butt all over the map. As someone below me pointed out the plans are
fairly spendy, the phones are also pretty expensive (I imagine those prices hurt even more in
emerging countries), and this carrier lock-in problem is a real deal buster for many (although in
Apple's defense, how would they handle it without the subsidization deals they get with these
contracts). I believe this could improve some over time in all 3 of those categories (price
reductions on plans, phones and perhaps more carriers offering the phones as these contracts
expire).

That being said I will say Apple has certainly put a serious boot up the cell markets butt here.
They got quite a few people interested more in smartphones that were not before. The obsession
with alot of other vendors to go the touch route tells me that was another winning aspect. I think
it's fairly clear the device itself is seen as a winner.

The carrier ( and man the carrier is a real pain =( ), pricing and relative heavy handed approval
process is another matter however. I guess time will tell if any of this changes or if this is their
undoing in this market.

Rather than figuring out when/if someone will build a phone (or in some people mind I am sure
some have already built it) that rivals the Apple ones, what I am alot more curious about is where
could we be going. What does the future hold?

HSDPA is coming, what could it mean? New features and services that we aren't even seeing yet.
Could we look forward to video calls as more a standard option on some future phones. Hulu on
the run? What, if anything will the various makers bring to the table over the next years.

You can disagree if you like, but I feel Apple got the stagnate ball rolling, if they can stay on the
ball is a matter of debate but they got it rolling again which is a good thing.
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rodgerballard
Oct 1, 2009 - 11:49 AM
Oh damn I agreed with Joe, -1 point for me. If your going to rate down, an explanation would be
awesome. =)
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joewilcox
Oct 1, 2009 - 12:06 PM
You're right that "Apple got the stagnate ball rolling," and to ask "if they can stay on the ball."
Apple didn't invent MP3 players, but came to dominate that market pretty much globally.
Apple's online music store got that stagnate market going -- and now iTunes store outsells major
CD dealers like Walmart.

But Apple also got the ball rolling with graphical user interfaces, but lost the market to
Microsoft. Mother of invention isn't always father of sales. The iPhone will never succeed
because of the device -- as cool as it may be. The phone's future -- and that of iPod touch and its
successors -- is tied to App Store. That's the rolling ball that either stops at the bottom of the hill
or flies to the top of the next one.

Of course, one won't succeed without the other. App Store is nothing without iPhone/iPod touch.
I'm convinced that Apple has a winning platform. I just don't yet see where Apple has a winning
strategy.
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rodgerballard
Oct 1, 2009 - 12:35 PM
It'll be fascinating to see how it all plays out. Just happy that it's got the blood pumping out there.
I have a similar view on the browser market, I am just glad things are moving out there. Nothing
is more boring than a stagnate market.
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scott@bn
Oct 1, 2009 - 12:59 PM
Apple definitely lost opportunity to dominate in the OS space, but so did everyone but MS. In
the long run, they've maintained higher margins, brand value and stock value than pretty much
any other PC maker. That strategy of pricing high and maintaining a premium brand has proven
to be very successful. I can't blame them for continuing that as they moved into the mobile phone
business. I don't think anyone predicted they'd be this successful, this fast.

In the long run, I hope Apple can stay on the cutting edge and maintain their premium brand.
They showed the world what was possible in a mobile platform, and everyone, everywhere will
benefit from it.

However, I don't think the iPhone or the MacOS will be the dominant mobile solution
worldwide. I hope that will be something open, but you should never count out MS.
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fatty
Oct 1, 2009 - 2:08 PM
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@scott@bn - well said
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bousozoku
Oct 1, 2009 - 2:42 PM
Well, Microsoft had no monopoly power in the mobile phone market and when they arrived after
Handspring's Treo series, they automatically had the number 2 spot as there was no one else.
Now, they have to provide excellence (or something close to that) and they don't know how to do
that, as they've spent their time on the mediocre.

Apple, on the other hand in the old days, cared more about satisfying themselves than the public.
When you're one of the first two companies to produce more than kit computers, you have to
write your own rules. They didn't have a market to follow--they had to create--and they messed
up more often than not. Keeping a basic computer (Apple II, Macintosh) at US$2499 for years
kept them small and isolated.

I believe that the company could target the low end of each market, perhaps by partnering with
other companies, but should Tiffany or Cartier or Apple enter the mass market? (I mention this
because Apple's Fifth Avenue NYC store sells more per square foot than Tiffany.) It's not their
place or their goal.
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rodgerballard
Oct 1, 2009 - 2:44 PM
I am more worried about an open carrier to start with. I can just see the carriers blocking "open"
network applications or crippling their abilities. If they haven't already, I could see them at some
future point lobbying that cell networks should be excluded from net neutrality laws.

As far as domination of mobile solution worldwide, I am thinking there's just too much
competition out there for any one platform to end up dominating anytime soon.
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yountmj
Oct 2, 2009 - 12:04 AM
Of course they had a market to follow... it was the one that Commodore created.

It saddens me how much the pioneers are forgotten, no matter how short-lived their success was.
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Viking369
Oct 1, 2009 - 9:34 AM edited
If a company sells the most phones by far but fails to make much money off them, does it really
matter that they sold all these phones...? http://www.google.com/fi...=NYSE:NOK&fstype=ii

And rather than just saying "yes, dumba**" - could you please enlighten me as to why, because
it's a genuine question.

Why would selling low-margin crap phones (which is the biggest slice of the emerging market -
that's why it's called emerging) be super important and critical, but netbooks are a menace!
However $5000 cars are a great idea... I'm seriously confused... :(
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fatty
Oct 1, 2009 - 11:30 AM
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It matters when you trying to cook up numbers which bash Apple
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joewilcox
Oct 1, 2009 - 12:47 PM edited
It's a good Q @Viking369.

1) Nokia is the established leader in most countries. The sales dynamics are different for a
company that already has experienced explosive growth and is reselling to people that already
purchased its products. Apple has many more potential customers than existing ones. It's on the
bottom side of explosive growth where Apple is selling. The same will apply to Google and
Android. But initial gains were less because distribution was tied to one device. But as more
Android phones come to market, so should the OS growth increase. Of course, the product has to
be good -- meaning people want to buy it -- for this to be true.

2) For several reasons -- carrier relationships being one of the most important -- Nokia has
limited distribution in the United States. Except for the E71x, Nokia's best phones are available
subsidized from carriers almost everywhere but here. The US population may be much smaller
than China or India, but there is much greater individual spending power here. BlackBerry
outsells iPhone. Perhaps Nokia could do as well with broader US distribution.

3) As an established manufacturer with huge marketshare and distribution, Nokia was more
vulnerable to the econolypse than Apple. Gartner reported that carriers and retailers reduced
handset orders during Q4 08 and Q1 09 to clear out inventory. As such, Nokia took a hit from
this sudden and unexpected decline in orders. Demand has picked up now that many carriers and
dealers have cleared out excess inventory. But order volumes are still low.

4) Just because a handset costs less doesn't make it cheap. On the contrary, Nokia succeeds for
selling fairly rugged low-cost handsets -- many of which are affordably available unlocked. That
allows people in countries like India the flexibility to switch carriers to contain costs or gain
better services. Where is the low-cost, unlocked iPhone sold?
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scott@bn
Oct 1, 2009 - 1:08 PM
MS did end up making a lot more money (and profits) selling PC related products than Apple. I
take Joe's point to be that Apple isn't in position to dominate the mobile market either.

I agree with you, however, that unit shipments are a fairly hollow number. We've learned from
PC's that there is a nice, but low margin, business, that will always be a race to the bottom for
price, in chasing volume. Nokia, Samsung and LG's phone business model will yield diminishing
returns, unless they can move up the value chain into software and services and/or premium
products. Apple has done both of those things.

The existing mobile phone companies have been trying to move upstream for years, but with
very limited success. Of course, they don't need to worry too much about Apple as they do about
open platforms that truly turn their devices into commodity hardware and allow wide,
competitive access to the market for creating new apps and services (communications and,
especially, financial).
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Balderstrom
Oct 1, 2009 - 4:13 PM
The advantage of volume shipments is twofold (or more?): The more you ship/produce, the more
$$ you make. The more you ship/produce, the cheaper each individual unit is to produce -- the
more $$ you make.

If you make $1 on every phone, and ship 1000 phones, thats not a very good business model.
If you ship 1,000,000 phones and in doing so reduce your cost by half (or more) your profit per
phone may of just jumped to $2-$5 per phone. Get into the billions... and you see the point?

The race to the bottom is not a problem for the most part, as your profit margin will continue to
increase, and if you have competitors and have to cut that margin - then you still have the same
margin and multi-fold more sales. Walmart is the master of this, the %3 profit margin and bulk
sales.
Score: -1
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Post Reply
Viking369
Oct 1, 2009 - 10:18 PM
Thank you all for the thoughtful replies - much appreciated. :)

Joe, thanks doubly for the detailed info - I understand points 1, 2 and 3 - although lambasting
Apple for screwing up Russia / India and excusing Nokia for screwing up the USA seems a
little... unbalanced.

Side question - with regards to BRIC - how big is the smartphone market in relation to the
overall market?

And why is making low-cost (== low margin..?) rugged handsets for the masses such a good
thing, but netbooks are a margin sucking menace-ey vortex of doom?
Score: 0
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Post Reply
joewilcox
Oct 2, 2009 - 1:14 PM
@Viking369 You're right that Nokia screwed up in US, but it's a complicated problem that has to
do in part with how carriers operate here compared to many other markets. Nokia encountered
similar problems in Japan and South Korea. Nokia has now pulled out of Japan.

As for BRIC, I'd need to do a little research for a complete answer. Meanwhile, contemplate this:
China's largest mobile carrier has about 500 million subscribers. Apple cut it's deal with No. 2,
which has about 140 million. Bharti Airtel, one of the carriers offering iPhone in India, has about
110 million subscribers. In the United States, for some comparison, Verizon has about 90 million
subscribers and AT&T about 80 million.

Netbooks suck margins from an existing market. As volumes go up, PC manufacturers actually
make less on them. However, netbooks do make sense as light-weight, full featured, connected
products offered subsidized by carriers like cell phones. Regarding those lower-cost phones, they
aren't necessarily lower margin, particularly when factoring in carrier subsidies. They're lower
function and even getting more capabilities per generation. I must point out that many of these
lower-cost handsets could do video and MMS when iPhone couldn't.
Score: -2
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Post Reply
Dmitry_
Oct 2, 2009 - 5:11 PM edited
Joe – I don’t think anybody has presented a back of the envelope number crunching analysis, so
let me respectfully present some details from the last reported quarter that you may not be aware
of:

NOKIA (http://phx.corporate-ir....D0tMXxUeXBlPTM=&t=1)

- Net income of $524 million Euros (p.10)

- Total phone sales of 371 million units (p.2)
- Net income per phone of 1.41 Euros (US$ 2.05)

APPLE (http://www.apple.com/pr/.../2009/07/21results.html)

You may not fully understand the accounting for the iPhone, but in brief, revenues and income
are recognized over a 2 year period, amortized daily. So for every dollar of iPhone
revenue/profit, only a maximum of 12.5 cents can be realized in a given quarter. However, Apple
details revenue and income on a non-GAAP basis as well, which informs the reader of what the
effect would have been if 100% of iPhone revenue/profit had been recognized upfront – this is
the real effect of the iPhone, and the cash is already in Apple’s books. All variable costs are
expensed at the time of sale (so 100% of iPhone SG&A is included).

- Apple’s non-GAAP revenue was $1.4 billion higher than GAAP revenue – even though this is
not 100% of true iPhone revenue (as up to 12.5% is in the GAAP number), for simplicity’s sake,
let’s assume it is 100%.

- Apple’s non-GAAP income was $710 million higher than GAAP income.

- 710 million / 1.4 billion = 51% - This is the iPhones NET profit margin (after taxes)!!!

- 5.2 million iPhones were sold. This works out to revenue of $269 and income of $137 per
iPhone sold.

Take a moment and consider this. For every iPhone that Apple sells, Nokia needs to sell 67
phones to generate the same profit. Apple's iPhone business is already generating nearly as much
net income (about US$50 million less) than Nokia overall, yet has a fraction of the market share.
How does this make Apple unsuccessful in your books? Yes, they don’t cater to the emerging
markets, but those markets aren’t profitable. If Apple presents their product as a premium
product in those markets, as affluence develops, more of those people will elect to purchase
Apple’s product.
The fact that Nokia’s market share is so high, but declining, and margins are dropping, while
Apple’s share is so low, and growing, with great profit margins, should support the notion that
Apple is actually succeeding greatly at this point, with a great growth trajectory being reasonably
forecasted.

Your thoughts are appreciated.

Score: 0
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Post Reply
Viking369
Oct 3, 2009 - 8:10 AM
Thanks Joe, I really appreciate your replies to my questions.
Score: -1
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Post Reply
mjm01010101
Oct 1, 2009 - 8:57 AM
The article doesn't take into account that Apple has only been on the phone market for two years.
Were any of these analysts predicting 11+% share in ~2 years of the phone market in the States,
let alone 70-country penetration? Nokia has been in it for decades. Extrapolate, perhaps?
Score: 1
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Post Reply
joewilcox
Oct 1, 2009 - 1:04 PM
The article says that Apple sold 30 million iPhones in two years and states US marketshare
overall and for smartphones.

The Qs to ask: What is a smartphone? How will smartphones be defined in the future? Apple's
growth puts it in position to eventually become market leader for smartphones.

High pricing applies to more than just the device; there is what carriers charge for data. For
example, under AT&T's Family Plan, a 3G-connected cell phone data plan is $10/month. For a
smartphone, AT&T charges $30. Carriers have incentive to define what is a smartphone, too.
The more handsets defined as smartphones, the more AT&T can charge for data per device.

A broadened definition would affect iPhone growth numbers. Apple's smartphone growth (509
percent in Q2, according to Gartner) is much, much higher than the broader handset market.
Score: -3
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Post Reply
Lars
Oct 1, 2009 - 8:48 AM edited
This article http://bit.ly/3sO0xy (Symbian Handset Shipments to Reach 180m by 2014, Despite
Increasing Popularity of Emerging OS Platforms, says Juniper Research)

and white paper http://bit.ly/w6yGO (Whitepaper: Open Source OS ~ The Future for Mobile?)

by www.juniperresearch.com may be valuable in the context of this article. It covers more

detailed figures related to various mobile platforms.
Score: -2
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Post Reply
gglockner
Oct 1, 2009 - 8:12 AM
The iPhone is relatively expensive. It either comes with an overpriced data plan or the phone is
unsubsidized. This is keeping the iPhone from being mainstream.

That said, I do think that the eventual future of phones will be the smartphone. Nowadays, every
"basic" phone includes a color screen, a camera and rudimentary Internet access. But a few years
ago, phones had none of these. I think we're in a period like the switch from DOS to Windows:
the next phone for many will be a "smart" phone.

Apple has always offered high-end equipment that comes at a price premium. They are profitable
with their niche market share for Mac computers, and they have never taken steps to bring its
price closer to the mass market. I wouldn't be surprised if they take the same strategy with the
iPhone: keeping it a niche product while Nokia, Samsung and Motorola have cheaper
alternatives.
Score: -3
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Post Reply
fatty
Oct 1, 2009 - 11:31 AM
Below viewing threshold. Show
Just curious...what are AT&T's other data plans priced at? And Verizons?
Score: -4
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Post Reply
philuk2000
Oct 1, 2009 - 7:21 AM
Who really cares?

People everyday are being easily influenced by marketing. I bet today someone or something
you saw influenced the very next thing you did. That's life and Apple "are playing the game"
better than most, but so are Microsoft, Sony and all other companies with the money to feed their
marketing machines.
Incidentally, this article influenced me to write this :-) we all care, even if we want to deny
someone or something made us do something we wouldn't ordinarily do.
Score: 0
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Post Reply
extremely well
Oct 1, 2009 - 5:12 AM edited
I'll say it again. AAPL stock is the next bubble. Get ready to say buhbye boobi...
Score: 0
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Post Reply
olirosee
Oct 1, 2009 - 4:43 AM
Why bother with market data when you can see the truth on TV and in the movies every day?
According to my own observations, over 80% of "good guys/gals" use Apple products (that
includes the entire cast of various CSI clones, depending on which season you watch) and most
of the "bad guys" use generic PCs. Since most of them are dead by the end of the episode/movie,
it should be clear to even the dullest couch potato that Apple products have a crushing
dominance in daily life everywhere (except Asia and Africa, and other countries not specifically
mentioned here which amount to over 50% of the World population and phone users).

I take a brief survey of my surroundings (a coffee shop) and see that 50% of the smoking
computer users use Apple, the other 50% use Sony (that's a girl over there and myself, in that
order). I can't see into the non-smoking section from here, where things may be different (but,
now we know that even Apple users do still smoke!).

I carry an iPhone with me, so that adds to the Apple share here but that girl over there is
probably using Samsung or LG, this coffee shop being in Korea and all...

The iPhone doesn't work here on account of being 2G only, but it still functions as an iPod
Touch and gaming platform - perfectly suited for my 45 minute train ride to work (and back
home).

The main reasons I bought the iPhone (in 2007, Thailand) were: (1) I want one! (2) It looks cool
(3) My girlfriend had one before me! (4) Touch screen! (5) I had a Nokia N80, HTC Touch,
Sony P950 and an older Siemens brick which could be used like real phones in case I wanted to
send MMS, have better control over synching with Outlook, use my own ringtones, use
Bluetooth the way it was designed to work, use Infrared, use USB standard cables, use normal
headphones, use 3G networks... so yes, as long as I carry at least one more real phone with me, I
love my iPhone!

Of course you can say: Apple did in 2 years what Nokia and others took over a decade to achieve
- only that Nokia and others finally did it some 5 years before Apple :-) But for the touch
screen... I would not buy any other touch phone that had anything less pleasing than Apple's,
regardless of the other functions!
But really, I love my iPhone! This article, too. What a shame that an author has to declare and
prove his/her allegiance and/or neutrality first before getting to the substance of the message.
Score: -2
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Post Reply
joewilcox
Oct 1, 2009 - 12:21 PM
LOL! You should write comedy. Or do you?
Score: -2
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Post Reply
yountmj
Oct 2, 2009 - 12:27 AM
"... so yes, as long as I carry at least one more real phone with me, I love my iPhone!"

Well, I found that particularly funny. =)

Score: 0
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Post Reply
DilatoMedia
Oct 1, 2009 - 4:26 AM
Joe,

great article, especially from an emerging/developing markets angle. Am sure the "fanbois" &
detractors will come flying in on this one, but I heartily agree with the premise of what you are
writing.
iPhone is a great handset, but it is not for everyone & will never be able to hit the required price
points to be successful as a mass market device, no matter how many they sell.
Strand Consult also came out with a very interesting white paper on iPhone & it's (non)
contribution to operator revenues.

Branding is not everything

Score: 0
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Post Reply
joewilcox
Oct 1, 2009 - 12:20 PM
I didn't see the report. Is it available online for free?
Score: -2
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Post Reply
Nelsonian
Oct 1, 2009 - 4:10 AM edited
Joe
You know what?
Your website name has even hit it on the head!
Many years ago in a land far away there was a battle.
It was between the forces of VHS and Beta.
Who won?
Who, based on the quality "user experience" part of the deal, who should have won?
Put simply - Apples marketing is brilliant.
After all what retailer would accept a product on their tech store floor-plan at 5-10% Nett GP?
See if Sony, Samsung, LG, HP or Toshiba would could get away/would put up with that!
Gee - - - what ever happened to Palm? I've had Palm for the last 3 years, yes I'll admit I've had 6
of them, 1 on account of it being caught in a car door, but the other 5, lets just say "evolution" -
but to this day I still absolutely love them. Dave the Nelsonian (just google Nelsonian)
Score: -3
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Post Reply
benjimen
Oct 1, 2009 - 3:47 AM
I don't necessarily think you're wrong. I just hope they're selling enough iPhones to stay in
business for a long time :)

I've previously used WM devices, since the days of Windows CE when HP clamshell
monochrome devices were geewhiz. Enjoyed it until the 3GS came out -- more and more my
WM devices felt extremely antiquated. I made the switch -- glad I waited and very glad I
switched. Gone is that feeling of hoping something more technologically relevant would come
out...

Keep on analyzing sales figures and advertising strategies, I'll just enjoy my iPhone ;)
Score: 0
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Post Reply
joewilcox
Oct 1, 2009 - 12:18 PM
For Apple, iPhone and App Store are hugely successful. Apple makes lots of money from iPhone
and App Store and would continue to do so even if marginalized. Mac marketshare is well below
10 percent in the United States, yet the computers are a profitable line of business. So, please,
enjoy your iPhone. Just don't expect that because of the hype here, everyone else in the world is
buying one.
Score: -2
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Post Reply
Balderstrom
Oct 1, 2009 - 1:22 AM
I've used a fairly basic Samsung phone in recent years, but used to love Motorola. Is Motorola's
worldwide presence so poor that they don't even get a couple percent in any market?
Score: 0
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Post Reply
joewilcox
Oct 1, 2009 - 1:28 AM
It's 5.6 percent in Q2 according to Gartner. That makes Moto a declining #4.
Score: -2
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Post Reply
scott@bn
Oct 1, 2009 - 1:14 PM
I think just about everyone had a Moto that they loved at one point. The past tense is the sad bit.
They really squandered a strong market position and huge brand value.
Score: 2
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Post Reply
Dmitry_
Oct 2, 2009 - 5:11 PM edited
Joe – I don’t think anybody has presented a back of the envelope number crunching analysis, so
let me respectfully present some details from the last reported quarter that you may not be aware
of:

NOKIA (http://phx.corporate-ir....D0tMXxUeXBlPTM=&t=1)

- Net income of $524 million Euros (p.10)

- Total phone sales of 371 million units (p.2)
- Net income per phone of 1.41 Euros (US$ 2.05)

APPLE (http://www.apple.com/pr/.../2009/07/21results.html)

You may not fully understand the accounting for the iPhone, but in brief, revenues and income
are recognized over a 2 year period, amortized daily. So for every dollar of iPhone
revenue/profit, only a maximum of 12.5 cents can be realized in a given quarter. However, Apple
details revenue and income on a non-GAAP basis as well, which informs the reader of what the
effect would have been if 100% of iPhone revenue/profit had been recognized upfront – this is
the real effect of the iPhone, and the cash is already in Apple’s books. All variable costs are
expensed at the time of sale (so 100% of iPhone SG&A is included).

- Apple’s non-GAAP revenue was $1.4 billion higher than GAAP revenue – even though this is
not 100% of true iPhone revenue (as up to 12.5% is in the GAAP number), for simplicity’s sake,
let’s assume it is 100%.

- Apple’s non-GAAP income was $710 million higher than GAAP income.

- 710 million / 1.4 billion = 51% - This is the iPhones NET profit margin (after taxes)!!!
- 5.2 million iPhones were sold. This works out to revenue of $269 and income of $137 per
iPhone sold.

Take a moment and consider this. For every iPhone that Apple sells, Nokia needs to sell 67
phones to generate the same profit. Apple's iPhone business is already generating nearly as much
net income (about US$50 million less) than Nokia overall, yet has a fraction of the market share.
How does this make Apple unsuccessful in your books? Yes, they don’t cater to the emerging
markets, but those markets aren’t profitable. If Apple presents their product as a premium
product in those markets, as affluence develops, more of those people will elect to purchase
Apple’s product.

The fact that Nokia’s market share is so high, but declining, and margins are dropping, while
Apple’s share is so low, and growing, with great profit margins, should support the notion that
Apple is actually succeeding greatly at this point, with a great growth trajectory being reasonably
forecasted.

Your thoughts are appreciated.

Score: 0
|
Post Reply

'Dog Wars' dog fighting app for Android: Here is what

people are upset about
Controversy has been roused over an Android game based on the sport of illegal dogfighting,
here is what the game actually contains.

5 more things you need to know about Microsoft and Nokia

Windows Phones
Microsoft Thursday gave a little more insight into its multi-billion dollar partnership with Nokia
for Windows Phones.

Windows 7 speeds up in 2011, 350 million licenses sold

After a year and a half on the market, more than 350 million Windows 7 licenses have been sold,
and Microsoft on Friday has claimed Windows 7 to be the "fastest selling Operating System in
history."
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bomb, or will it just bomb?
To avoid a brain drain and make up for moribund stock, Microsoft will give employees more
cash incentives and simplify performance evaluations. Too bad Microsofties will wait until
September to receive the benefits..

Edison Group, Comparative Management Costs Study:

Oracle Database 11g vs. Microsoft SQL Server 2008
In this whitepaper presented by the Edison Group, reveals how Oracle Database widens the
manageab...

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Oracle Real User Experience Insight (RUEI) is designed for measuring, analyzing, improving
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Oracle's Sun systems based on the Intel Xeon processor 5500 series provide that platform,
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Realize the Full Potential of Virtualized Java Applications:

Oracle WebLogic Suite Virtualization...
Increased operating costs, inefficient hardware utilization and rapidly expanding data centers
ha...
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Aiming to give Facebookers a more private method of sharing content they find across the web,
the social networking site on Monday introduced the 'Send' button.

Sony needs to answer why PlayStation Network is still down,

and when it will be back up
The 5-day PSN outage is sorely trying 70 million subscribers' nerves. Sony needs to break its
silence. Otherwise, that 70 million could shrink fast -- right into the welcoming arms of
Microsoft, Xbox and Xbox Live.

Sony: Can't say if PSN hack put personal info at risk

With the PlayStation Network outage now in its fifth day, concerns have begun to mount that the
hack that took the online gaming network offline may have involved some type of data loss.

Can Nook Color be a decent Android tablet without being

rooted?
Barnes and Noble has pushed out a Nook Color update that strives to turn the Android e-reader
into more of a tablet.
The Crimes of the Chinese, Foxconn, Steve Jobs and
ourselves
Who creates oppressive labor conditions? The employers? The government? The consumers? Is
your iPhone the reason some poor Chinese teenager is brutally-treated? Mike Daisey's got a
point, but it's not exactly what he thinks. And all this is assuming he's telling the truth.

Tip: Debug Windows like a pro

DebugView is a free and useful utility for troubleshooting misbehaving applications.

Advance SystemCare 4 launches, adds new features

The program comprises a number of system maintenance, cleaning, repair and optimization
modules, and version 4 introduces a number of new components, including Disk Scan and
Vulnerability Fix, plus a redesigned interface.
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History of the iPhone

From Wikipedia, the free encyclopedia
Jump to: navigation, search

The Newton MessagePad was an early handheld device manufactured by Apple in the mid-
1990s. Some of its concepts and functions have been incorporated into the iPhone.
The history of the iPhone line of phones began with Steve Jobs' direction that Apple Inc.
engineers investigate touch-screens. At the time he had been considering having Apple work on
tablet PCs, which later came to fruition with the iPad.[1][2][3][4] Many have noted the device's
similarities to Apple's previous touch-screen portable device, the Newton MessagePad.[5][6][7][8]
Like the Newton, the iPhone is nearly all screen. Its form factor is credited to Apple's head of
design, Jonathan Ive.[3][9]

Contents
[hide]
• 1 Origins
• 2 Advertising
• 3 Domain name
• 4 U.S. release
○ 4.1 Outsized bills
○ 4.2 Price drop outcry
○ 4.3 iPhone 3G pricing model changes
• 5 European release
• 6 Australian release
• 7 New Zealand release
• 8 Canadian release
• 9 Non-exclusive deals
○ 9.1 Verizon Wireless
• 10 World timeline
• 11 Activation and SIM lock bypassing
• 12 See also
• 13 References
[edit] Origins
In April 2003 at the "D: All Things Digital" executive conference, Jobs expressed his belief that
tablet PCs and traditional PDAs were not good choices as high-demand markets for Apple to
enter, despite many requests made to him that Apple create another PDA. He did believe that cell
phones were going to become important devices for portable information access, and that what
cell phones needed to have was excellent synchronization software. At the time, instead of
focusing on a follow-up to their Newton PDA, Jobs had Apple put its energies into the iPod, and
the iTunes software (which can be used to synchronize content with iPod devices), released
January 2001.[10][11][12][13] On September 7, 2005, Apple and Motorola released the ROKR E1, the
first mobile phone to use iTunes. Jobs was unhappy with the ROKR, feeling that having to
compromise with a non-Apple designer (Motorola) prevented Apple from designing the phone
they wanted to make.[14] In September 2006, Apple discontinued support for the ROKR and
released a version of iTunes that included references to an as-yet unknown mobile phone that
could display pictures and video.[15] On January 9, 2007, Jobs announced the iPhone at the
Macworld convention, receiving substantial media attention,[16] and on June 11, 2007 announced
at the Apple's Worldwide Developers Conference that the iPhone would support third-party
applications using the Safari engine on the device. Third-parties would create the Web 2.0
applications and users would access them via the internet.[17] Such applications appeared even
before the release of the iPhone; the first being "OneTrip", a program meant to keep track of the
user's shopping list.[18] On June 29, 2007, Apple released version 7.3 of iTunes to coincide with
the release of the iPhone.[19] This release contains support for iPhone service activation and
syncing.
According to The Wall Street Journal, the iPhone is manufactured on contract in the Shenzhen
factory of the Taiwanese company Hon Hai.[20]
[edit] Advertising
See also: iPod advertising
The first advertisement for iPhone, titled "Hello," aired during the 79th Academy Awards on
February 25, 2007 on ABC. The ad features clips from several notable films and television
shows over the last seventy years, showing iconic characters answering telephones and saying
"hello" or a similar greeting. The iPhone is shown at the end with the caption "Hello. Coming in
June."
The commercial was created by TBWA\Chiat\Day, Apple's ad agency since CEO Steve Jobs'
return to the company in 1998. TBWA's Media Arts Lab will continue to handle all upcoming
advertising for iPhone, much as it has for iPod.[21]
On June 3, 2007, Apple released four advertisements announcing a June 29, 2007 release date.[22]
A fifth ad featuring YouTube was released on June 21, 2007. All five advertisements feature a
voice over describing various iPhone features, demonstrated on-screen. The song "Perfect
Timing (This Morning)" by Orba Squara plays in the background.[citation needed]
The first publicly released iPhone 3G ad was first shown at WWDC 2008.[23] Since then, iPhone
3G ads have been similar to those of the original iPhone; however, the background is white and
the music used is "You, Me, and the Bourgeoisie" by The Submarines and can be viewed on
Apple's website.[citation needed]
One iPhone television advertisement was banned in the UK after the Advertising Standards
Authority decided that the ad made false claims about the device's ability to access websites, and
did not mention limitations in doing so.[24]
In April 2009, iPhone commercials started to showcase applications as part of its "There's an app
for that" campaign.
[edit] Domain name
On July 1, 2007, it was reported that Apple paid at least US$1 million to Michael Kovatch for
the transfer of the iphone.com domain name. Kovatch registered the domain in 1995.[25] That
URL now redirects to Apple's iPhone page.
[edit] U.S. release

People waiting to buy the iPhone upon release in New York City, June 29, 2007
On June 28, 2007, during an address to Apple employees, Steve Jobs announced that all full-time
Apple employees and those part-time employees that have been with the company at least one
year would receive a free iPhone. Employees received their phones in July after the initial
demand subsided.[26]
Initially priced at US$599 and US$499 for the 8 GB and 4 GB models, the iPhone went on sale
on June 29, 2007. Apple closed its stores at 2:00 PM local time to prepare for the 6:00 PM
iPhone launch, while hundreds of customers lined up at stores nationwide.[27]
Currently, in the U.S. and some other countries it can only be acquired with a credit card
precluding a completely anonymous purchase.[28][29][30] There is no way to opt out of the data plan.
The iPhone at first could not be added to an AT&T Business account, and any existing business
account discounts cannot be applied to an iPhone AT&T account, which AT&T changed in late
January 2008.[31]
The Associated Press also reported that some users were unable to activate their phones because,
according to AT&T, "high volume of activation requests were taxing the company's computer
servers."[32]
Early estimates by technology analysts estimated sales of between 250,000 to 700,000 units in
the first weekend alone, with strong sales continuing after the initial weekend.[33][34] As part of
their quarterly earnings announcement, AT&T reported that 146,000 iPhones were activated in
the first weekend. Though this figure does not include units that were purchased for resale on
eBay or otherwise not activated until after the opening weekend, it is still less than most initial
estimates.[35] It is also estimated that 95% of the units sold are the 8 GB model.[36]
On January 11, 2011, Verizon announced during a media event that it had reached an agreement
with Apple and would begin selling a CDMA iPhone 4. The Verizon iPhone went on sale on
February 10, 2011.[37][38][39] By contrast, T-Mobile USA's inability to provide the iPhone to
customers raised its subscription churn rate, put the unit in an "unsustainable position", and
contributed to parent Deutsche Telekom's decision to sell it to AT&T in March 2011.[40]
[edit] Outsized bills
Main article: 300-page iPhone bill
Stories of unexpected billing issues began to circulate in blogs and the technical press a little
more than a month after the iPhone's heavily advertised and anticipated release.[41] The 300-page
iPhone bill in a box received by Justine Ezarik on Saturday, August 11, 2007[42][43] became the
subject of her viral video, posted by the following Monday, which quickly became an Internet
meme.[44][45] This video clip brought the voluminous bills to the attention of the mass media. Ten
days later, after the video had been viewed more than 3 million times on the Internet,[46] and had
received international news coverage, AT&T sent iPhone users a text message outlining changes
in its billing practices.[47]
[edit] Price drop outcry
On September 5, 2007, the 4 GB model was discontinued, and the 8 GB model price was cut by
a third.[48] Those who had purchased an iPhone in the 14-day period before the September 5,
2007 announcement were eligible for a US$200 "price protection" rebate from Apple or AT&T.
However, it was widely reported that some who bought between the June 29, 2007 launch and
the August 22, 2007 price protection kick-in date complained that this was a larger-than-normal
price drop for such a relatively short period and accused Apple of unfair pricing.[49][50]
In response to customer complaints, on September 6, 2007, Apple CEO Steve Jobs wrote in an
open letter to iPhone customers that everyone who purchased an iPhone at the higher price "and
who is not receiving a rebate or other consideration", would receive a US$100 credit to be
redeemed towards the purchase of any product sold in Apple's retail or online stores.[51]
[edit] iPhone 3G pricing model changes
With the July 11, 2008 release of the iPhone 3G, Apple and AT&T changed the U.S. pricing
model from the previous generation. Following the de facto model for mobile phone service in
the United States, AT&T will subsidize a sizable portion of the upfront cost for the iPhone 3G
followed by charging moderately higher monthly fees over a minimum two year contract.[52]
[edit] European release
This section is in a list format that may be better presented using prose. You can help
by converting this section to prose, if appropriate. Editing help is available. (June 2008)

On November 9, 2007, iPhone was officially launched in Europe in the United Kingdom and
Germany. In the UK, sales are going through the UK O2 unit of Telefónica, while in Germany, it
is offered through Deutsche Telekom’s T-Mobile division. Similar to the previous launch in U.S.
customers lined up as much as a day in advance to get hold of the much anticipated phone.
However, the initial operating model locking iPhone owners to one selected carrier have been
controversial in Europe. In Germany, a competing operator, Vodafone, brought the case for court
claiming that the arrangement was against German law. On November 20, 2007, an interim court
order resulted in the locked iPhone sales in Germany to be temporarily stopped.
It is currently unclear how this situation will continue to develop in Europe. The iPhone launch
in France a few weeks later through the operator Orange, facing the same legal issues. Other
countries that will pose the same problems for the locked iPhone business model include
Belgium, Italy, Finland, and Brazil.
On December 1, 2007, Tušmobil, Slovenian mobile operator, started selling "unlocked" iPhones
without an official contract with Apple. The offer caused a lot of confusion with Apple Europe,
local media, and local Apple representatives.[53]
On May 6, 2008, Telecom Italia announced that it has signed a deal with Apple to sell the iPhone
in Italy[54] within the end of 2008. It will probably be the second generation iPhone with 3G-
UMTS capability.
On May 27, 2008, TeliaSonera released a press release stating that it will start selling the iPhone
in Sweden, Norway, Denmark, Finland, Estonia, Lithuania, and Latvia during 2008.[55]
On June 4, 2008, Movistar announced that it has signed a deal with Apple to sell the iPhone in
Spain[56] on July 11, 2008.
On August 22, 2008, EMT, Estonian mobile operator, started selling iPhones.[57]
On August 22, 2008, Vodafone Greece, released iPhones in the Greek market.[58]
On September 26, 2008, Omnitel released iPhones in the Lithuania.[59]
On November 7, 2008, T-Mobile released iPhones in Croatia.[60]
On September 30, 2010 Elisa released iPhone 4 in Finland.[61]
[edit] Australian release
The iPhone 4 is available unlocked from the Apple Store for $859.00 (16GB) and $999 (32GB),
[62]
as well as on contract from Optus, Telstra, Vodafone, Three and Virgin Mobile (all the major
carriers).[63] It is considered against the Australian Trade Pratices Act to grant exclusive rights to
a single carrier as was the case in the USA with AT&T having exclusive rights to sell the iPhone
in North America for some time.[64]
[edit] New Zealand release
The very first iPhone 3G model released on July 11, 2008 was sold in Auckland, New Zealand to
22 year old student Jonny Gladwell at 12:01am NZST.[65] The iPhone is available to customers
on the Vodafone network. There was much criticism from New Zealand customers when
Vodafone announced their pricing for the iPhone. The first generation of iPhones has been
available for sale in New Zealand through parallel import stores since the phones originally went
on sale in the US, the original 2G models available for sale in New Zealand have been unlocked
for use on the Vodafone network and can be used with any plan including pre-paid plans.[66]
It is likely that in the near future rival phone network Telecom New Zealand will sell iPhones to
be used on the Telecom XT Network.[67]
[edit] Canadian release
After months of high anticipation, the first iPhone to be released in Canada was the iPhone 3G.
Rogers Wireless began offering 8 GB and 16 GB models on July 11, 2008. Faced a public
backlash,[68] Rogers dropped the price of its service plan from CA$100 to CA$30 per month.[69]
The iPhone 3GS with the new iPhone 3.0 operating system was released in Canada by Rogers
Wireless on June 19, 2009. Users who signs up for a 3 years agreement with a data optioncould
choose between a 16 GB device for CA$199 and a 32 GB device for CA$299.[70]
Bell and Telus Mobility announced their release of the iPhone on the 4th and 5 November 2009,
respectively
[edit] Non-exclusive deals
On May 6, 2008, Vodafone announced that they signed a deal with Apple to sell the iPhone in
Australia, Czech Republic, Egypt, Greece, Italy, India, Portugal, New Zealand, South Africa, and
Turkey.[71]
Subsequent announcements confirmed that Apple is moving away from exclusive one-carrier
deals. Soon after Vodafone's announcement, TIM announced it would also be selling the iPhone
in Italy, on May 12, 2008 Optus[72] confirmed it would sell it in Australia and SingTel confirmed
that it would be selling the iPhone in India through its Indian Joint Venture, Airtel.[73]
On June 4, 2008, SoftBank Mobile released a press release stating that it will start selling the
iPhone in Japan during 2008.[74]
Russia's second largest mobile operator Beeline announced on August 28, 2008 that they signed
a contract with Apple to enter Russian market by the late 2008. This deal is rumoured to be non-
exclusive according to the unofficial statements made by some officials in two remaining mobile
operators that belong to so-called Russia's Big Three – MTS and MegaFon - to enter iPhone 3G
on Russian market simultaneously with Beeline.[75] As it was predicted, MegaFon issued the
press release about the same deal on September 2, 2008.[76] MTS, the largest mobile network of
Russia and CIS still hasn't released any statement.[citation needed]
On November 14, 2008, Vodafone Egypt and Mobinil started selling the iPhone 3G in Egypt.
This comes after Vodafone's deal with Apple Inc. earlier in May. The iPhone 3G is priced at
EG£3,800 and EG£4,600 for the 8 GB and 16 GB models respectively. Customers must also sign
up for one of 3 service plans to accompany the phone.
On September 28, 2009, Orange UK announced that they were to become the second operator of
the iPhone in the UK, ending an exclusive deal O2 had done since 2007. Orange later announced
that the iPhone will be released on November 10, with pricing plans starting from £29.36 on
contract and £440 for the 3GS 16GB on pay as you go.[77][78] On the following day, Vodafone UK
also announced that they will be selling the iPhone by early 2010, becoming the third UK
network and Vodafone's 11th country to offer the iPhone.[79]
[edit] Verizon Wireless
There has been ongoing speculation in the United States that Apple may offer a CDMA-
compatible iPhone for Verizon Wireless.[80] This speculation increased on October 6, 2010, when
The Wall Street Journal reported that Apple would begin producing a CDMA-compatible
iPhone, with such a model going on sale in early 2011.[81] However, this does not necessarily
indicate that Verizon would be selling the iPhone in 2011, as several foreign countries,
particularly China, also use CDMA networks.[82] With the iPad having a data plan offered
exclusively through AT&T, an iPhone offered by Verizon Wireless (which is partially owned by
Vodafone, which offers the iPhone overseas) still might not happen until at least 2012, when
both Verizon Wireless and AT&T will begin installing the 4G LTE network, which will be the
universal global standard for mobile phone carriers.[83] Speculation has further increased by the
addition of the iPad and data packages for the device on Verizons networks.
On January 8, 2011, the Wall Street Journal confirmed that Verizon Wireless would officially
announce on January 11, 2011 the launch of a CDMA-based iPhone for use on their network.[84]
The date in which the Verizon iPhone will go on sale is unknown, though the two most recent
iPhone releases were made available within weeks of their launch announcement. Verizon
confirmed the announcement on January 11, with an on-sale date of February 10.[85]
On January 11, 2011, Verizon announced that they would be carrying a CDMA version of
Apple's iPhone 4 starting in February 2011. Existing Verizon Wireless customers will be able to
pre-order the iPhone on February 3 and everyone else will be able to order it on February 10.
Pricing for the iPhone 4 is $199 for 16GB and $299 for 32GB.[86]
[edit] World timeline
The international release of the iPhone has been staggered over several months. Today, the
iPhone is available in most countries.[87]
Date Countries Carrier
June
United States (1) AT&T, Verizon
2007
November United Kingdom† Germany France‡ O2, 3, T-Mobile, Orange, Vodafone,
2007 (4) Tesco Mobile§
March
Austria† Ireland (6) T-Mobile, O2, Orange
2008

Australia† Austria† Belgium‡

3, movistar, SingTel Optus, Orange
Canada† Denmark Finland Hong (Mobistar, One, Optimus), Rogers
Communications (Fido Solutions,[88]
July Kong †‡ Italy†‡ Japan Mexico Rogers Wireless), SoftBank,
2008
Swisscom, América Móvil (Telcel),
Netherlands New Zealand Norway†‡ TIM, TeliaSonera (NetCom), Telstra,
T-Mobile, Vodafone
Portugal† Spain Sweden
Switzerland† (23)

Argentina† Chile† Colombia†

Czech Republic†‡ Ecuador† El
Salvador† Estonia Greece†‡ 3, América Móvil (Claro, Comcel,
Porta), Era, movistar, O2, Orange,
August Guatemala† Honduras Hungary SingTel Bharti Airtel, Globe,
2008
SingTel, Swisscom, TeliaSonera
India† Liechtenstein† Macau (EMT), T-Mobile, Vodafone, Telenor
Paraguay Peru† Philippines Poland†
Romania Singapore Slovakia†
Uruguay† (45)
September TIM, América Móvil (Claro),
2008 Brazil†‡ Latvia Lithuania South TeliaSonera (LMT, Omnitel), Turkcell,
 Africa Turkey† (50) Vivo, Vodafone (Vodacom), Oi
October
Luxembourg† Russia† (52) Beeline, MegaFon, MTS
2008
November
Croatia Egypt† (54) T-Mobile, Vodafone, Mobinil
2008

Botswana Cameroon Central

African Republic Dominican Republic†
Guinea Ivory Coast Jamaica Jordan

Later Kenya Madagascar Mali Malta América Móvil (Claro, MiPhone),

Chunghwa Telecom, movistar,
2008
Mauritius Moldova Nicaragua† Orange, Vodafone

Niger Panama Réunion Taiwan†

Qatar Senegal United States Virgin
Islands Venezuela (79)
January
Thailand (80) True Move
2009
February
2009 Saudi Arabia United Arab Emirates (82) Mobily, Etisalat, du

March Bulgaria Republic of Macedonia GLOBUL, T-Mobile, Telkomsel,

2009 Maxis
Indonesia† Malaysia (86)
October
China†[89] (87) China Unicom
2009
November
South Korea [90] (88) KT
2009
December Guam[91] Qatar Uganda GTA Teleguam, Vodafone, Orange,
2009 Israel(92) Pelephone, Cellcom
March Viettel Mobile, MobiFone,
2010 Vietnam [92] Armenia (94) [93] VinaPhone, Orange
September
Tunisia [94] Orange
2010
† iPhone offered by multiple carriers under contract from Apple (country not carrier-exclusive)
‡ iPhone offered without contract and without carrier lock
§MVNO with O2

[edit] Activation and SIM lock bypassing

Main article: Jailbreak (iPhone)
 This section is in a list format that may be better presented using prose. You can help
by converting this section to prose, if appropriate. Editing help is available. (June 2008)

This section's factual accuracy may be compromised because of out-of-date

information. Please help improve the article by updating it. There may be additional
information on the talk page. (September 2010)

People outside an AT&T store offering to unlock iPhones for free.

The iPhone normally prevents access to its media player and web features unless it has also been
activated as a phone through AT&T or O2. On July 3, 2007, Jon Lech Johansen reported on his
blog that he had successfully bypassed this requirement and unlocked the iPhone's other features
with jailbreaking. He published the software and offsets for others to use.[95]
On August 14, 2007, Gizmodo reported verification of a method to bypass the iPhone's SIM
lock, allowing the phone to work freely with carriers other than AT&T. This method requires a
Turbo SIM card costing approximately US$80 and essentially tricks the iPhone into believing
that it is operating on the AT&T network even when it is connected natively (not in roaming
mode) to another carrier.[96] Australian Personal Computer later published a ten-step guide to
unlocking the iPhone using the Turbo SIM method.[97]
In mid-August, UniquePhones announced an unlocking service for the iPhone, only to retract the
service the following week after receiving a phone call from a lawyer representing AT&T.[98]
On August 24, 2007, George Hotz, a 17-year-old hacker from Glen Rock, New Jersey, broke the
lock that ties Apple's iPhone to AT&T's wireless network. He confirmed that he unlocked the
phone and was using it on T-Mobile's network. The hack opened up a realm of possibilities for
overseas customers because the iPhone was only sold in the U.S at the time. By unlocking it,
Hotz opened up the phone to all kinds of phone networks across the world. Hotz posted the hack
on his blog.[99] The process is complicated and requires both disassembling the iPhone and
executing software commands on a personal computer. Hotz, along with four others across the
world, reportedly spent about 500 hours to unlock the phone.[100][101][102]
Also, on August 24, 2007, Engadget reported, by way of photos and a video clip, that they were
called by the "iPhoneSimFree" team to view a demonstration of unlocking the iPhone using a
software-only solution.[103] Unlike Hotz's hardware hack, the code in this hack was not made
available to the general public. Sales of the unlock started on September 10, by way of several
resellers who were able to order "keys" from iPhoneSimFree which are then passed onto the
customer to use the software.
After only one full day of sales, early on September 11 the iPhone Dev Team announced that
they had also created a working "software unlock", and released it to the public for free.[104]
Utilizing the existing unlock requires some technical knowledge, although a GUI-based version
was under construction. Two free, GUI-based unlocking programs that have been made available
are AnySim and iUnlock Reloaded.
On September 24, 2007 Apple issued a warning that future updates could render unlocked
iPhones unusable.[105] On September 27, 2007, owners of unlocked iPhones who took advantage
of the version 1.1.1 update through iTunes reported that the update rendered the device virtually
inoperable.[106] There were also reports that the update even affected some iPhones that were not
unlocked,[107] and Engadget found that the firmware update had "bricked" unhacked iPhones as
well. The firmware update relocks iPhones, but on October 11 the iPhoneSIMFree announced
that they had hacked the 1.1.1 iPhone update, not only unlocking them but also unbricking those
iPhones which were bricked by the update.[108]
On October 16, 2007, the iPhoneDevTeam released AnySIM 1.1, the free utility that unlocks
iPhones. The updated version works on firmware version 1.1.1, but doesn't fix baseband
problems caused by updating an unlocked 1.0.2 phone up to 1.1.1.[citation needed]
On October 23, 2007, the iPhone Elite Dev-Team released Revirginizing Tool to rebuild the lock
table in the seczone area to repair the damage done by the original anySIM 1.0x unlockers so
unlocked 1.0.2 iPhones can upgrade to 1.1.1 without bricking the iPhone. The tool is unbricking
the previously bricked iPhones.[citation needed]
On November 21, 2007, T-Mobile announced that due to litigation commenced against them by
their competitor Vodafone, which resulted in a preliminary injunction preventing T-Mobile from
locking the SIM card to T-Mobile in Germany, it will sell the phone "unlocked" and will offer
the iPhone without a T-Mobile contract for €999 (US$1,478) at its shops to customers in
Germany until the court renders a decision.[109]
During the end of November, Apple released another version of iPhone firmware, 1.1.2. This
version does not have many new features, but breaks unlocks.[citation needed]
During Macworld '08, on January 15, Apple released a fifth version of iPhone firmware, 1.1.3;
this version repairs loopholes used by "iPhone Hackers." The firmware however had been
compromised prior to release and new security measures were quickly bypassed.[citation needed]
On February 8, 2008 Geohot released the first full software unlock for the 1.1.2 & 1.1.3 OTB
iPhones.[110]

iPhone
From Wikipedia, the free encyclopedia
Jump to: navigation, search
This article is about the line of smartphones designed by Apple Inc. For other uses, see iPhone
(disambiguation).
This article may be too long to read and navigate comfortably. Please consider splitting
content into sub-articles and using this article for a summary of the key points of the
subject. (February 2011)

iPhone

The iPhone 4, the most recent generation of iPhone.

iPhone models

• iPhone (original)
• iPhone 3G
• iPhone 3GS
• iPhone 4

The iPhone (pronounced /ˈaɪfoʊn/ EYE-fohn) is a line of Internet and multimedia-enabled

smartphones designed and marketed by Apple Inc. The first iPhone was unveiled by Steve Jobs,
CEO of Apple, at the Moscone Center in San Francisco, California[1] on January 9, 2007.[2] The
phone was released on June 29, 2007.
An iPhone can function as a video camera, a camera phone with text messaging and visual
voicemail, a portable media player, and an Internet client with e-mail and web browsing
capabilities, and both Wi-Fi and 3G connectivity. The user interface is built around the device's
multi-touch screen, including a virtual keyboard rather than a physical one. Third-party as well
as Apple applications are available from the App Store, which launched in mid-2008 and now
has well over 300,000[3] "apps" approved by Apple. These apps have diverse functionalities,
including games, reference, GPS navigation, social networking, security and advertising for
television shows, films, and celebrities.
There are four generations of iPhone models, and they were accompanied by four major releases
of iOS (formerly iPhone OS). The original iPhone was a GSM phone that established design
precedents like screen size and button placement that have persisted through all models. The
iPhone 3G added 3G cellular network capabilities and A-GPS location. The iPhone 3GS added a
compass, faster processor, and higher resolution camera, including video. The iPhone 4 has two
cameras for FaceTime video calling and a higher-resolution display. It was released on June 24,
2010. On January 11, 2011, Apple and Verizon together launched a CDMA2000 compatible
iPhone 4 specifically for the Verizon network in the US, released on February 10, 2011.

Contents
[hide]
• 1 History and availability
• 2 Hardware
○ 2.1 Screen and input
○ 2.2 Audio and output
○ 2.3 Battery
○ 2.4 Camera
○ 2.5 Storage and SIM
○ 2.6 Liquid contact indicators
○ 2.7 Included items
• 3 Model comparison
• 4 Software
○ 4.1 Interface
○ 4.2 Phone
○ 4.3 Multimedia
○ 4.4 Internet connectivity
○ 4.5 Text input
○ 4.6 E-mail and text messages
○ 4.7 Third-party applications
○ 4.8 Accessibility
• 5 Intellectual property
• 6 Restrictions
○ 6.1 Activation
○ 6.2 Unapproved third-party software and jailbreaking
○ 6.3 SIM unlocking
 6.3.1 United States
 6.3.2 United Kingdom
 6.3.3 Australia
 6.3.4 Denmark
  6.3.5 France
 6.3.6 Germany
 6.3.7 Other countries
• 7 See also
• 8 References
• 9 External links

[edit] History and availability

Worldwide iPhone sales by quarter. Sales volume is in millions. Q1 is the holiday season.
Original iPhone
iPhone 3G
iPhone 3GS
iPhone 4

Worldwide iPhone availability:

Original iPhone was available; now iPhone 4
iPhone 3GS and 4
Coming soon
Main article: History of the iPhone
See also: List of iOS devices
Development of the iPhone began in 2005 with Apple CEO Steve Jobs' direction that Apple
engineers investigate touchscreens.[4] He also steered the original focus away from a tablet, like
the iPad, and towards a phone.[5] Apple created the device during a secretive collaboration with
AT&T Mobility—Cingular Wireless at the time—at an estimated development cost of
US$150 million over thirty months.[6] Apple rejected the "design by committee" approach that
had yielded the Motorola ROKR E1, a largely unsuccessful[citation needed] collaboration with
Motorola. Instead, Cingular gave Apple the liberty to develop the iPhone's hardware and
software in-house[7][8] in exchange for exclusive U.S. sales until 2011.
Jobs unveiled the iPhone to the public on January 9, 2007 at Macworld 2007. Apple was required
to file for operating permits with the FCC, but since such filings are made available to the public,
the announcement came months before the iPhone had received approval. The iPhone went on
sale in the United States on June 29, 2007, at 6:00 pm local time, while hundreds of customers
lined up outside the stores nationwide.[9] The original iPhone was made available in the UK,
France, and Germany in November 2007, and Ireland and Austria in the spring of 2008.
On July 11, 2008, Apple released the iPhone 3G in twenty-two countries, including the original
six.[10] Apple released the iPhone 3G in upwards of eighty countries and territories.[11] Apple
announced the iPhone 3GS on June 8, 2009, along with plans to release it later in June, July, and
August, starting with the U.S., Canada and major European countries on June 19. Many would-
be users objected to the iPhone's cost,[12] and 40% of users have household incomes over
US$100,000.[13] In an attempt to gain a wider market, Apple retained the 8 GB iPhone 3G at a
lower price point. When Apple introduced the iPhone 4, the 3GS became the less expensive
model. Apple reduced the price several times since the iPhone's release in 2007, at which time an
8 GB iPhone sold for $599. An iPhone 3GS with the same capacity now costs $49. However,
these numbers are misleading, since all iPhone units sold through AT&T require a two-year
contract (costing several hundred dollars), and a SIM lock.
Apple sold 6.1 million original iPhone units over five quarters.[14] Recorded sales have been
growing steadily thereafter, and by the end of fiscal year 2010, a total of 73.5 million iPhones
were sold.[15] By 2010/2011, the iPhone has a market share of barely 4% of all cellphones, but
Apple still pulls in more than 50% of the total profit that global cellphone sales generate.[16] Sales
in Q4 2008 surpassed temporarily those of RIM's BlackBerry sales of 5.2 million units, which
made Apple briefly the third largest mobile phone manufacturer by revenue, after Nokia and
Samsung.[17] Approximately 6.4 million iPhones are active in the U.S. alone.[13] While iPhone
sales constitute a significant portion of Apple's revenue, some of this income is deferred.[18]
The back of the original iPhone was made of aluminum with a black plastic accent. The iPhone
3G and 3GS feature a full plastic back to increase the strength of the GSM signal.[19] The iPhone
3G was available in an 8 GB black model, or a black or white option for the 16 GB model. They
both are now discontinued. The iPhone 3GS was available in both colors, regardless of storage
capacity. The white model was discontinued in favor of a black 8 GB low-end model. The
iPhone 4 has an aluminosilicate glass front and back with a stainless steel edge that serves as the
antennae. It is available in black; a white version was announced, but as of March 2011[update] has
not been released.
The iPhone has garnered positive reviews from critics like David Pogue[20] and Walter Mossberg.
[21][22]
The iPhone attracts users of all ages,[13] and, besides consumer use, the iPhone has also been
adopted for business purposes.[23]
On January 11, 2011, Verizon announced during a media event that it had reached an agreement
with Apple and would begin selling a CDMA2000 iPhone 4. Verizon said it would be available
for pre-order on February 3, with a release set for February 10.[24][25][26] In Feb 2011, the Verizon
iPhone accounted for 4.5 percent of all iPhone ad impressions in the U.S. on Millennial Media’s
mobile ad network.[27]
On March 2, 2011, at the iPad 2 event, Apple announced that they have sold 100 million
iPhones.[28]
[edit] Hardware
[edit] Screen and input
The touchscreen is a 9 cm (3.5 in) liquid crystal display with scratch-resistant glass.[29] The
capacitive touchscreen is designed for a bare finger, or multiple fingers for multi-touch sensing.
The screens on the first three generations have a resolution of 320 x 480 (HVGA) at 163 ppi,
while that of iPhone 4 has a resolution of 640 x 960 at 326 ppi.
The touch and gesture features of the iPhone are based on technology originally developed by
FingerWorks.[30] Most gloves and styluses prevent the necessary electrical conductivity;[31][32][33][34]
however, capacitive styli can be used with iPhone's finger-touch screen. The iPhone 3GS and
later also feature a fingerprint-resistant oleophobic coating.[35]

The top and side of the iPhone 3GS, externally identical to the iPhone 3G. The switches were
black plastic on the original model. From left to right, sides: wake/sleep button, SIM card slot,
headphone jack, silence switch, volume controls. Top: earpiece, screen.
The iPhone has a minimal hardware user interface, featuring only four or five buttons, depending
on the generation. The only physical menu button is situated directly below the display, and is
called the "Home button" because it closes the active app and navigates to the home screen of the
interface. The home button is denoted not by a house, as on many other similar devices, but a
rounded square, reminiscent of the shape of icons on the home screen. A multifunction
sleep/wake button is located on the top of the device. It serves as the unit's power button, and
also controls phone calls. When a call is received, pressing the sleep/wake button once silences
the ringtone, and when pressed twice transfers the call to voicemail. Situated on the left spine are
the volume adjustment controls. The iPhone 4 has two separate circular buttons to increase and
decrease the volume; all earlier models house two switches under a single plastic panel, known
as a rocker switch, which could reasonably be counted as either one or two buttons. Directly
above the volume controls is a silence switch that mutes all sound when engaged. All buttons
except Home were made of plastic on the original iPhone and metal on all later models. The
touchscreen furnishes the remainder of the user interface.
The display responds to three sensors (four on the iPhone 4). A proximity sensor deactivates the
display and touchscreen when the device is brought near the face during a call. This is done to
save battery power and to prevent inadvertent inputs from the user's face and ears. An ambient
light sensor adjusts the display brightness which in turn saves battery power. A 3-axis
accelerometer senses the orientation of the phone and changes the screen accordingly, allowing
the user to easily switch between portrait and landscape mode.[36] Photo browsing, web browsing,
and music playing support both upright and left or right widescreen orientations.[37] Unlike the
iPad, the iPhone does not rotate the screen when turned upside-down, with the Home button
above the screen, unless the running program has been specifically designed to do so. The 3.0
update added landscape support for still other applications, such as email, and introduced
shaking the unit as a form of input.[38][39] The accelerometer can also be used to control third-
party apps, notably games. The iPhone 4 also includes a gyroscopic sensor, enhancing its
perception of how it is moved.
A software update in January 2008[40] allowed the first-generation iPhone to use cell tower and
Wi-Fi network locations trilateration,[41] despite lacking GPS hardware. The iPhone 3G, 3GS and
4 employ A-GPS, and the iPhone 3GS and 4 also have a digital compass.[42]
[edit] Audio and output

One of two speakers (left) and the microphone (right) surround the dock connector on the base of
the original iPhone. If a headset is plugged in, sound is played through it instead.
The bottom of the iPhone sports a speaker (left) and a microphone (right) flanking the dock
connector. One loudspeaker is located above the screen as an earpiece, and another is located on
the left side of the bottom of the unit, opposite a microphone on the bottom-right. The iPhone 4
includes an additional microphone at the top of the unit for noise cancellation, and switches the
placement of the microphone and speaker on the base on the unit—the speaker is on the left.[43]
Volume controls are located on the left side of all iPhone models and as a slider in the iPod
application.
The 3.5 mm TRRS connector for the headphones is located on the top left corner of the device.[44]
The headphone socket on the original iPhone is recessed into the casing, making it incompatible
with most headsets without the use of an adapter.[45][46] Subsequent generations eliminated the
issue by using a flush-mounted headphone socket. Cars equipped with an auxiliary jack allow for
handsfree use of the iPhone while driving as a substitute for Bluetooth.
While the iPhone is compatible with normal headphones, Apple provides a headset with
additional functionality. A multipurpose button near the microphone can be used to play or pause
music, skip tracks, and answer or end phone calls without touching the iPhone. A small number
of third-party headsets specifically designed for the iPhone also include the microphone and
control button.[47] The current headsets also provide volume controls, which are only compatible
with more recent models.[48] These features are achieved by a fourth ring in the audio jack that
carries this extra information.
The built-in Bluetooth 2.x+EDR supports wireless earpieces and headphones, which requires the
HSP profile. Stereo audio was added in the 3.0 update for hardware that supports A2DP.[38][39]
While non-sanctioned third-party solutions exist, the iPhone does not officially support the
OBEX file transfer protocol.[49] The lack of these profiles prevents iPhone users from exchanging
multimedia files, such as pictures, music and videos, with other bluetooth-enabled cell phones.
Composite or component video at up to 576i and stereo audio can be output from the dock
connector using an adapter sold by Apple.[50] iPhone 4 also supports 1024x768 VGA output via a
dock adapter. The iPhone did not support voice recording until the 3.0 software update.[38][39]
[edit] Battery
Replacing the battery requires opening the iPhone unit and exposing the internal hardware.
The iPhone features an internal rechargeable battery. Like an iPod but unlike most other mobile
phones, the battery is not user-replaceable.[45][51] The iPhone can be charged when connected to a
computer for syncing across the included USB to dock connector cable, similar to charging an
iPod. Alternatively, a USB to AC adapter (or "wall charger," also included) can be connected to
the cable to charge directly from an AC outlet. A number of third-party accessories (car chargers,
portable chargers, battery cases, stereo dock chargers, and even solar chargers) are also available.
[citation needed]

Apple runs tests on preproduction units to determine battery life. Apple's website says that the
battery life "is designed to retain up to 80% of its original capacity after 400 full charge and
discharge cycles",[52] which is comparable to iPod batteries.
The battery life of early models of the iPhone has been criticized by several technology
journalists as insufficient and less than Apple's claims.[53][54][55][56] This is also reflected by a J. D.
Power and Associates customer satisfaction survey, which gave the "battery aspects" of the
iPhone 3G its lowest rating of 2 out of 5 stars.[57][58]
If the battery malfunctions or dies prematurely, the phone can be returned to Apple and replaced
for free while still under warranty.[59] The warranty lasts one year from purchase and can be
extended to two years with AppleCare. Though the battery replacement service and its pricing
was not made known to buyers until the day the product was launched,[60][61] it is similar to how
Apple (and third parties) replace batteries for iPods. The Foundation for Taxpayer and Consumer
Rights, a consumer advocate group, has sent a complaint to Apple and AT&T over the fee that
consumers have to pay to have the battery replaced.[60] Since July 2007, third-party battery
replacement kits have been available[62] at a much lower price than Apple's own battery
replacement program. These kits often include a small screwdriver and an instruction leaflet, but
as with many newer iPod models the battery in the original iPhone has been soldered in.
Therefore a soldering iron is required to install the new battery. The iPhone 3G uses a different
battery fitted with a connector that is easier to replace.[63]
The iPhone 4 is the first generation to have two cameras. The LED flash for the rear-facing
camera (top) and the forward-facing camera (bottom) are both unique to that model.
[edit] Camera
The original iPhone and iPhone 3G feature a built-in Fixed focus 2.0 megapixel camera located
on the back for still digital photos. It has no optical zoom, flash or autofocus, and does not
support video recording (iPhone 3G does support video recording via 3rd party App available on
the App Store), however jailbreaking allows users to do so. Version 2.0 of iPhone OS introduced
the capability to embed location data in the pictures, producing geocoded photographs.
The iPhone 3GS has a 3.2 megapixel camera, manufactured by OmniVision, featuring autofocus,
auto white balance, and auto macro (up to 10 cm). It is also capable of capturing 640x480 (VGA
resolution) video at 30 frames per second,[64] although compared to higher-end CCD based video
cameras it does exhibit the rolling shutter effect.[65] The video can then be cropped on the device
itself and directly uploaded to YouTube, MobileMe, or other services
The iPhone 4 introduced a 5.0 megapixel camera (2592x1936 pixels), also located on the back,
which is equipped with a backside illuminated sensor capable of capturing pictures in low-light
conditions, as well as an LED flash capable of staying lit for video recording at 720p resolution,
considered high-definition.[66] In addition the iPhone 4 has a second camera on the front capable
of VGA photos and SD video recording.
[edit] Storage and SIM

An iPhone 3G with the SIM slot open. The SIM ejector tool is still placed in the eject hole.
The iPhone was initially released with two options for internal storage size: 4 GB or 8 GB. On
September 5, 2007, Apple discontinued the 4 GB models.[67] On February 5, 2008, Apple added a
16 GB model.[68] The iPhone 3G was available in 16 GB and 8 GB. The iPhone 3GS came in
16 GB and 32 GB variants and still is available in 8 GB. The iPhone 4 is available in 16 GB and
32 GB variants. All data is stored on the internal flash drive; the iPhone does not support
expanded storage through a memory card slot, or the SIM card.
GSM Models of the iPhone use a SIM card to identify themselves to the GSM network. The SIM
sits in a tray, which is inserted into a slot at the top of the device. The SIM tray can be ejected
with a paperclip or the "SIM eject tool" (a simple piece of die-cut sheet metal) included with the
iPhone 3G and 3GS.[69][70] In most countries, the iPhone is usually sold with a SIM lock, which
prevents the iPhone from being used on a different mobile network.[71]
The GSM iPhone 4 features a MicroSIM card that is located in a slot on the right side of the
device.[72]
The CDMA model of the iPhone, like all CDMA phones, does not use a SIM.
[edit] Liquid contact indicators
The iPhone is equipped with liquid contact indicators which change from white to red in color
when they come in contact with water. These suggest whether water damage has affected the
device. The indicators on the iPhone include a small disc which is located at the bottom of the
headphone jack and with the iPhone 3G and all later models an additional one is located at the
bottom of the dock connector.[73] The indicators are often used by Apple employees to determine
whether the device qualifies for a warranty repair or replacement. If the indicators show that the
device was exposed to water, they may determine that the device is not covered by Apple.
However, the liquid contact indicators may be triggered through routine use, and if a device is
worn while exercising, the sweat from an owner may dampen the indicators enough to indicate
water damage.[74] On many other mobile phones from different manufacturers, the liquid contact
indicators are located in a protected location, such as beneath the battery behind a battery cover,
but the indicators on an iPhone are directly exposed to the environment. This has led to criticism
of the placement of the indicators, which may also be affected by steam in a bathroom or other
light environmental moisture.[75] In response to these criticisms, Apple made a silent change to
their water damage policy for iPhones and similar products. This new policy allows the customer
to request further internal inspection of the phone to verify if internal liquid damage sensors were
triggered.[76]
[edit] Included items

The contents of the box of an iPhone 4. From left to right: lid, iPhone 4 in plastic holder, written
documentation, and (top to bottom) headset, USB cable, wall charger.
All iPhone models include written documentation, and a dock connector to USB cable. The
original and 3G iPhones also came with a cleaning cloth. The original iPhone included stereo
headset (earbuds and a microphone) and a plastic dock to hold the unit upright while charging
and syncing. The iPhone 3G includes a similar headset plus a SIM eject tool (the original model
requires a paperclip). The iPhone 3GS includes the SIM eject tool and a revised headset, which
adds volume buttons (not functional with previous iPhone versions).[48][77] The iPhone 3G and
3GS are compatible with the same dock, sold separately, but not the original model's dock.[78] All
versions include a USB power adapter, or "wall charger," which allows the iPhone to charge
from an AC outlet. The iPhone 3G and iPhone 3GS sold in North America, Japan, Colombia,
Ecuador, or Peru[79][80] include an ultracompact USB power adapter.
[edit] Model comparison
Four generations of the iPhone
The iPhone 3G (second
generation), released on July
11, 2008

The iPhone 3GS (third

generation), released on June
19, 2009
Main article: List of iOS devices
Model iPhone iPhone 3G iPhone 3GS iPhone 4
Status Discontinued Discontinued In Production In Production
Initial iOS 4.0 (GSM version)
operating iOS 1.0 iOS 2.0 iOS 3.0 iOS 4.2.6 (CDMA
system version)
Highest iOS 4.3.2 (GSM
Supported version)
iOS 3.1.3 iOS 4.2.1 iOS 4.3.2
operating iOS 4.2.7 (CDMA
system version)
89 mm (3.5 in), 3:2
In addition to
aspect ratio,
89 mm (3.5 in), 3:2 aspect ratio, previous:
aluminosilicate glass
scratch-resistant[81] glossy glass fingerprint-
Display covered IPS LCD
covered screen, 262,144-color LCD, resistant
screen, 960 × 640 px at
480 × 320 px (HVGA) at 163 ppi oleophobic
326 ppi, 800:1 contrast
coating[82]
ratio
Storage 4, 8, or 16 GB 8 or 16 GB 8, 16, or 32 GB 16 or 32 GB
System on Samsung Apple A4[87] (Samsung
Samsung S5L8900[83][84]
chip S5L8920[85][86] S5L8930)[88]
833 MHz
620 MHz (underclocked to 400 (iOS
(underclocked to 1 GHz (underclocked to
1.1 and 1.1.1) or 412 (iOS 1.1.2 and
CPU Core 600 MHz) 800 MHz)[90]
later) MHz) [85]
ARM Cortex-A8 ARM Cortex-A8
ARM 1176JZ(F)-S [89]

GPU Core PowerVR MBX Lite GPU[91] PowerVR SGX535 GPU[92][93]

256 MB DRAM[85]
Memory 128 MB DRAM[94] [89] 512 MB DRAM[95]
GSM-model: Quad
band
GSM/GPRS/EDGE
Quad band Quad band (850, 900, 1800,
GSM/GPRS/EDG GSM/GPRS/EDG 1900 MHz)
E (850, 900, 1800, E (850, 900, 1800, Quad band
Quad band UMTS/HSDPA/HSUP
1900 MHz) 1900 MHz)
Compatible GSM/GPRS/EDG A (850, 900, 1900,
Tri-band Tri-band
networks E (850, 900, 1800, 2100 MHz),[97][98]
UMTS/HSDPA UMTS/HSDPA
1900 MHz) 7.2 Mbit/s HSDPA,
(850, 1900, (850, 1900,
2100 MHz), [96]
2100 MHz), 5.76 Mbit/s HSUPA
3.6 Mbit/s HSDPA 7.2 Mbit/s HSDPA CDMA model: Dual-
band CDMA/EV-DO
Rev. A (800 1900
MHz)
802.11b/g/n 2.4 GHz
Wi-Fi 802.11b/g
only
Bluetooth Bluetooth 2.0 + Bluetooth 2.0 + Bluetooth 2.1 + Bluetooth 2.1 + EDR
EDR EDR EDR Broadcom 4329
 Cambridge Cambridge
Broadcom 4325[100]
Bluecore4[99] Bluecore6
In addition to
previous:
In addition to In addition to previous:
voice control,
previous: 3-axis gyroscope,
USB 2.0/dock digital compass,
Connectivity assisted GPS, Dual-microphone noise
connector Nike+,
includes earphones suppression,
includes earphones
with mic microSIM
with remote and
microphone
Rear 5.0 MP backside
3.0 MP with VGA illuminated CMOS
video at 30 fps, tap image sensor with 720p
to focus, HD video at 30 fps and
Camera 2.0 MP autofocus, white LED flash
balance, macro Front 0.3 MP (VGA)
focus, and with tap to focus and
exposure 720p HD video at 30
fps
Wolfson Wolfson
Audio codec Microelectronics Microelectronics Cirrus Logic CS42L61[103][104]
WM8758BG[101] WM6180C[102]
Aluminosilicate glass
Aluminum, glass Glass, plastic, and steel; black or white and stainless steel;
Materials
and plastic (white not available for 8 GB models) black (white
announced)
Built-in, non removable, rechargeable lithium-ion polymer battery[105][106][107]
Power 3.7 V
3.7 V 1150 3.7 V 1219
1400 mA·h[citation [106] 3.7 V 1420 mA·h[109]
needed] mA·h mA·h[108]
audio: 24 audio: 30 audio: 40
audio: 24 video: 7 video: 10 video: 10
video: 7 Talk over 3G: 5 Talk over 3G: 5 Talk over 3G (GSM
Rated
Talk over 2G: 8 Browsing over 3G: Browsing over 3G: models): 7
battery life
Browsing internet: 5 5 Browsing over 3G: 6
(hours)
6 Browsing over Wi- Browsing over Wi- Browsing over Wi-Fi:
Standby: 250 Fi: 9 Fi: 9 10
Standby: 300 Standby: 300 Standby: 300[110]
115 × 61 ×
115.5 × 62.1 × 12.3 mm (4.5 × 2.4 × 115.2 × 58.6 × 9.3 mm
Dimensions 11.6 mm (4.5 × 2.4
0.48 in) (4.5 × 2.31 × 0.37 in)
× 0.46 in)
Weight 135 g (4.8 oz) 135 g (4.8 oz) 135 g (4.8 oz) 137 g (4.8 oz)
4 and 8 GB: June 16 and 32 GB:
29, 2007 June 19, 2009
Released July 11, 2008 June 24, 2010
16 GB: February 5, Black 8 GB: June
2008 24, 2010
Discontinued 4 GB: September 16 GB: June 8, 16 and 32 GB: In production
 5, 2007 2009 June 24, 2010
8 and 16 GB: July Black 8 GB: June Black 8 GB: In
11, 2008 4, 2010 production
Type
01/161200,
Allocation 01/124500 01/194800 01/233800
01/181200
Codes

[edit] Software
Main articles: iOS (Apple) and iOS version history

The default Home screen of iOS 4.2.1 shows most of the applications provided by Apple. Users
can download additional applications from the App store, create Web Clips, rearrange the icons,
and create folders.
The iPhone, iPod Touch and iPad run an operating system known as iOS (formerly iPhone OS).
It is a variant of the same Darwin operating system core that is found in Mac OS X. Also
included is the "Core Animation" software component from Mac OS X v10.5 Leopard. Together
with the PowerVR hardware (and on the iPhone 3GS, OpenGL ES 2.0), it is responsible for the
interface's motion graphics. The operating system takes up less than half a gigabyte.[111] It is
capable of supporting bundled and future applications from Apple, as well as from third-party
developers. Software applications cannot be copied directly from Mac OS X but must be written
and compiled specifically for iOS.
Like the iPod, the iPhone is managed with iTunes. The earliest versions of the OS required
version 7.3 or later, which is compatible with Mac OS X version 10.4.10 Tiger or later, and 32-
bit Windows XP or Vista.[112] The release of iTunes 7.6 expanded this support to include 64-bit
versions of XP and Vista,[113] and a workaround has been discovered for previous 64-bit
Windows operating systems.[114] Apple provides free updates to the OS for the iPhone through
iTunes,[111] and major updates have historically accompanied new models.[115] Such updates often
require a newer version of iTunes — for example, the 3.0 update requires iTunes 8.2 — but the
iTunes system requirements have stayed the same. Updates include both security patches and
new features.[116] For example, iPhone 3G users initially experienced dropped calls until an
update was issued.[117][118]
[edit] Interface
The interface is based around the home screen, a graphical list of available applications. iPhone
applications normally run one at a time (not including iOS 4, which includes running
applications in the background [119]) , although most functionality is still available when making a
call or listening to music. The home screen can be accessed at any time by a hardware button
below the screen, closing the open application in the process.[120] By default, the Home screen
contains the following icons: Messages (SMS and MMS messaging), Calendar, Photos, Camera,
YouTube, Stocks, Maps (Google Maps), Weather, Voice Memos, Notes, Clock, Calculator,
Settings, iTunes (store), App Store, and (on the iPhone 3GS and iPhone 4) Compass. Docked at
the base of the screen, four icons for Phone, Mail, Safari (Internet), and iPod (multimedia)
delineate the iPhone's main purposes.[121] On January 15, 2008, Apple released software update
1.1.3, allowing users to create "Web Clips", home screen icons that resemble apps that open a
user-defined page in Safari. After the update, iPhone users can rearrange and place icons on up to
nine other adjacent home screens, accessed by a horizontal swipe.[40] Users can also add and
delete icons from the dock, which is the same on every home screen. Each home screen holds up
to sixteen icons, and the dock holds up to four icons. Users can delete Web Clips and third-party
applications at any time, and may select only certain applications for transfer from iTunes.
Apple's default programs, however, may not be removed. The 3.0 update adds a system-wide
search, known as Spotlight, to the left of the first home screen.[38][39]
Almost all input is given through the touch screen, which understands complex gestures using
multi-touch. The iPhone's interaction techniques enable the user to move the content up or down
by a touch-drag motion of the finger. For example, zooming in and out of web pages and photos
is done by placing two fingers on the screen and spreading them farther apart or bringing them
closer together, a gesture known as "pinching". Scrolling through a long list or menu is achieved
by sliding a finger over the display from bottom to top, or vice versa to go back. In either case,
the list moves as if it is pasted on the outer surface of a wheel, slowly decelerating as if affected
by friction. In this way, the interface simulates the physics of a real object. Other user-centered
interactive effects include horizontally sliding sub-selection, the vertically sliding keyboard and
bookmarks menu, and widgets that turn around to allow settings to be configured on the other
side. Menu bars are found at the top and bottom of the screen when necessary. Their options vary
by program, but always follow a consistent style motif. In menu hierarchies, a "back" button in
the top-left corner of the screen displays the name of the parent folder.
[edit] Phone
When making a call, the iPhone presents a number of options, including FaceTime on supported
models. The screen is automatically disabled when held close to the face.
The iPhone allows audio conferencing, call holding, call merging, caller ID, and integration with
other cellular network features and iPhone functions. For example, if music is playing when a
call is received, the music fades out, and fades back in when the call has ended. The proximity
sensor shuts off the screen and touch-sensitive circuitry when the iPhone is brought close to the
face, both to save battery and prevent unintentional touches. The iPhone does not support video
calling or videoconferencing on versions prior to the fourth generation, as there is only one
camera on the opposite side of the screen.[122] The iPhone 4 supports video calling using either
the front or back camera over Wi-Fi, a feature Apple calls FaceTime.[123] The first two models
only support voice dialing through third-party applications.[124] Voice control, available only on
the iPhone 3GS and iPhone 4, allows users to say a contact's name or number and the iPhone will
dial.[125]
The iPhone includes a visual voicemail (in some countries)[126] feature allowing users to view a
list of current voicemail messages on-screen without having to call into their voicemail. Unlike
most other systems, messages can be listened to and deleted in a non-chronological order by
choosing any message from an on-screen list.
A music ringtone feature was introduced in the United States on September 5, 2007. Users can
create custom ringtones from songs purchased from the iTunes Store for a small additional fee.
The ringtones can be 3 to 30 seconds long from any part of a song, can fade in and out, pause
from half a second to five seconds when looped, or loop continuously. All customizing can be
done in iTunes,[127] or alternatively with Apple's GarageBand software 4.1.1 or later (available
only on Mac OS X)[128] or third-party tools.[129]
[edit] Multimedia
The layout of the music library is similar to that of an iPod or current Symbian S60 phones. The
iPhone can sort its media library by songs, artists, albums, videos, playlists, genres, composers,
podcasts, audiobooks, and compilations. Options are always presented alphabetically, except in
playlists, which retain their order from iTunes. The iPhone uses a large font that allows users
plenty of room to touch their selection. Users can rotate their device horizontally to landscape
mode to access Cover Flow. Like on iTunes, this feature shows the different album covers in a
scroll-through photo library. Scrolling is achieved by swiping a finger across the screen.
Alternatively, headset controls can be used to pause, play, skip, and repeat tracks. On the iPhone
3GS, the volume can be changed with the included Apple Earphones, and the Voice Control
feature can be used to identify a track, play songs in a playlist or by a specific artist, or create a
Genius playlist.[125]

The photo display application supports both portrait and landscape orientations.
The iPhone supports gapless playback.[130] Like the fifth-generation iPods introduced in 2005, the
iPhone can play digital video, allowing users to watch TV shows and movies in widescreen.
Double-tapping switches between widescreen and fullscreen video playback.
The iPhone allows users to purchase and download songs from the iTunes Store directly to their
iPhone. The feature originally required a Wi-Fi network, but now[when?] can use the cellular data
network if one is not available.[131]
The iPhone includes software that allows the user to upload, view, and e-mail photos taken with
the camera. The user zooms in and out of photos by sliding two fingers further apart or closer
together, much like Safari. The Camera application also lets users view the camera roll, the
pictures that have been taken with the iPhone's camera. Those pictures are also available in the
Photos application, along with any transferred from iPhoto or Aperture on a Mac, or Photoshop
in Windows.
[edit] Internet connectivity

Wikipedia Main Page on the iPhone's Safari web browser in landscape mode
Internet access is available when the iPhone is connected to a local area Wi-Fi or a wide area
GSM or EDGE network, both second-generation (2G) wireless data standards. The iPhone 3G
introduced support for third-generation UMTS and HSDPA 3.6,[132] but not HSUPA networks,
and only the iPhone 3GS and iPhone 4 support HSDPA 7.2.[133] AT&T introduced 3G in July
2004,[134] but as late as 2007, Steve Jobs stated that it was still not widespread enough in the US,
and the chipsets not energy efficient enough, to be included in the iPhone.[32][135] Support for
802.1X, an authentication system commonly used by university and corporate Wi-Fi networks,
was added in the 2.0 version update.[136]
By default, the iPhone will ask to join newly discovered Wi-Fi networks and prompt for the
password when required. Alternatively, it can join closed Wi-Fi networks manually.[137] The
iPhone will automatically choose the strongest network, connecting to Wi-Fi instead of EDGE
when it is available.[138] Similarly, the iPhone 3G, 3GS and 4 prefer 3G to 2G, and Wi-Fi to
either.[139] Wi-Fi, Bluetooth, and 3G (on the iPhone 3G, 3GS, and 4) can all be deactivated
individually. Airplane mode disables all wireless connections at once, overriding other
preferences. However, once in Airplane mode, one can explicitly enable Wi-Fi and/or Bluetooth
modes to join and continue to operate over one or both of those networks while the cellular
network transceivers remain off.
The iPhone 3GS has a maximum download rate of 7.2 Mbit/s.[140] Furthermore, files downloaded
over cellular networks must be smaller than 20 MB.[141] Larger files, often email attachments or
podcasts, must be downloaded over Wi-Fi (which has no file size limits). If Wi-Fi is unavailable,
one workaround is to open the files directly in Safari.[142]
Safari is the iPhone's native web browser, and it displays pages similar to its Mac and Windows
counterparts. Web pages may be viewed in portrait or landscape mode and supports automatic
zooming by pinching together or spreading apart fingertips on the screen, or by double-tapping
text or images.[143][144] The iPhone supports neither Flash[145] nor Java.[146][unreliable source?]
Consequently, the UK's Advertising Standards Authority adjudicated that an advertisement
claiming the iPhone could access "all parts of the internet" should be withdrawn in its current
form, on grounds of false advertising.[147] In a rare public letter in April 2010, Apple CEO Steve
Jobs outlined the reasoning behind the absence of Flash on the iPhone (and iPad).[148] The iPhone
supports SVG, CSS, HTML Canvas, and Bonjour.[149][150]
The maps application can access Google Maps in map, satellite, or hybrid form. It can also
generate directions between two locations, while providing optional real-time traffic information.
During the iPhone's announcement, Jobs demonstrated this feature by searching for nearby
Starbucks locations and then placing a prank call to one with a single tap.[4][151] Support for
walking directions, public transit, and street view was added in the version 2.2 software update,
but no voice-guided navigation.[152] The iPhone 3GS and iPhone 4 can orient the map with its
digital compass.[42] Apple also developed a separate application to view YouTube videos on the
iPhone, which streams videos after encoding them using the H.264 codec. Simple weather and
stock quotes applications also tap in to the Internet.
iPhone users can and do access the Internet frequently, and in a variety of places. According to
Google, in 2008, the iPhone generated 50 times more search requests than any other mobile
handset.[153] According to Deutsche Telekom CEO René Obermann, "The average Internet usage
for an iPhone customer is more than 100 megabytes. This is 30 times the use for our average
contract-based consumer customers."[154] Nielsen found that 98% of iPhone users use data
services, and 88% use the internet.[13] In China, the iPhone 3G and iPhone 3GS were built and
distributed without Wi-fi.[155]
With the introduction of the Verizon iPhone in January 2011, the issue of using internet while on
the phone has been brought to the public's attention. Under the two US carriers, internet and
phone could be used simultaneously on ATT networks, whereas the Verizon networks only
support for the use of each separately.[156]
[edit] Text input
The virtual keyboard on the original iPhone's touchscreen.
For text input, the iPhone implements a virtual keyboard on the touchscreen. It has automatic
spell checking and correction, predictive word capabilities, and a dynamic dictionary that learns
new words. The keyboard can predict what word the user is typing and complete it, and correct
for the accidental pressing of keys near the presumed desired key.[157] The keys are somewhat
larger and spaced farther apart when in landscape mode, which is supported by only a limited
number of applications. Touching a section of text for a brief time brings up a magnifying glass,
allowing users to place the cursor in the middle of existing text. The virtual keyboard can
accommodate 21 languages, including character recognition for Chinese.[158] The 3.0 update
brought support for cut, copy, or pasting text, as well as landscape keyboards in more
applications.[38][39]
[edit] E-mail and text messages
The iPhone also features an e-mail program that supports HTML e-mail, which enables the user
to embed photos in an e-mail message. PDF, Word, Excel, and Powerpoint attachments to mail
messages can be viewed on the phone.[159] Apple's MobileMe platform offers push email, which
emulates the functionality of the popular BlackBerry email solution, for an annual subscription.
Yahoo! offers a free push-email service for the iPhone. IMAP (although not Push-IMAP) and
POP3 mail standards are also supported, including Microsoft Exchange[160] and Kerio Connect.
[161]
In the first versions of the iPhone firmware, this was accomplished by opening up IMAP on
the Exchange server. Apple has also licensed Microsoft ActiveSync and now[when?] supports the
platform (including push email) with the release of iPhone 2.0 firmware.[162][163] The iPhone will
sync e-mail account settings over from Apple's own Mail application, Microsoft Outlook, and
Microsoft Entourage, or it can be manually configured on the device itself. With the correct
settings, the e-mail program can access almost any IMAP or POP3 account.[164]
Text messages are presented chronologically in a mailbox format similar to Mail, which places
all text from recipients together with replies. Text messages are displayed in speech bubbles
(similar to iChat) under each recipient's name. The iPhone has built-in support for e-mail
message forwarding, drafts, and direct internal camera-to-e-mail picture sending. Support for
multi-recipient SMS was added in the 1.1.3 software update.[165] Support for MMS was added in
the 3.0 update, but not for the original iPhone[38][39] and not in the U.S. until September 25, 2009.
[166][167]
[edit] Third-party applications
See also: iPhone SDK and App Store
At WWDC 2007 on June 11, 2007, Apple announced that the iPhone would support third-party
"web applications" written in Ajax that share the look and feel of the iPhone interface.[168] On
October 17, 2007, Steve Jobs, in an open letter posted to Apple's "Hot News" weblog, announced
that a software development kit (SDK) would be made available to third-party developers in
February 2008. The iPhone SDK was officially announced and released on March 6, 2008, at the
Apple Town Hall facility.[169] It is a free download, with an Apple registration, that allows
developers to develop native applications for the iPhone and iPod Touch, then test them in an
"iPhone simulator". However, loading an application onto a real device is only possible after
paying a Apple Developer Connection membership fee. Developers are free to set any price for
their applications to be distributed through the App Store, of which they will receive a 70%
share.[170] Developers can also opt to release the application for free and will not pay any costs to
release or distribute the application beyond the membership fee. The App Store was launched
with the release of iOS 2.0, on July 11, 2008.[163] The update was free for iPhone users; owners of
older iPod Touches were required to pay US$10 for it.[171]
Once a developer has submitted an application to the App Store, Apple holds firm control over
its distribution. Apple can halt the distribution of applications it deems inappropriate, for
example, I Am Rich, a US$1000 program that simply demonstrated the wealth of its user.[172]
Apple has been criticized for banning third-party applications that enable a functionality that
Apple does not want the iPhone to have: In 2008, Apple rejected Podcaster, which allowed
iPhone users to download podcasts directly to the iPhone claiming it duplicated the functionality
of iTunes.[173] Apple has since released a software update that grants this capability.[152]
NetShare, another rejected app, would have enabled users to tether their iPhone to a laptop or
desktop, using its cellular network to load data for the computer.[174] Many carriers of the iPhone
later globally allowed tethering before Apple officially supported it with the upgrade to the iOS
3.0, with AT&T Mobility being a relative latecomer in the United States.[175] In most cases, the
carrier charges extra for tethering an iPhone.
Before the SDK was released, third-parties were permitted to design "Web Apps" that would run
through Safari.[176] Unsigned native applications are also available for "jailbroken" phones.[177]
The ability to install native applications onto the iPhone outside of the App Store is not
supported by Apple, the stated reason being that such native applications could be broken by any
software update, but Apple has stated it will not design software updates specifically to break
native applications other than those that perform SIM unlocking.[178]
On January 2011 Apple has passed 10 billion app downloads.[179]
[edit] Accessibility
The iPhone can enlarge text to make it more accessible for vision-impaired users,[180] and can
accommodate hearing-impaired users with closed captioning and external TTY devices.[181] The
iPhone 3GS also features white on black mode, VoiceOver (a screen reader), and zooming for
impaired vision, and mono audio for limited hearing in one ear.[182] Apple regularly publishes
Voluntary Product Accessibility Templates which explicitly state compliance with the US
regulation "Section 508".[183]
[edit] Intellectual property
 This section is in a list format that may be better presented using prose. You can help
by converting this section to prose, if appropriate. Editing help is available. (February 2011)

Apple has filed more than 200 patent applications related to the technology behind the iPhone.
[184][185]

LG Electronics claimed the iPhone's design was copied from the LG Prada. Woo-Young Kwak,
head of LG Mobile Handset R&D Center, said at a press conference, "We consider that Apple
copied Prada phone after the design was unveiled when it was presented in the iF Design Award
and won the prize in September 2006."[186]
On September 3, 1993, Infogear filed for the U.S. trademark "I PHONE"[187] and on March 20,
1996 applied for the trademark "IPhone".[188] "I Phone" was registered in March 1998,[187] and
"IPhone" was registered in 1999.[188] Since then, the I PHONE mark had been abandoned.[187]
Infogear's trademarks cover "communications terminals comprising computer hardware and
software providing integrated telephone, data communications and personal computer functions"
(1993 filing),[187] and "computer hardware and software for providing integrated telephone
communication with computerized global information networks" (1996 filing).[189] Infogear
released a telephone with an integrated web browser under the name iPhone in 1998.[190] In 2000,
Infogear won an infringement claim against the owners of the iphones.com domain name.[191] In
June 2000, Cisco Systems acquired Infogear, including the iPhone trademark.[192] On December
18, 2006, they released a range of re-branded Voice over IP (VoIP) sets under the name iPhone.
[193]

In October 2002, Apple applied for the "iPhone" trademark in the United Kingdom, Australia,
Singapore, and the European Union. A Canadian application followed in October 2004, and a
New Zealand application in September 2006. As of October 2006, only the Singapore and
Australian applications had been granted. In September 2006, a company called Ocean Telecom
Services applied for an "iPhone" trademark in the United States, United Kingdom and Hong
Kong, following a filing in Trinidad and Tobago.[194] As the Ocean Telecom trademark
applications use exactly the same wording as Apple's New Zealand application, it is assumed that
Ocean Telecom is applying on behalf of Apple.[195] The Canadian application was opposed in
August 2005, by a Canadian company called Comwave who themselves applied for the
trademark three months later. Comwave has been selling VoIP devices called iPhone since 2004.
[192]

Shortly after Steve Jobs' January 9, 2007, announcement that Apple would be selling a product
called iPhone in June 2007, Cisco issued a statement that it had been negotiating trademark
licensing with Apple and expected Apple to agree to the final documents that had been submitted
the night before.[196] On January 10, 2007, Cisco announced it had filed a lawsuit against Apple
over the infringement of the trademark iPhone, seeking an injunction in federal court to prohibit
Apple from using the name.[197] More recently, Cisco claimed that the trademark lawsuit was a
"minor skirmish" that was not about money, but about interoperability.[198]
On February 2, 2007, Apple and Cisco announced that they had agreed to temporarily suspend
litigation while they held settlement talks,[199] and subsequently announced on February 20, 2007,
that they had reached an agreement. Both companies will be allowed to use the "iPhone"
name[200] in exchange for "exploring interoperability" between their security, consumer, and
business communications products.[201]
The iPhone has also inspired several leading high-tech clones,[202] driving both Apple's popularity
and consumer willingness to upgrade iPhones quickly.[203]
On October 22, 2009, Nokia filed a lawsuit against Apple for infringement of its GSM, UMTS
and WLAN patents. Nokia alleges that Apple has been violating ten of Nokia's patents since the
iPhone's initial release.[204]
In December 2010, Reuters reported that some iPhone and iPad users were suing Apple Inc
because some applications were passing user information to third-party advertisers without
permission. Some makers of the applications such as Textplus4, Paper Toss, Weather Channel,
Dictionary.com, Talking Tom Cat and Pumpkin Maker have also been named as co-defendants
in the lawsuit.[205]
Since April 20, 2011, a hidden unencrypted file on the iPhone and other iOS devices has been
widely discussed in the media.[206][207] The file, labeled "consolidated.db", constantly stores the
iPhone user's movement by approximating geographic locations calculated by triangulating
nearby cell phone towers, a technology proven to be inaccurate at times.[208] The file was released
with the June 2010 update of Apple's iOS4 and may contain almost one year's worth of data.
Previous versions of iOS stored similar information in a file called "h-cells.plist".[209] F-Secure
discovered that the data is transmitted to Apple twice a day and postulate that Apple is using the
information to construct their global location database similar to the ones constructed by Google
and Skyhook through wardriving.[210] Nevertheless, unlike Google's "Latitude" application, which
performs a similar task on Android phones, the file is not dependent upon signing a specific
EULA or even the user's knowledge, but it is stated in the iPhone's 15,200 words long terms and
conditions that "Apple and [their] partners and licensees may collect, use, and share precise
location data, including the real-time geographic location of [the user's] Apple computer or
device".[211] The file is also automatically copied onto the user's computer once synchronized
with the iPhone. Apple's representatives have not yet commented on the finding, in spite of
requests by The Associated Press and others.[212] An open source application named
"iPhoneTracker", which turns the data stored in the file into a visual map, was made available to
the public in April 2011.[213] While the file cannot be erased without jailbreaking the phone, it can
be encrypted.[214]
[edit] Restrictions
Jailbroken iPod Touch on iOS 3.0. The serial number and Wi-Fi address have been removed
from the image.
Apple tightly controls certain aspects of the iPhone. The hacker community has found many
workarounds, most of which are disallowed by Apple and threaten to void the device's warranty.
[215]
"Jailbreaking" allows users to install apps not available on the App Store or modify basic
functionality. SIM unlocking allows the iPhone to be used on a different carrier's network.[216]
[edit] Activation
The iPhone normally prevents access to its media player and web features unless it has also been
activated as a phone with an authorized carrier. On July 3, 2007, Jon Lech Johansen reported on
his blog that he had successfully bypassed this requirement and unlocked the iPhone's other
features with a combination of custom software and modification of the iTunes binary. He
published the software and offsets for others to use.[217]
Unlike the original, the iPhone 3G must be activated in the store in most countries.[218] This
makes the iPhone 3G more difficult, but not impossible, to hack. The need for in-store activation,
as well as the huge number of first-generation iPhone and iPod Touch users upgrading to iPhone
OS 2.0, caused a worldwide overload of Apple's servers on July 11, 2008, the day on which both
the iPhone 3G and iPhone OS 2.0 updates as well as MobileMe were released. After the update,
devices were required to connect to Apple's servers to authenticate the update, causing many
devices to be temporarily unusable.[219] Apple avoided this by releasing the 3.0 software two days
before the iPhone 3GS.
Users on the O2 network in the United Kingdom, however, can buy the phone online and
activate it via iTunes as with the previous model.[220] Even where not required, vendors usually
offer activation for the buyer's convenience. In the U.S., Apple has begun to offer free shipping
on both the iPhone 3G and the iPhone 3GS (when available), reversing the in-store activation
requirement. Best Buy and Wal-Mart will also sell the iPhone.[221]
[edit] Unapproved third-party software and jailbreaking
See also: Jailbreaking for iOS and iPhone Dev Team
The iPhone's operating system is designed to only run software that has an Apple-approved
cryptographic signature. This restriction can be overcome by "jailbreaking" the phone,[222] which
involves replacing the iPhone's firmware with a slightly modified version that does not enforce
the signature check. Doing so may be a circumvention of Apple's technical protection measures.
[223]
Apple, in a statement to the United States Copyright Office in response to EFF lobbying for a
DMCA exception for this kind of hacking, claimed that jailbreaking the iPhone would be
copyright infringement due to the necessary modification of system software.[224] Jailbroken
iPhones may be susceptible to computer viruses, but few such incidents have been reported.[225]
[226]

[edit] SIM unlocking

[edit] United States

iPhone 3G shown with the SIM tray partially ejected.

Most iPhones were and are still sold with a SIM lock, which restricts the use of the phone to one
particular carrier, a common practice with subsidized GSM phones. Unlike most GSM phones
however, the phone cannot be officially unlocked by entering a code. The locked/unlocked state
is maintained on Apple's servers per IMEI and is set when the iPhone is activated.
While the iPhone was initially sold in the US only on the AT&T network with a SIM lock in
place, various hackers have found methods to "unlock" the phone from a specific network.[227]
Although AT&T and Verizon are the only authorized iPhone carriers in the United States,
unlocked iPhones can be used with other carriers after unlocking.[228] More than a quarter of the
original iPhones sold in the United States were not registered with AT&T. Apple speculates that
they were likely shipped overseas and unlocked, a lucrative market before the iPhone 3G's
worldwide release.[229] iPhones are unlocked by users who wish to use networks other than
AT&T's.[12][not in citation given][230]
AT&T has stated that the "iPhone cannot be unlocked, even if you are out of contract".[228][231] On
March 26, 2009, AT&T in the United States began selling the iPhone without a contract, though
still SIM-locked to their network.[232] The up-front purchase price of such iPhone units is often
twice as expensive as those bundled with contracts.[233] Outside of the United States, policies
differ, especially in US territories and insular areas like Guam, where GTA TeleGuam is the
exclusive carrier for the iPhone, since neither AT&T nor Verizon have a presence in the area.[234]
[edit] United Kingdom
Operators O2, Orange, 3, Vodafone, T-Mobile, as well as MVNO Tesco Mobile sell the device
in the UK under subsidised contracts, or for use on pay as you go. They are locked to network
initially, though are usually able to be unlocked either after a certain period of contract length
has passed, or for a small fee. The iPhone 4 in the UK is also currently sold unlocked without a
contract for full retail price for use on any network the user chooses, but only when bought
directly from Apple (either online or in their physical shops).[235]
[edit] Australia
Five major carriers in Australia, (Three, Optus, Telstra, Virgin Mobile, and Vodafone),[236] offer
legitimate unlocking, now at no cost for all iPhone devices, both current and prior models. The
iPhone 3GS and the iPhone 4 can also be bought unlocked from a Apple Retail Store, or the
Apple Online Store.[71]
[edit] Denmark
This section does not cite any references or sources.
Please help improve this article by adding citations to reliable sources. Unsourced material may be
challenged and removed. (February 2011)

It is possible to purchase the iPhone directly from Apple[237] According to Danish law, the iPhone
can be unlocked after six months on contract, or earlier by paying a fee of DKK 500 (approx.
€70).[citation needed]
TDC does not lock their iPhones[citation needed]
[edit] France
This section does not cite any references or sources.
Please help improve this article by adding citations to reliable sources. Unsourced material may be
challenged and removed. (February 2011)

In France, the iPhone is locked on the Wireless purchased from (Orange, SFR, Bouygues
Telecom or Virgin Mobile), but can also be bought unlocked in Apple stores. Phones that were
initially locked to a carrier are unlocked for free after a certain portion of the bundled contract's
fixed term is up, or for a fee at any time before that.
[edit] Germany
In Germany, the iPhone 3GS or iPhone 4 may be purchased without a SIM-lock directly from
Apple.[238] The iPhone may also be purchased through three of the four major German mobile
network carriers.[239]
[edit] Other countries
The iPhone is also available without any SIM lock for full retail price in some countries.
Vendors in countries including Thailand, Austria, Belgium, Canada, South Africa, Ecuador,
Singapore, Greece, Cyprus, Romania, Taiwan, China, Hong Kong, Pakistan, Bangladesh, Italy,
Ireland, Israel, Turkey, New Zealand, Vietnam, Finland, Russia, and Saudi Arabia sell iPhones
not locked to any carrier.[71] In India, iPhone is officially sim locked either to Vodafone or Airtel.
[edit] See also
Phone Wars: iPhone vs TyTN, Treo, Pearl, E62, P990, Q

Steve Job’s ambitious goal to grab a fifth of the smartphone market, coyly understated as ‘just 1% of
the entire billion unit mobile phone industry’, indicates that Apple is looking at the industry very
differently than every other vendor. While most phones are cheap or nearly free, the iPhone aims at
the high end of smartphones.

Previous articles looked at how mobile providers’ phone subsidies distort pricing, and how
smartphones relate to the rest of the mobile industry. Here’s a look at how the iPhone relates to other
phones on the market.
Where Does the iPhone Fit?
Despite the iPhone being Apple’s first volley into into a crowded market, the company is pursuing an
ambitious entry strategy. Rather than copying an existing successful product and a popular price
point, the iPhone blazes a new trail in its combination of features and form factor, and does so at a
significantly higher price.

When analysts pick at the iPhone's price, they tend to gloss over the fact that this is really a handheld
computer, not a basic smartphone. When they complain about missing features, they rarely point out

the correlation between those features and a higher price.

The iPhone floats in the uncharted territory between Microsoft's "ultra mobile" Windows XP Tablet PCs
like the $1300 Samsung Q1, and the tiny but clumsy Windows Mobile phones with chicklet keyboards
that slide out of a box that is as thick as an unabridged Russian dictionary.

Charting a New Course

The iPhone is closer to being a micro-laptop using flash RAM than a conventional smartphone. In fact,
it is actually far closer to being a modern version of the 1994 Newton--which Jobs was purportedly so
embittered against--than anything that Microsoft has ever released. It bears little resemblance to
Windows Mobile.

Imagine the Newton, but smaller, retrofitted with a modern OS, a camera, a phone, an iPod, built in
wireless, better battery life, a color screen, faster, with a finger-based touch screen... and the iPhone
emerges.
While Apple's retail stores might give the iPhone an advantage in up-selling its own customers from
their basic phones, it will still need to aggressively outsell existing smartphones to meet Apple 10
million sales target. What does the iPhone compete against? Here's a quick look at other phones on
the market.

The iPhone’s Competition

There are few popular phones on the market near the iPhone's $500 price. Basic phones are
commonly free, and smartphones typically cost between $100 and $200 with a service provider
subsidy and mail in rebates.
All smartphones require a two year contract--a minimum commitment of over $2000--to qualify for
the subsidy discount. Unlocked phone prices represent the actual cost of the phone without any carrier
subsidy.

Additional rebates may apply to new customers. Prices differ slightly by region, and may be even
lower online. Here’s what I found online at Amazon and Cingular in a recent price check.

The High End: Symbian Sony Ericsson P990

The new Sony Ericsson P990 is listed as $700 unlocked, with no service options in the US offered by
Amazon.

Like the Palm, it has a stylus driven touch screen. Its screen is half the resolution of the iPhone. It has
a number button face that flips down to expose a tiny keyboard below it.

On Amazon, users complained about its software being buggy and crashing frequently. Like the
iPhone, it sports premium features like a 2 Megapixel camera and WiFi wireless networking;
unlike Apple’s iPhone however, the P990 supports the much faster UMTS 3G data service.

The problem with its 3G service is that it only works on European service bands. The limited 3G data
service that is available in the US uses different frequencies. Similarly, it uses Tri-band GSM, not
Quad-band GSM like the iPhone, giving it reduced voice coverage in the US.

Service Complexities for World Phones and UMTS 3G Data Service

GSM uses two bands in Europe (900/1800 MHz), and three in the US (850/1800/1900 MHz) for voice
service; [John Kneeland pointed out that the 1800 MHz band is only used in the US by the Department
of Defense].

Tri-band phones work on both bands in Europe, but only two [one!] in the US. Quad-band world
phones support all four, providing additional service coverage for users in the US.
High speed UMTS 3G data service is even more complicated. Existing service in Europe and elsewhere
combines two bands for data uplink and downlink (2100+1900 MHz).

Unfortunately, parts of the 2100 MHz band are already in use in the US for satellite communications,
and parts of the 1900 MHz band are already in use in the US for GSM networks.

Cingular has already started rolling out its own, incompatible UMTS service (850+1900 MHz) in certain
US cities, and later this year T-Mobile will offer a different UMTS 3G service (2100+1700 MHz).
Neither matches Europe’s (2100+1900 MHz), so both require phones specifically designed to support
the oddball US formats.

Between the limited service availability of 3G data service in the US, and the problem of different sets
of frequencies in use, 3G service does not yet make a lot of sense in the US.

That’s why few US phones offer 3G service, and why those that would seem to, like the Sony Ericsson
P990, won’t actually work in the US.

Higher End: Windows Mobile HTC TyTN

One of the most expensive phones commonly available is the HTC TyTN/Hermes/8525. Cingular offers
it for $400 after rebate and subsidy; Amazon for $200 with service and rebates or $760 unlocked,

with a $999 list price.

Like the Palm and other Windows Mobile Pocket PCs, it has a stylus driven touch screen. Its screen is
also half the resolution of the iPhone. It has a PDA style face which slides open to reveal a QWERTY
keyboard, although it’s too big for thumb typing, and too small for touch typing.

Like the iPhone, it sports premium features like a 2 Megapixel camera and WiFi wireless
networking. Like the P990, it also supports UMTS 3G data service, although it works on both Europe
and Cingular’s networks.

In order to do that, it packs in Multiband UMTS, as well as being Quad-band GSM like the iPhone.
Support for all those networks results in a unit over twice as thick as the iPhone, but also gives it
much faster Internet access when WiFi isn’t available.

The premium price and 3G features of the TyTN and similar high end Windows Mobile phones has not
done much to expand Microsoft's share of the market. That's why recent offerings by vendors licensing
Windows Mobile have targeted the low end of the smartphone market.

Most Windows Mobile Smartphones Aim Low

Most smartphones running Windows Mobile are conservatively featured and are priced to sell for
around $100 with a carrier subsidy. Few support WiFi, and most lack a touch screen or enough
memory to run many apps and store music or photos, apart from ringtones and camera phone
pictures.

They are basic phones with organizer functions, often with features problematically hidden in deeply
nestled pulldown menus that erase any premise of being designed for one handed use.

A big sales pitch for Windows Mobile involves mobile versions of Office apps, as if people are likely to
edit Excel documents on a tiny screen.
Low-end Windows Smartphones, like the $500 Samsung Blackjack and $400 Motorola Q are aimed to
sell in the range of $100-200 with a contract subsidy and mail-in rebates.

These phones abandon the PDA or tiny-PC form factor of earlier WinCE devices to imitate the success
and styling of the BlackBerry and Treo.

The Palm Treo and RIM BlackBerry

The loyal following of Palm Treo and RIM BlackBerry users allows those vendors to regularly introduce
new models at higher price points than other phones, and then sell older models at a discount to
budget customers. New Palm Treo versions typically debut at a list price of $650, while a new
BlackBerry lists around $400.

With subsidy, Cingular sells the latest Treo 750 on its website for $400, while Amazon offers it for as
little as $99. Older versions of the Treo are listed by Cingular at $100, or as little as $49 on Amazon.
Cingular lists various BlackBerry models between $100-$200, while Amazon offers them from $70 to
Free.

Palm offers a higher resolution display and more memory than most other common mobiles, making it

a popular choice for users who want PDA features.

BlackBerry phones are popular among professionals addicted to the push messaging they introduced--
where emails arrive immediately without the user having to stop and check--along with their thumb
driven tiny keypad.

Unique features of the BlackBerry and Palm are mixing together as vendors copy each other’s strong
points. The result is that many mobiles now have the familiar thumb keyboard, a small touch screen,
and similar menus and features and applications.

Snooze You Lose?

The middle class phones from Palm and RIM, along with imitative offerings by Windows Mobile and
Symbian licensees, all aim to sell for around $100 or less with a contract subsidy and cover a laundry
list of basic features:

1.•basic camera phone

 2.•simplified web browser
3.•basic PDA and sync functions
4.•text messaging and picture mail
5.•simple add-on apps like Google Maps
6.•downloadable $2 ringtones and games

They also all share Device Problems In Search of a Solution: the user interface, stability, sync, and
DRM issues I like to point out as plaguing the industry.

It is therefore rather bold for Apple to introduce a phone that is priced around $500, particularly given
that Apple plans to swallow up nearly 20% of the smartphone market by the end of next year. Other
high end phones exist primarily to anchor a vendor’s lineup; Sony doesn’t expect its P990 to sell to a
wide, mass market audience.

Distinguishing Features
Apart from 3G data service, the iPhone offers hardware features that meet or beat the fancier phones
common in markets outside the US: better camera, much larger display, far more memory for
storage, and WiFi support.

Where it really differs from existing US phones is in its unique OS X driven software features:

1.•a finger driven multi-touch screen with intuitive gesture shortcuts that make complex actions simple
2.•a multiple page, standard web browser with smart, resolution independent zooming
3.•a real photo and music media library, and real calendar and contact applications
4.•real 3-pane email with support for HTML mail and push accounts; support for visual voicemail
5.•tightly integrated, custom Google Maps and other apps; tight integration between phone features
6.•integration with iTunes for real media sync, not just ringtones and pay per view toy video

Critics suggesting that the iPhone is “just a fancier version” of the email and web on existing phones
are being just as disingenuous as DOS users who pooh-poohed the Mac in 1984, or those who couldn’t
understand why the Palm Pilot and BlackBerry could have devoted fans. It’s all about practical
usability.

Good Tools Are Worth It

Existing phones are a lot like the gift box toolsets offered in discount stores: all the pieces are
technically there, but it’s difficult to be productive with them when doing a serious job. The toy
hammer’s head falls off every three swings and the screwdrivers strip themselves.

Using cheap tools turns out to be expensive in the end because of lost opportunity costs. Why spend
$4.99 on a pretend hammer when a real hammer can be bought for $25, saving the frustrating
expense of messing around with inadequate junk?
Will sticker shock be a barrier to Apple’s iPhone? That may depend on whether consumers are able to
see past the ruse of phone subsidies and realize that the most expensive thing about a phone is not
its hardware cost but the service fees.

Spending $2000 across two years is more pleasant with a $500 functional phone than with a toy piece
of junk that may be available for free. Given that consumers already see the difference between the
$500 iPod and $99 imitations, it looks like the only thing Apple has to worry about is building enough
to meet demand.

Next, I’ll compare the iPhone to new phones still on the horizon, and how quickly other phones might
catch up.

Have another phone to suggest in comparison? Let me know and I'll do a follow up review.

Next Articles:
Windows 95 and Vista: Why 2007 Won't Be Like 1995
Readers Write About Symbian, OS X and the iPhone
Mac OS X vs Linux: Third Party Software and Security
Mac OS X vs Linux on the iPhone and Mobile Devices
The Egregious Incompetence of Palm
More Absurd iPhone Myths: Third Party Software Panic
More Absurd iPhone Myths: iSuppli, Subsidies, and Pricing
The Spectacular Failure of WinCE and Windows Mobile
OS X vs. WinCE: How iPhone Differs from Windows Mobile
Apple's OS X: How Does it Fit on the iPhone?
Why OS X is on the iPhone, but not the PC
Apple iPhone vs LG Prada KE850
Phone Wars: iPhone vs TyTN, Treo, Pearl, E62, P990, Q
Smartphones: iPhone and the Big Fat Mobile Industry
Cingular Apple iPhone vs. Verizon Motorola Q
Zune vs. iPhone: Five Phases of Media Coverage
Inside the iPhone: FairPlay DRM and the iTunes Store
Inside the iPhone: Wireless and Sync vs. Palm, WinCE
Inside the iPhone: UI, Stability, and Software
Readers Write About iPhone, 3G Wireless Networks
Inside the iPhone: Third Party Software
Inside the iPhone: Mac OS X, ARM, and iPod OS X
Inside the iPhone: EDGE, EVDO, HSUPA, 3G, and WiFi
Macworld: Ten Myths of the Apple iPhone
Macworld: Scorecard and Secrets of the iPhone

This Series
Tech: Apple & the Media

What do you think? I really like to hear from readers. Leave a comment or email me with your ideas.

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Why the iPhone is a success
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Not for the reasons you think
By Guy Kewney, NewsWireless.Net • Get more from this author
Posted in Networks, 12th July 2007 09:46 GMT
Free whitepaper – Google Apps for Business : Secure, reliable business applications in the cloud
Column Two weeks after the iPhone virus started spreading, the verdict has to be that Steve Jobs
has got it right.
The trick with launching a new phone is "keep it simple". He's done that. No, this is not the
phone I want, and neither is it the right MP3 player, but it will be a success, and that success will
grow as new variants appear - like the 3G version. I think the key to its success will be the fact
that this is not a 3G version.

Start off from the iPod, and think back to the Motorola ROKR phone. At that time, the question
marketing people were struggling with was: "How can we make a phone which is as good as the
iPod at playing music?"
The obvious trick was to build the MP3 player into the phone - a ploy with a long history (I think
my first MP3 phone was a Samsung, nearly seven years ago) and a lot of casualties. The ROKR
was the first attempt to build an iPod into the phone.
It failed for reasons which have to include the fact that the ROKR was not a good phone, and it
was an even worse iPod. Actually, it wasn't an iPod at all, it was a very ordinary Motorola phone
with the ability to interface to iTunes.
The Steve Jobs magic was let loose on it, and it simply burned up and disappeared. Even his
legendary demonstration skills failed when he tried to take a call while it was playing music.
And it didn't have enough capacity for music, and it didn't have enough battery life - but above
all, what people want to be seen with is the iPod - that "perfect thing" which transformed the
world of music.
So the iPhone went the other way around. Instead of putting the iTunes engine into a phone,
Apple put the phone into an iPod. It's a brilliant example of the "keep it simple, stupid" principle
- if you are going to innovate, make it a small incremental step. Don't introduce five new features
at once.
And the small, incremental step was not the phone. That's typical Steve Jobs magic - "Watch my
fingers carefully!" says the stage magician. What he's really doing is something entirely
different...he's re-designing the iPod user interface.
If Apple had announced that it was abandoning the spin-wheel for the iPod, and had just
launched iNew iPod there's a real chance it would have gone down like New Coke did. People
understand the iPod. They can scroll through their songs with their hands in their pockets, or
while running or in the dark. Why change?
The short answer is because the Walkman was a success.
I think that initially, the Apple consensus was that it was perfectly possible to simply add phone
commands to an iPod, or add iPod functions to a phone. ROKR showed this was not all that
easy. And, at the same time, the Sony Ericsson Walkman range showed that people did prefer to
carry just one dual-purpose device, rather than a player and a phone.
The thing is, the controls that work really well for driving a music player aren't very good for
texting; they're not intuitive for operating a web browser, and they really aren't versatile enough
for doing all the other control settings and phone number entry functions that a good phone
simply has to be able to do. So a spin-wheel phone was probably not a great idea.
The ordinary mobile with play, pause, FF, and skip had been done. I think Sony Ericsson has
done it about as well as it can be done. If Apple went down that route, all it'd have would be
another Walkman, with an Apple logo on it. It wouldn't be an iPod.
A nasty dilemma, isn't it? If you fix the iPod UI so it works for phone users, you risk alienating
the faithful iPodders; if you borrow the phone UI for the iPod you produce a fake Walkman.
There's another problem. This phone has to work for the networks, and the networks need a
phone that people will keep switched on. Rigorous studies show there's a direct relationship
between how many bars you have on your battery indicator and how many calls you'll make.
When the battery indicates less than half full, people start to turn the thing off to save power.
That's a disaster for the networks. Not only are people no longer making calls but, even worse,
they can't receive them. "Termination charges" are where the networks make more than half their
money - they get a payment for every call their customers answer. Phone switched off? No
termination charge.

The new iPhone user interface is the real trick. It's a typical Apple invention, making control of a
cyberdevice easier, more intuitive, and it works well. But, because it's called an iPhone,
everybody knows it's an iPod. The phone is what you focus on, and never notice that what's
really happening is that the old iPod is no longer in the magician's hands, and the new one has
been smuggled onto the stage. A wave of the hands and <pouf!/> - cries of "oooh!" and "aaaah!"
and "It's an iPhone!"
Now that we know it works, Apple can refine it. It can sort out the network (AT&T problems are
a great test bed) and it can upgrade the wireless (GPRS or EDGE is hopeless for a web phone),
and can make sure it gets the battery life right.
And when all that's done, you release the 3G phone.
I dare say several European networks would sell the current iPhone, even though it needs EDGE
wireless to be even slightly acceptable, and there's very little EDGE in Europe - they would just
like to be able to put it on their advert pages! But for serious numbers, that won't work. I don't
know a single European carrier with spare data capacity on their 2.5 G data networks; and the
iPhone is a potentially huge data pump.
But most European carriers have far more 3G data than they can find a use for. Probably (say
analysts), the problem will catch up with them in two years. As soon as the market find a killer
application for mobile data, the spare capacity will become a shortage. There are plans (see
femtocells) which may be able to deal with that in a couple of years. Right now, they don't have
to worry about 3G capacity, but they do need a successful 3G phone that will generate revenue
there. It may not be profitable revenue, but in a fire sale, any price is better than giving it away
free.
By the time the shortage of handsets eases in North America (looks like a few months from now)
the 3G phone will be ready; there's no need to launch the current model anywhere except on
AT&T and Cingular.
I hope Apple does sort out the digital rights management issue. There are problems with some of
the music studios, true, but overall iTunes FairPlay has been a winner, and there's no credible
competition. Let's hope that the restrictive DRM on the iPhone is a "proof of concept" for people
who think they need it, rather than a pointer to where Apple is taking downloads - otherwise,
recorded music could hit the buffers (Maybe, it will, anyway?).
But at this point, it really does look like the innovation of putting a GSM wireless into the box as
an excuse for updating the spinwheel, has worked. The faithful have loved it, and the phone
users seem to understand it.
And even if demand does go soft in North America in September, and Apple has to ship 100,000
odd units into other markets, it won't change anything. At about 10,000 units per country, it
won't spoil the market for the Real Thing, which will be around in January. And long before
then, we'll know which European networks are carrying the iTunes traffic. ®
What's Behind the iPhone Success Story?
The seemingly recession-proof iPhone captures mindshare and money.

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 April 27, 2009
By Michelle Megna: More stories by this author:

How is it possible for Apple to

sell 3.8 million iPhones over
the past three months --
generating $1.5 billion in
revenue -- during a recession?
The impressive numbers can
be attributed to Apple's
(NASDAQ: AAPL)
streamlined product family,
marketing prowess and the
sheer sexiness of the iPhone,
all of which may be nibbling away at the netbook market, according to analysts.
"Let's face it, the iPhone is iconic, it's cool, it's sexy, it's now, but last week, it was all about the 1
billionth app. They're marketing geniuses, they dominate mindshare for their space in the
market," Ramon Llamas, analyst at IDC, told InternetNews.com.
Another factor boosting Apple's continued growth is the company's streamlined family of tech
devices, said Llamas. "If you have a Mac, and you want to get a new phone, the question to
consumers is 'where do I keep my data now?' If you get an iPhone, you can sync up everything
easily, you can move data back and forth," he said.
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0 10 w w w .internetnew

For more stories on this topic:

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Netbooks continue to sell well compared to laptops and desktops, but when faced with a limited
budget and the choice between a new smartphone or a netbook, consumers are more likely to opt
for the mobile phone due to its portability, said Llamas.
"The mindset is you use the phone as a communications and entertainment device. The other
extreme is the laptop that more or less stays on the kitchen table. In between is the netbook, but
there's not a clear consensus on whether netbooks would replace laptops or replace phones,
because the beauty of the phone is it fits in your pocket and you take it everywhere," he said.
Greg Sterling, a senior mobile analyst with Local Mobile Search, agrees. "I don't think it's
necessarily a substitute for a netbook, maybe for some, but it's more that people view the mobile
phone as the most important piece of technology they can own. It's a crude generalization, but it's
true, there's lots of research that backs that up, and that's why people will give up their landline
or even Internet access before they give up their mobile phone," Sterling said.
Pricing, namely AT&T (NYSE: T) subsidizing the iPhone, also bolstered sales well into the
recession, he said. "When the price goes down from $500 to $200 and you get the 3G
improvements too, that's a huge driver, a crucial factor," said Sterling.
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But he adds that you have to create something truly eye-catching that's also easy to use to
continue sales growth beyond the early adopters.
"As more of the population sees what the iPhone can do, give you Internet on the go, it becomes
a transformative device, in the same way the iPod finally brought all the existing pieces of the
MP3 universe together in an elegant and very chic fashion, that's what the iPhone is doing.
Smartphones have been around for years, but it took Apple to make one that, when a person sees
someone else with it on a train say to themselves 'I want one.'"
Still, there are signs that the Apple iPhone may have peaked, though with new versions rumored
to be out this summer, that's not necessarily a bad thing.
Special Report
Here Come the iPhone Apps
Apple's opened its iPhone to third-party developers -- and they're responding
in droves, looking to cash in on the growing market for smartphones and
mobilized apps.

Llamas pointed out that iPhone sales numbers are dropping down, with 6.9
million sold in 3Q of 2008, 4.4 million in the fourth quarter of last year and now 3.79 million for
the first quarter of this year. "These numbers are great, nothing to shrug at, but it's important to
keep Apple's numbers in context. RIM by the end of the quarter ending February 28 moved more
than seven million units, but no one is talking about that because Apple has mindshare."
Indeed, in the fourth quarter, RIM shipped roughly 7.8 million devices and for the fiscal year
shipped about 26 million handhelds. In addition, RIM added 3.9 million net new BlackBerry
subscriber accounts, pushing its full subscriber base to more than 25 million worldwide.
Still, Sterling believes Apple will continue to dominate the headlines with success stories. "It is
quite remarkable how well they've done during the recession. Apple is exceptional, they create
enormous hype that's impossible to live up to, and yet, they do. It's like standing at the other end
of a basketball court and saying, 'I'm going to throw the ball through the hoop' and then doing
just that."
TAGS: iPhone, RIM, Blackberry, Apple, smartphone

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6 Comments (click to add your comment)

By James Katt April 27 2009 11:19 AMPDT

The iPhone is NOT just a phone. It is an ecosystem. That is what makes it successful.

Buying the iPhone enters the user into this ecosystem - which no one else has.

This ecosystem includes:

1. iTunes - to manage music, movies, photos, data, audio books, apps, podcasts, etc.
2. The iPod Touch and iPod - for everything except the phone
3. Applications - now with billions downloaded
4. Accessories - themselves a multibillion dollar marketplace
5. Macintosh computers
6. Apple Stores - essentially churches to visit and buy and socialize
7. etc. etc.

The iPhone plus iPod Touch handily outsell Blackberry.

The iPhone is also:

1. a netbook that fits in your pocket, which you take everywhere and every time.
2. a portable gaming player - better than the Nintendo DS, nearly selling as many units as the Sony PSP in its
lifespan (when added to the iPod Touch).

Reply to this comment

By AdamC April 27 2009 11:42 AMPDT

RIMM moved their blackberries because of their 1 for 1 promotion. pundits should take note of this before jumping
overboard.
The other point to take note of is their 40% gross margin, it is either mean they use very cheap labour or cheap raw
materials or components for the products.

Reply to this comment

By Constable Odo April 27 2009 2:35 PMPDT
As well as the iPhone is selling, it is certainly handicapped by only being able to be used on one carrier in the U.S.,
having only one basic design and no model with a keyboard.

The iPhone is a nice device, but not everyone in the world needs one. Many people just need a basic handset that
makes and receives telephone calls. Many people can't afford the monthly cost of using an iPhone. Where I live
many people have iPhones, but I still see more BlackBerrys in various models. Not everyone owns a computer and
so what would they hook up their iPhones to. The BlackBerry has built a fairly loyal customer base over the years and
it will take time for those people to decide to move to an unfamiliar iPhone. Meanwhile RIM will continue to make
Apple's iPhone seem like a toy on the corporate front and will probably do so for several more years.

Reply to this comment

By PD April 27 2009 2:53 PMPDT

I've dealt with them all... Moto Q w/Windows Mobile, Palm, Blackberry... you can HAVE 'em. Now with the iPhone I no
longer do I feel like I'm "working" the phone to get what I need out of it. It's a super-intuitive JOY to use.

In fact, it's crazy to call it a "phone". It's a Mac, with a phone attached.

Reply to this comment

By tom b April 27 2009 5:06 PMPDT

The iPhone actually does MORE than a netbook; it has an accelerometer for games; fits in your pocket; and can
approximate GPS,

Reply to this comment

By silverwarloc April 28 2009 9:37 AMPDT

@Constable Odo:

I agree with on one aspect: that the iPhone is tied to one carrier. However, your other arguments are totally off.
1. You said its a one design with no keyboard. I'm glad that it is one design with no keyboard. I have Samsung Touch
and an iPhone. It just does not compete. I've had several other phones from T-Mobile, Sprint, Nextel, and Verizon--it
just does not compete. Typing on a physical keyboard is so masochistic, I just don't see how people get used to it.
Typing on an iPhone, on the other hand, is a bliss. I can type faster on the iPhone than on any cell phone with a
keyboard.
2. You don't need a computer to hood up the phone. It would be nice. But not necessary. Especially with mobileme.

Reply to this comment

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3817276 What's Behind the 0

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7 Real Reasons Why iPhone Is a Smash Hit
By Om Malik Oct. 21, 2008, 11:30pm PT 75 Comments
• Tweet
•
 Love it or hate it…there is no denying that Apple’s iPhone is not only a
game changer but a certifiable hit. Apple shared some interesting stats about the iPhone today. I
culled some of the more interesting facts from the transcript of Apple’s fiscal fourth-quarter
(ended September 30) earnings conference call, posted by the Apple 2.0 blog & Seeking Alpha.
• Since its launch on July 11, Apple sold 6.892 million 3G iPhones in the quarter, bringing
the total number of iPhones sold so far to 12.992 million. Many of the new phones were
sold to first-time buyers.
• Apple recognized $806 million in iPhone-related revenues for the quarter.
• If Apple didn’t defer the iPhone revenue, the iPhone sales would have accounted for
about 39 percent of the adjusted total quarterly revenues. Jobs put the number at $4.6
billion.
• The iPhone will be sold in 70 countries by end of this year. It is currently sold in 51
countries.
• By revenues, Apple is now the 3rd largest mobile phone maker behind Nokia and
Samsung, ahead of Sony & LG Electronics. Samsung had revenues of $5.9 billion and it
seems beatable.
• iPhone is outselling RIM. Jobs kept hammering on that point during the conference call.
• Apple says that in the 102 days since the iPhone Apps store opened, nearly 200 million
iPhone apps have been downloaded. There are about 5500 apps available on the iPhone
Apps store. Follow iPhone Apps on our TheAppleBlog. (Related story: What about that
iPhone Bump?)
In response to an analyst’s question, Jobs said that while the company has a “miniscule market
share of the mobile phone market” and that it “may not appeal to every prospective customer,”
but “the percentage of prospective customers we need to attract in order to significantly increase
our market share isn’t that many.” Rest of the mobile business, please make a note of that.
972diggsdigg
Apple’s volume-to-revenue ratio should scare its rivals. “The traditional game in the phone
market has been to produce a voice phone in a hundred different varieties,” Jobs replied to a
question about how he can play in the market with one version of the device. Jobs said that
software (and user experience) are Apple’s current and future strategy. “From everything I heard,
Babe Ruth had only one home run; he just kept hitting it over and over again.”
Update: I just wanted to point out that we made some observations about iPhone and how it was
going to change the wireless business. All those things did indeed happen and the details from
Apple’s most recent financial report proves that.
Reviews of people

 Reply
Finnsense Tuesday, October 21 2008
It’s obviously a great piece of kit and is certain to dominate the space it’s in. I wonder how many
people with N95s or N82s (like me) would have an iphone if we weren’t tied into 2-year
contracts.
In terms of challenging Nokia we would need to know what percentage of Nokia’s revenues
come from the smart phone market. I’ve heard that although it’s a small share of total sales, the
margins on smart phones are much larger than the cheaper phones. If that’s the case it could
really dent Nokia’s profits. Unless they do something soon my next phone will probably be an
iphone – and I live in Helsinki!
Finland’s startup blog http://www.arcticstartup.com just had a post about Nokia maybe changing
direction and abandoning symbian or experimenting with android. That would be interesting.

 Reply
gp Wednesday, October 22 2008
Apple sucks in asia where people prefer to buy nokia , sony erricsson or RIM , motorola rather
iphone as its 4 times more expensive than whats its in US and substandard carrier pricing which
is hard to explain ! , Asia is where around 1 billion of active mobile population (and growing)
and they are not going use it till apple fixes the problem

 Reply
Max Wednesday, October 22 2008
Finsense – Nokia sold 15m smartphones in their last quarter. Only 3x the number of iPhones.
The key stat though is that Nokias net income on devices in the last quarter was $2bn. iPhone net
income was $1.3bn. That astonishing.

 Reply
John Wednesday, October 22 2008
@gp:
4 times more expensive!!! slight case of bad maths mate.
My iPhone ( White one, therefore most expensive ) cost $140 more than a Nokia E65. I buy my
mobiles outright and if you call that 4 times more expensive, then I would like some of what
your smoking.

 Reply
Harish Agrawal Wednesday, October 22 2008
Motorola was initialy very successful with one phone strategy. It worked initially, by the time
they figured its not working anymore it was too late.

 Reply
gp Wednesday, October 22 2008
@john
http://www.vodafone.in/existingusers/products/pages/iphone3g_emi.aspx
http://www.airtel.in/iphone3g/getready.html
iphone us cost 199 usd
iphone india cost 729.424 USD
you do the maths ;-)

 Reply
Srinath Wednesday, October 22 2008
If apple offer US price in indian apple can sold 4 time this ?

 Reply
Allen Wednesday, October 22 2008
I was expecting to see 7 reasons that might help to explain why apple have been successful rather
than 7 points of evidence that clearly demonstrate that they have been.
So I’ll put in my 2 cents (or two reasons anyway):
#2 there’s no denying that apple put together a pretty good product but;
#1 Apple did a fantastic job marketing their product. They timed the launch perfectly to produce
a great quarter, and with Christmas on the way ensure a strong follow up quarter.

 Reply
Finnsense Wednesday, October 22 2008
“#1 Apple did a fantastic job marketing their product.”
I agree but it’s worth pointing out that a lot of people who use Apple products act like cult
members. They are completely obsessive and impervious to reason. Apple could put out a toilet
roll made of sandpaper and they would buy it – because it’s Apple.
When you have a zealous following you will always get better marketing because these people
will camp outside stores for three days and prosylatize to their friends. That’s newsworthy and
creates buzz. That’s the trick.
If Apple devotees ever grow a brain, Apple might be in trouble. Its products are fine but they are
closed and they’re over-priced. Apple should be seen more like Microsoft.

 Reply
LS Wednesday, October 22 2008
Are you joking…do we really need any confirmation? in just 15 months apple managed to create
a Nokia/3 !!! i give Apple 2-3 years to become No.1
btw – and they only got one model vs 100+ Nokia’s…hilarious:)

 Reply
zato Wednesday, October 22 2008
FINNSENSE wrote: “I agree but it’s worth pointing out that a lot of people who use Apple
products act like cult members. They are completely obsessive and impervious to reason. Apple
could put out a toilet roll made of sandpaper and they would buy it – because it’s Apple.”
and: “If Apple devotees ever grow a brain, Apple might be in trouble. Its products are fine but
they are closed and they’re over-priced. Apple should be seen more like Microsoft.”
A propagandist creep from NOKIA, no doubt.

 Reply
vinnie mirchandani Wednesday, October 22 2008
can you imagine how many more it would sell if it did not have the AT&T (and other telco) TCO
attached to it?

 Reply
Om Malik Wednesday, October 22 2008
@Allen
You might want to read this post of mine from the past. http://gigaom.com/2008/06/24/symbian-
iphone-the-new-mobile-reality/ and this one http://gigaom.com/2007/06/12/5-ways-iphone-will-
change-the-wireless-biz/
they should give you answers. i actually made some observations then and I think they still hold
true.

 Reply
Om Malik Wednesday, October 22 2008
@vinnie mirchandani
I agree and that is why I still use Blackberry most of the time.

 Reply
Thomas Wednesday, October 22 2008
Seriously you’re gonna have to change the name of this blog to the Apple Suckup Blog. You
never post anything critical of Apple and the only time you mention Windows Mobile (ya know,
that mobile OS that has more features, more market share and more phones than Apple) is when
you lie to make them look bad. It’s not reporting, it’s sucking up.

 Reply
Finnsense Wednesday, October 22 2008
“A propagandist creep from NOKIA, no doubt.”
I said in an earlier post my next phone might be an iphone. You probably missed it because you
were too busy in the bathroom with your macbook. ;)

 Reply
jaggs Wednesday, October 22 2008
So Apple didn’t make its 10 million sales target for the year after launch then?
That’s very interesting…!

 Reply
Paul Wednesday, October 22 2008
Max – Not sure where your 15 million/quarter figure comes from for Nokia, but they sold 435
million phones last year, more like 35 million per month. Apple still has some catching up to to
do.
BTW – Om, from your headline I expected to read about causes, not symptoms.

 Reply
Glenn Wednesday, October 22 2008
One (maybe two) of the bullet points are about *how* the iPhone is a smash, not why it is a
smash. Sorry, I’m all about semantics this morning.

 Reply
pascal rossini Wednesday, October 22 2008
Iphone do all but nothing good! It’s only snobbery. I have an Iphone, I’m snob in the world of
technologies.

 Reply
michaelportent Wednesday, October 22 2008
Dang. T-Mobile’s Android phone has its work cut out for it. I can’t go 10 minutes in Seattle
without seeing an iPhone. Meanwhile I *just* saw the first Android phone in the wild today.

 Reply
Charbax Wednesday, October 22 2008
That’s 10 million people who will look pretty stupid when they see how superior the Android
phones are.
Beating LG in revenues is really not that hard, especially when you see how the iPhone revenues
should be considered fraud at over $1500 per phone including the basic 2 year subscription, for a
phone that barely costs $150 to manufacture.
Android is going to take over quickly by a factor of 10 to 1. Cause you are going to be able to
buy unsubsidized unlocked Android phones at $150 pretty soon, that also will be data-centric
running VOIP and IM on free White Spaces and HSDPA instead of crappy expensive voice and
sms plans.

 Reply
lj Wednesday, October 22 2008
Had an iPhone and it was stolen while on a trip. I spent two hours being angry that someone had
stolen something from me and twenty hours laughing because now the piece of crap was
someone else’s problem and I could upgrade to a phone that could actually do something besides
look at itself in the mirror and say “I’m pretty.”

 Reply
Allison Wednesday, October 22 2008
I love my iPhone. It changed the way I use a mobile device. Before, I had an LG phone that was
a phone and txt device (with a crappy camera), and for work I had a Blackberry, which was an e-
mail device (with a crappy phone). The Web function on the Blackberry was unusable for regular
surfing.
My iPhone is my phone, my datebook, my stock-checker, my weather guide, my car map, my
regular-use Web browser, my e-mail client, my camera and much more. It FREES me from my
PC for all purposes except writing papers etc. Sure, not all features are perfect (I’d love a higher
res camera), but so many are so damn close that, at least for me, the iPhone changed everything.
I could NEVER go back to my old cell phone ever again.
I also like the fact that the iPhone has spurred a new round of innovation from the rest of the
players. I don’tparticularly care if Apple wins or not, but they certainly have awoken a sleeping
giant that was almost comatose.

 Reply
jhn Wednesday, October 22 2008
@jaggs, Apple has already beat the 10 million projection, with 2 1/2 months to go in the year.
Android is not going to be a threat until they can make using them as pleasant as using the
iPhone.
The problem with techies is that they have no sense of ease of use, aesthetics, or grace. I am a
techie and I didn’t “get it” about Apple until a few years ago. Features, “openeness,” — no one
gives a hoot except you guys. Real people want devices that do their intended function elegantly
and well, not devices that satisfy some bullet points.
Also: people don’t want choice, even though they will always say they do. Put that in your pipe
and smoke it.

 Reply
Intosh Wednesday, October 22 2008
Meanwhile AT&T missed analysts’ estimates due to iPhone’s heavy subsidy. Mactards are not
the only ones screwed by the Apple tax. LOL.
$4.6 billion in revenue divided by 6.9 million units means $666.67 per iPhone. So, this in turn
means AT&T gives Apple ~400$ for each iPhone sold.
So now that all Apple fanboys have their iPhone, who will Apple sell it to in order to reach 3
times more units shipped and hit the $12 billion in revenue, a number that Nokia hits
consistently?

 Reply
jaggs Wednesday, October 22 2008
@jhn: 12 months from launch was July 2008. They sold 6m in last quarter July/Aug/Sept, to get
to 13m, so they didn’t make the 10m in 12 months from launch.

 Reply
Max Wednesday, October 22 2008
Paul, Nokia sold 15m smartphones in that period. They call them their “converged mobile
devices” in the accounts, but it basically means the N and E series phones. So 15m phones with
nice margins. Almost all of the other phones they sell (the other 90m) are low end models that
contribute little to the bottom line.

 Reply
brian Wednesday, October 22 2008
I totally agree. all phones have their cons…but for Apple iphone…who cares. this device is by
far the most revolutionary phone ever invented by any one.
http://www.livbit.com

 Reply
John Woods Wednesday, October 22 2008
I have had my IPhone 3G for a week now. I went from a BlackBerry Curve. My only main
concern was I could not tether to my Laptop with the IPhone but let me tell you I absolutely
LOVE it. I just cannot get enough of it. No doubt the coolest phone I have EVER had. The
battery life is short so make sure you carry a car charger.
Jiff
http://www.internet-privacy.pl.tc
 Reply
Katie Wednesday, October 22 2008
The iPhone has its glitches but for the time its been out (not that long), it represents an amazing
leap of technology, which I think we are all now taking for granted as the Google/T-Mobile G1
phone makes its debut today with almost a yawn.
The iPhone was the first and will probably continue to be the leader.

 Reply
Steve J Wednesday, October 22 2008
Here are steps to get one of these iPhones for FREE!
http://www.squidoo.com/free16gbiphone3g

 Reply
aka Christian Wednesday, October 22 2008
@jaggs
Apple actually announced their goal was to sell 10 million phones by the end of 2008, not one
year after launch. As usual, they were conservative with their guidance.
@Charbax
It’s funny to me to read that the phone will cost “over $1,500 per phone including the basic 2
year subscription.” It makes it sound like any other phone you buy has free calling and data
plans. If you know of a company offering that, please enlighten me. I pay $60.00 per month for
my two-line service with Sprint, with no data, just voice and voicemail. That’s $1,440.00 over
two years. If I get an iPhone, and I plan to, I will pay more than $1,500.00 over two years, but
not a helluva lot more, and I’ll be GETTING a lot more than I get with my basic old Sanyo
phone. Admittedly, that would be for one line, not two, but my wife has no interest in an iPhone,
preferring basic calling and voicemail and will pay for her own service through her own
business. So my monthly payment will barely increase but I’ll have a powerful, multifunction
tool instead of just a cell phone. In other words, try a different line of FUD. AT&T’s plans are
about on par with those of other carriers. The iPhone is superior in many, but not all, ways to
most other phones. Sure, I wish it were unlocked. I wish it had a camera in front for iChat or
Skype video conferencing. I wish it had a removable memory card. Wish in one hand and spit in
the other and see which one fills up first.
iPhone is currently the gold standard in phones. Don’t like it? Don’t buy one. But don’t spread
FUD.
 Reply
Comic Book Guy Wednesday, October 22 2008
None of your bullet points are reasons why the iphone is a hit. You are describing its success
with each.
Worst article ever.

 Reply
Tom Wednesday, October 22 2008
Nokia Smartphone sales:
Nokia sold 8 million N Series and 3 million E Series phones in the last quarter. They’ve said as
much in their fiscal report. That’s 11 million smartphones for Nokia, and Apple compares quite
well to that with about 7 million iPhones.

 Reply
firedward Thursday, October 23 2008
Very good point. But people still do not like to be bound by such binding laws.

 Reply
Charbax Thursday, October 23 2008
Christian, if you like getting screwed by carriers, have fun with that.
I find it scandalous that carriers make over $1500 of revenues per user that they sign up. That
should be considered fraud, and in fact in some countries like Denmark that have consumer
protection laws it is fraud.
The devices cost less then $150 to mass manfucatrure. Signing people up for $1500 contracts is
ridiculous. If you think that’s normal have fun with that.
I pay $8 for my unlocked mobile phone, that has much better battery life for voice calls then the
iphone, and which works on cheap pre-paid plans.
The iphone is a fraud. A bunch of idiots get all excited about giving their money away to big
coorporations for a big lie of a phone device. Why do you need such a big screen on your phone,
it is useless.

 Reply
chirax Thursday, October 23 2008
Its $800 in India, so I guess we still have to be awed by iPhone en masses.

 Reply
thumthug Thursday, October 23 2008
The time has come for AT&T and Apple to release the power hold. We are a mobile gaming
portal that offers mobile phone games for iphone and other mobile devices and it is hard for us to
compete in the iphone gaming market the same way we can and have been doing successfully in
the regular cellphone gaming and free mobile games (ad driven) world. Bring on Google
Android, it should be a GAME changer. http://www.thumbthug.com

 Reply
notedscholar Thursday, October 23 2008
Your reasons seem to be mainly capitalist. Just because Apple sold a lot of iPhones doesn’t mean
it is good. The Holocaust was also popular in Germany – doesn’t mean it’s good. So long.

 Reply
Nella Thursday, October 23 2008
Nokia rules…Iphone is for kids.

 Reply
Sean Thursday, October 23 2008
It is still amazing to look at Apples transformation over the past 2 decades. Steve has proven
himself as the CEO and Apple is a revolutionary. The IPhone is only the beginning.
Sean

 Reply
Zibri Thursday, October 23 2008
There is an 8th reason:
Commodore doesn’t sell the C64 anymore :)
 Reply
Alex Quintana Friday, October 24 2008
Umm, The non-deceptive title of this article would be “7 pieces of proof why the iPhone is a
smash hit”
because NONE of those are reasons WHY, they simply are evidence backing up the fact that it is
a smash it.
I thought you were actually going to list the 7 things the iPhone can do that made it a smash hit.
BAH

 Reply
otomasyon Friday, October 24 2008
when you buy iphone it is a phone but when you do jailbreak it becomes iphone

 Reply
Baby Saturday, October 25 2008
I agree with the sentiment that it’s innovative and user focussed which is why it sells so well.

 Reply
gordon Saturday, October 25 2008
These are statistics supporting that it is a hit. They are not reasons why it is a hit. the title is a
misnomer.

 Reply
Wifiguy Sunday, October 26 2008
The iPhone is just a great awe inspiring device. For those folks who love surfing the web it’s
crack cocaine. The beauty of the iPhone is also the durability of the screen. It doesn’t scratch and
looks new for the duration you own the device.

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bunny Monday, October 27 2008
its must be a great hit into the market.iPhone combines three products in one — a revolutionary
phone, a widescreen iPod, and a breakthrough Internet device with rich HTML email and a
desktop-class web browser.and lot more.well its a device of exclusive specification.

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Charly Monday, August 24 2009
So is the Ipod all that it is made out to be? Im torn between getting three phones, the iphone, LG
Cookie and Blackberry? Any suggestions on what the best one is to get?

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Paul P. Thursday, November 26 2009
The iphone has been an amazing success. But still i hope its a passing fad of this decade along
with all other virtual key board devices, I dont like how the iphone functions or its input device
(capacitive touch screen). Its not good enough to be classed as a premium phone, yet many
people think it is.
I have been tempted to buy one at times but through reviewing its features have decided its not
for me, its not even attractive.

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Carol @Jailbreak Unlock iPhone 4 Guru Tuesday, February 8 2011
Sorry for the late comment lol but I had to add my 2 cents in regards to the iPhone ( smash it)
theory.. ofcourse there is no doubt that Apple took the market and lets admit that they deserve it,
the way they market their products and the hype they create is unbelievable.. at some point it is
unethical ( from my point of view)
The way that Apple leaves people waiting inlines for months and only sell 100 phones a day so
they can keep the hype is kind of humiliating but again this is marketing.. and that is why they
are successful. I cant wait for the New iPhone 5 since I was gonna buy the 4 but decided to wait..
lets see what they will offer lol