When Steve Jobs was bought back from NeXT in 1997, it jumpstarted Apple Computer. First the iMac, then sleek new G3 Powerbooks. Then the G4 Powerbook, MacOS X. All of these were tools which powered people who wanted to be creative with their computers.
Today we ushered in "Apple, Inc.": consumer electronics junk vendor for the MySpace generation. The computer company I loved from age 6 to age 26 has become... maker of new things to go in landfills.
If you don't get what I'm talking about, the iPhone was announced today. It's just another phone that plays music and can browse MySpace, yet Apple is betting the farm on it. It costs $600 -- with the 2-year-contract Cingular subsidy -- for a, well, smartphone just like any Motorola or Danger or Nokia or Treo handset, except with Apple hype wagon and brand name on it.
But $600. Let that sink in for a minute. That means with the applicable taxes, since cellphones are taxed at what they would cost without provider subsidy, you're looking at $700 to get out the door with one of these. I bought my wife a really nice Core Duo laptop for only $50 more than that.
Plus you're probably going to have to pay a chunk of change for data usage, even though this device is not even 3G.
Not only are they entering the market with Motorola, Nokia, Samsung and LG, all of which have tons of experience and patents for mobile technology and their own plants to manufacture this stuff (unlike Apple, who uses FoxConn et al), but with the providers themselves. Providers don't roll with phone manufacturers -- they run them. Handset makers do whatever the providers tell them to do. Vodafone even steamrolled RIM into putting a Vodafone UI on their Blackberry. If you don't play with them, your handsets don't get subsidized. And if they don't get subsidized, no one will buy them. Most people out there want a free phone.
What truly invalidates Jobs' claim that "Apple revolutionizes the phone" is that there's nothing innovative about the services to be offered. There's nothing this phone does through your cell service that you can't already do. It's completely still up to the provider, which takes a lot of this device's destiny out of Apple's hands.
Yet Apple wants to sell $6 BILLION of these phones in the next year. That's 18% of Motorola's revenue that Apple hopes to take away. Assuming these phones cost more to make than $600, or at least around that much, this is a huge gamble for Apple.
I also think it hurts their core business. The Mac is increasing its market share. It seems to be a reasonable priced machine to buy even if you're going to run Windows. Yet, as noted first by Paul Thurott and later by David Pogue, Jobs did not mention the Mac or Leopard once except to say that the iPhone runs "MacOS X" (whatever that means... a Mach kernel I guess? Does it have a boot time? Does it link very slowly at runtime like Objective-C?). Why would you want to buy a computer from a smallish company that's now only focusing on consumer electronics? Would you buy a Motorola-branded computer? How about a Nokia computer?
Where is the innovation at Apple? I think Quicktime was Apple's best innovation. They also had a lot of ideas that failed, like OpenDoc and Dylan. But what happened to the "Power to be your Best"? Is that what an iPhone does, or are we just getting new ways to send another SMS to MySpace?