FinnFreak
01-10-2007, 5:27am
Wall Street Journal - January 10, 2007
Apple's iPhone:
Is It Worth It?
http://online.wsj.com/public/resources/images/PJ-AJ443_pjAPPL_20070109181753.jpg
By NICK WINGFIELD and LI YUAN
APPLE INC.'s feverishly anticipated iPhone combines the music and video features of an iPod with the communications functions of a smartphone. The question is how many consumers will be willing to pay the hefty price for the combo.
The iPhone has a sleek design and is only 11.6 millimeters thick. A 3.5-inch screen, bigger than on most iPods, extends for almost the entire length of the nearly button-free device. Instead of the iPod's iconic scroll wheel, users will navigate through their song collections, make phone calls and perform other tasks by tapping their fingers on the iPhone's touch-sensitive screen. Users of the iPhone will make calls or type emails on a virtual keyboard that pops up onscreen as needed.
Apple, of Cupertino, Calif., has an exclusive agreement with AT&T Inc.'s Cingular, the nation's largest cellular carrier by subscriber, to sell the iPhone in the U.S. for $499 and $599 -- well above mass-market cellphones -- with a commitment to a two-year wireless plan. Although it has been on a hot streak, Apple doesn't always hit it big when it enters new markets. The company collaborated with Motorola Corp. on a phone called ROKR that plays songs from users' iTunes music collections, but it was seen by many as a disappointment because of limited storage capacity.
It's unclear if and when the prices for the iPhone might come down, as prices for electronics gear such as flat-screen television sets and video camcorders tend to do. While prices for the iPod have generally stayed in the same range over the years, consumers have been getting more features on new generations of iPods, essentially getting more for their money each time. With cellphones, the historical model has been for prices of such devices to come down quickly, with wireless carriers sometimes taking a loss on the products in order to get consumer subscription revenue.
In defense of the price of the iPhone, Apple Chief Executive Steve Jobs said in a speech at the start of the Macworld conference in San Francisco that consumers normally have to pay $199 for a comparable iPod nano and $299 for a smartphone, which would lack many of the whiz bang features of the iPhone at roughly the same price.
With Cingular, Apple developed a feature the companies described as a major innovation, calling it "visual voice mail." Instead of having to wade through voice mail messages in the order in which they were left, iPhone users will see a list with the names and phone numbers of people who left them voice messages and tap to listen the messages in whichever order they like.
There are also sophisticated sensors within the product that, for instance, adjust the brightness level of the screen to make it more legible based on ambient lighting conditions. Another sensor automatically shifts the screen-orientation of the iPhone to landscape from portrait mode when a user holds the device between two hands, which will allow users to view movies and television shows in wide-screen mode.
Initially, users will load music, video and other content onto the iPhone from their computers, not wirelessly over the Cingular network. Executives in the music industry say Apple will need to negotiate new licensing agreements with music labels to obtain rights to sell songs wirelessly on the iPhone.
In a nod to how drastically products like the iPod, iPhone and a new television set-top box coming out in February called Apple TV are reshaping the company, Apple yesterday said it has changed its corporate name to Apple Inc. after decades as Apple Computer Inc. In his speech, Mr. Jobs said the iPhone was the result of more than 2½ years of development work at Apple and positioned its importance on par with the two other biggest innovations in Apple's history, the Macintosh computer and iPod.
Mr. Jobs also said the company had worked with Yahoo Inc. and Google Inc. to bring popular Internet features like Yahoo Mail and Google Maps to the product. He said the iPhone is powered by Apple's Mac OS X operating system, which runs the company's line of computers.
All of the product's features come at a steep cost for consumers, though, leading some analysts to question how big Apple's opportunity is to tap the mass market, as it has with the iPod. Mr. Jobs said Apple was aiming to sell about 10 million iPhones through the end of 2008, which would account for about 1% of annual global shipments of cellphones.
But at $499 and $599, prices for versions of the iPhone with four gigabytes and eight gigabytes of storage capacity, respectively, Apple will be going after a fraction of the market. Toni Sacconaghi, an analyst at Sanford C. Bernstein, said cellphones priced above $300 account for only about 5% of the global market.
For its part, Cingular said it expects to attract high-end customers who are willing to pay the price of the device and for the data services the phone could offer, prices for which the companies didn't disclose. Cingular wouldn't say whether it was subsidizing the cost of the iPhone, as carriers typically do for most handsets. On average, North American carriers subsidize $70 to $90 per phone, according to research firm Gartner Inc.
Cingular CEO Stan Sigman said he was so convinced that Apple would come up with a breakthrough phone that Cingular signed a deal with Apple in New York two years ago without even seeing a product. The deal is a multiyear agreement, in which Cingular will handle customer support, billing and other chores. Through the deal, Apple is not becoming a mobile virtual network operator -- in effect, a reseller of airtime on another carrier's network.
http://online.wsj.com/public/resources/images/PJ-AJ444A_pjAPP_20070109212200.jpg
The Apple TV has a 40 gigabyte hard drive
and will be able to play video and photos
from PCs.
Apple also said its new Apple TV product, formerly called iTV, will go on sale in February for $299. The Apple TV, originally announced in September, will feature a 40 gigabyte hard drive and will be able to play video and photos from computers throughout the home.
Mr. Jobs said Viacom Inc.'s Paramount Pictures will join Walt Disney Co. in selling movie downloads that can be played on the Apple TV through the iTunes Store, providing more than 100 movies from its back catalog for download on iTunes.
To allay concerns of DVD retailers about competition from iTunes, Paramount is not including its new releases. Paramount studio head Brad Grey noted that the bulk of iTunes movie downloads so far have been library titles. Paramount's library includes movies such as "Breakfast at Tiffany's" as well as concert titles from artists like Bob Dylan and U2.
http://online.wsj.com/public/article/SB116839636912572211-k5XAtJ5N7BB_OAJd02EWBDlWtX0_20070209.html?mod=tff_ main_tff_top
www.apple.com/iphone
John - ;)
Apple's iPhone:
Is It Worth It?
http://online.wsj.com/public/resources/images/PJ-AJ443_pjAPPL_20070109181753.jpg
By NICK WINGFIELD and LI YUAN
APPLE INC.'s feverishly anticipated iPhone combines the music and video features of an iPod with the communications functions of a smartphone. The question is how many consumers will be willing to pay the hefty price for the combo.
The iPhone has a sleek design and is only 11.6 millimeters thick. A 3.5-inch screen, bigger than on most iPods, extends for almost the entire length of the nearly button-free device. Instead of the iPod's iconic scroll wheel, users will navigate through their song collections, make phone calls and perform other tasks by tapping their fingers on the iPhone's touch-sensitive screen. Users of the iPhone will make calls or type emails on a virtual keyboard that pops up onscreen as needed.
Apple, of Cupertino, Calif., has an exclusive agreement with AT&T Inc.'s Cingular, the nation's largest cellular carrier by subscriber, to sell the iPhone in the U.S. for $499 and $599 -- well above mass-market cellphones -- with a commitment to a two-year wireless plan. Although it has been on a hot streak, Apple doesn't always hit it big when it enters new markets. The company collaborated with Motorola Corp. on a phone called ROKR that plays songs from users' iTunes music collections, but it was seen by many as a disappointment because of limited storage capacity.
It's unclear if and when the prices for the iPhone might come down, as prices for electronics gear such as flat-screen television sets and video camcorders tend to do. While prices for the iPod have generally stayed in the same range over the years, consumers have been getting more features on new generations of iPods, essentially getting more for their money each time. With cellphones, the historical model has been for prices of such devices to come down quickly, with wireless carriers sometimes taking a loss on the products in order to get consumer subscription revenue.
In defense of the price of the iPhone, Apple Chief Executive Steve Jobs said in a speech at the start of the Macworld conference in San Francisco that consumers normally have to pay $199 for a comparable iPod nano and $299 for a smartphone, which would lack many of the whiz bang features of the iPhone at roughly the same price.
With Cingular, Apple developed a feature the companies described as a major innovation, calling it "visual voice mail." Instead of having to wade through voice mail messages in the order in which they were left, iPhone users will see a list with the names and phone numbers of people who left them voice messages and tap to listen the messages in whichever order they like.
There are also sophisticated sensors within the product that, for instance, adjust the brightness level of the screen to make it more legible based on ambient lighting conditions. Another sensor automatically shifts the screen-orientation of the iPhone to landscape from portrait mode when a user holds the device between two hands, which will allow users to view movies and television shows in wide-screen mode.
Initially, users will load music, video and other content onto the iPhone from their computers, not wirelessly over the Cingular network. Executives in the music industry say Apple will need to negotiate new licensing agreements with music labels to obtain rights to sell songs wirelessly on the iPhone.
In a nod to how drastically products like the iPod, iPhone and a new television set-top box coming out in February called Apple TV are reshaping the company, Apple yesterday said it has changed its corporate name to Apple Inc. after decades as Apple Computer Inc. In his speech, Mr. Jobs said the iPhone was the result of more than 2½ years of development work at Apple and positioned its importance on par with the two other biggest innovations in Apple's history, the Macintosh computer and iPod.
Mr. Jobs also said the company had worked with Yahoo Inc. and Google Inc. to bring popular Internet features like Yahoo Mail and Google Maps to the product. He said the iPhone is powered by Apple's Mac OS X operating system, which runs the company's line of computers.
All of the product's features come at a steep cost for consumers, though, leading some analysts to question how big Apple's opportunity is to tap the mass market, as it has with the iPod. Mr. Jobs said Apple was aiming to sell about 10 million iPhones through the end of 2008, which would account for about 1% of annual global shipments of cellphones.
But at $499 and $599, prices for versions of the iPhone with four gigabytes and eight gigabytes of storage capacity, respectively, Apple will be going after a fraction of the market. Toni Sacconaghi, an analyst at Sanford C. Bernstein, said cellphones priced above $300 account for only about 5% of the global market.
For its part, Cingular said it expects to attract high-end customers who are willing to pay the price of the device and for the data services the phone could offer, prices for which the companies didn't disclose. Cingular wouldn't say whether it was subsidizing the cost of the iPhone, as carriers typically do for most handsets. On average, North American carriers subsidize $70 to $90 per phone, according to research firm Gartner Inc.
Cingular CEO Stan Sigman said he was so convinced that Apple would come up with a breakthrough phone that Cingular signed a deal with Apple in New York two years ago without even seeing a product. The deal is a multiyear agreement, in which Cingular will handle customer support, billing and other chores. Through the deal, Apple is not becoming a mobile virtual network operator -- in effect, a reseller of airtime on another carrier's network.
http://online.wsj.com/public/resources/images/PJ-AJ444A_pjAPP_20070109212200.jpg
The Apple TV has a 40 gigabyte hard drive
and will be able to play video and photos
from PCs.
Apple also said its new Apple TV product, formerly called iTV, will go on sale in February for $299. The Apple TV, originally announced in September, will feature a 40 gigabyte hard drive and will be able to play video and photos from computers throughout the home.
Mr. Jobs said Viacom Inc.'s Paramount Pictures will join Walt Disney Co. in selling movie downloads that can be played on the Apple TV through the iTunes Store, providing more than 100 movies from its back catalog for download on iTunes.
To allay concerns of DVD retailers about competition from iTunes, Paramount is not including its new releases. Paramount studio head Brad Grey noted that the bulk of iTunes movie downloads so far have been library titles. Paramount's library includes movies such as "Breakfast at Tiffany's" as well as concert titles from artists like Bob Dylan and U2.
http://online.wsj.com/public/article/SB116839636912572211-k5XAtJ5N7BB_OAJd02EWBDlWtX0_20070209.html?mod=tff_ main_tff_top
www.apple.com/iphone
John - ;)