Wednesday, June 27, 2007

iPhone: The Reviews are in and it's a Hit

Yesterday media reviewers were finally allowed to post their writeups of their testing time with the iPhone, and overall the reviews are positive. While the iPhone isn't without it's shortcomings, it IS a 1.0 product so that's to be expected I guess. Overall, there are few surprises, which, considering the hype is GREAT for Apple.

Walt Mossberg et al starts out almost gushing over the thing:
We have been testing the iPhone for two weeks, in multiple usage scenarios, in cities across the country. Our verdict is that, despite some flaws and feature omissions, the iPhone is, on balance, a beautiful and breakthrough handheld computer. Its software, especially, sets a new bar for the smart-phone industry, and its clever finger-touch interface, which dispenses with a stylus and most buttons, works well, though it sometimes adds steps to common functions.

David Pogue at the New York Times is also really positive:
The phone is so sleek and thin, it makes Treos and BlackBerrys look obese. The glass gets smudgy—a sleeve wipes it clean—but it doesn’t scratch easily. I’ve walked around with an iPhone in my pocket for two weeks, naked and unprotected (the iPhone, that is, not me), and there’s not a mark on it.

But the bigger achievement is the software. It’s fast, beautiful, menu-free, and dead simple to operate. You can’t get lost, because the solitary physical button below the screen always opens the Home page, arrayed with icons for the iPhone’s 16 functions.

So how is entry with the "virtual" keyboard? For both reviewers, it's a non-issue. The Mossberg Solution:
The iPhone's most controversial feature, the omission of a physical keyboard in favor of a virtual keyboard on the screen, turned out in our tests to be a nonissue, despite our deep initial skepticism. After five days of use, Walt -- who did most of the testing for this review -- was able to type on it as quickly and accurately as he could on the Palm Treo he has used for years. This was partly because of smart software that corrects typing errors on the fly.

David Pogue:
...the instructional leaflet encourages you to “trust” the keyboard (or, as a product manager jokingly put it, to “use the Force”). It sounds like new-age baloney, but it works; once you stop stressing about each individual letter and just plow ahead, speed and accuracy pick up considerably.

Not surprisingly, both reviewers found the AT&T EDGE network to be less than stellar, but praised the ability to connect using WIFI when available. David Pogue:
The New York Times’s home page takes 55 seconds to appear;, 100 seconds; Yahoo. two minutes. You almost ache for a dial-up modem.

Some of the major and somewhat surprising shortcomings (for them, and for me) according to Pogue:
There’s no memory-card slot, no chat program, no voice dialing. You can’t install new programs from anyone but Apple; other companies can create only iPhone-tailored mini-programs on the Web. The browser can’t handle Java or Flash, which deprives you of millions of Web videos. The two-megapixel camera takes great photos, provided the subject is motionless and well lighted . But it can’t capture video. And you can’t send picture messages (called MMS) to other cellphones.

A lot of these things are disappointing. While it's not something I'd use that much, video capture I figured would be a given, it was the only thing that made the whole YouTube on the iPhone thing make sense to me. Since you have no ability to capture and upload video, YouTube's only real purpose on the phone is to give you the ability to watch those stupid "skateboarding dog" videos where ever you are? Yeah that makes sense.

Pogue also mentions that a faster network is coming, but for NEW phones:
A future iPhone model will be able to exploit AT&T’s newer, much faster data network, which is now available in 160 cities.

So does that mean that our first-gen phones will be stuck with the EDGE network forever? I thought Apple said this would be a software upgrade? This is a bit troubling. Also troubling is the fact that the iPhone doesn't support SIM cards. Another interesting shortcoming is that there's also no way to cut, copy, or paste text. Hmmm. Version 1.0, just keep repeating that.

In addition to the glowing reviews from Mossberg and Pogue, there's lots of iPhone love coming from everywhere. Steven Levy reports for Newsweek:
The bottom line is that the iPhone is a significant leap. It’s a superbly engineered, cleverly designed and imaginatively implemented approach to a problem that no one has cracked to date: merging a phone handset, an Internet navigator and a media player in a package where every component shines, and the features are welcoming rather than foreboding. The iPhone is the rare convergence device where things actually converge

Levy also backs up my "why YouTube?" comment when he says "At launch, only a small percentage of the millions of video will have been reformatted to work with the phone. The fact is that YouTube without the long tail of hundreds of thousands of videos is barely worth the effort." So true.

Finally I'll add comments from USA Today's Ed Baig:
The mania over Apple's iPhone launch has created stratospheric expectations that are near impossible to live up to. Yet with a few exceptions, this expensive, glitzy wunderkind is indeed worth lusting after.

That's saying a lot. After months of hype, Apple has delivered a prodigy — a slender fashion phone, a slick iPod and an Internet experience unlike any before it on a mobile handset.

I hope to post my own review here once I have an iPhone in my own hot little hands. I'll be in line here before the 6:00 AT&T store reopening. Things I'm personally looking forward to? Good email support, visual voice mail, good syncing and the video iPod support (I haven't upgraded to a color or video iPod yet).

Read more:
Mossberg: Testing Out the iPhone
Pogue: The iPhone Matches Most of Its Hype
Levy: At Last, the iPhone
Baig: Apple's iPhone isn't perfect, but it's worthy of the hype



At June 27, 2007 9:41 AM, Blogger Eric B said...

Judging by today’s selloff, I think potential customers are starting to realize how expensive the iPhone will be. If you sign the mid-range $99.99/mo service plan after purchasing the 8GB iPhone model, that alone will set you back $3000 during the two-year contract (without any accessories)!

Here’s a few other potential hurdles that could prevent the iPhone from exceeding its already lofty expectations:

* You must be an AT&T customer to use the iPhone. With a market share of 20%, that means 80% of wireless customers must cancel their current contracts to sign with AT&T. Being a Sprint customer, I would have to pay a $175 cancellation on top of the $3000 price tag for the iPhone. AT&T’s exclusive contract runs through 2009.
* Only 4 & 8GB of hard drive space? My tiny video iPod holds 30 GB for less than $200.
* Recent surveys have shown that the majority of IT departments will not even consider the iPhone due to its PC incompatibilities & exclusive AT&T contract. That will dampen business spending & all but eliminate demand for the higher-tier contracts.

This is the ultimate “sell the news” scenario. On Jan 9th 2007, Steve Jobs announced the iPhone at the Macworld Conference & Expo. The stock has since been on fire rising 50% to $125, adding $30 billion to the company's market capitalization. Will the iPhone really hold that much value for Apple? This huge runup comes after a fantastic finish to 2006 after Apple’s stock bottomed out at $50 in October. Thus, nearly everyone holding Apple is sitting on huge gains.

Expect an Apple selloff on Friday when the iPhone is finally released. 3 similar mini-selloffs have occurred during this recent runup:

* June 26th: Apple announces 6 AT&T service plans for the iPhone. The stock drops 3% on investor concerns over the high prices.
* June 11th: Steve Jobs shows off the iPhone at Apple’s World Wide Developer's Conference. The stock falls 5% after investors saw no “surprises”.
* March 20th: Apple beats 4th quarter analyst earnings & revenue estimates. The stock falls on profit taking.

Apple’s recent success has created impossible expectations. With all the mega-hype already priced into the stock, just meeting expectations will create a selloff. I plan to sell tomorrow and buy back in a couple months. Longer-term investors need not worry because the future looks bright with Macs gaining market share & the iPods continuing their dominant foothold on the music industry.

At June 27, 2007 2:23 PM, Blogger Michael said...

Honestly, the iPhone won't be for everyone. Yeah, the cost might be "$3000 during the 2 year contract" but that's in line with other smart phones. The cost of the phone aside, and remember this isn't just a phone, it's a video iPod and an internet device, you can easily nearly match those 2 year costs with current plans. For instance, just looking at my own 2 year old phone, don't remember what I paid for it, but I already pay $60 a month for a plan that gives me a lot less. I could easily spend a similar $99 a month on a plan for this phone, which puts me up around $2400 over the two years anyway, so the initial cost is the only difference. The phone companies get you one way or the other.

This could be a "sell on news" event, happens all the time, and honestly it wouldn't surprise me, but what if Jobs is right, and there is no sell off? You haven't had one yet. Almost like you're trying to help fulfill your "prophecy" with this post.


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