FUD Alert: Analyst – I am pretty skeptical Apple’s iPhone can succeed

“Apple has finally announced its long-rumored iPhone. True to the Apple ‘i’ tradition, the iPhone is filled with features and touts an innovative interface more akin to a kiosk or video game than a telephone… Can it succeed? Frankly, and contrary to the reactions of Apple fans and the stock market, I am pretty skeptical. I don’t think this device will meet the fantastic predictions I have been reading. For starters, while Apple basically established the market for portable music players, the phone market is already established, with a number of major brands. Can Apple remake the phone market in its image? Success is far from guaranteed,” Jack Gold, founder and principal analyst at J.Gold Associates, writes for Computerworld.

Gold writes, “Why am I not impressed? First, making an entertainment device is much different from making a phone. Over the years, plenty of phones offering lots of nice ‘toys’ for users have disappointed. Ultimately, they were not very good phones. And the bottom line is that you have to build a good phone first, and then add features on top of that.”

Gold writes, “Another difference between phones and entertainment devices is that phones must be much more rugged and less prone to breakage while being subjected to all kinds of abuse. Can the iPhone take such abuse without a high failure rate?”

Gold writes, “The price is steep. Yes, I understand that the astronomical list prices of $500 and $600 are simply initial inflations meant for the early adopters willing to pay almost anything (and to limit volumes while Apple ramps up to catch up to demand). But even if the prices were cut in half, that is hefty for a phone device these days, even one with loads of features.”

Gold writes, “Who is the target for this device? At $300 to $400 (assuming the price falls rapidly), an iPhone clearly is not a casual buy. In the past, most high-end phones have been sold to business users willing to pay for a fancy phone with the capabilities they wanted. But these users almost universally demand connectivity to corporate systems, especially through push e-mail and Outlook integration. How well the iPhone does at integrating to these systems remains to be tested. And although I would bet the iPhone will integrate and sync well with the Mac, very few businesses run on Macs.”

Gold writes, “The device runs the Mac OS. This is a major constraint, since few third-party application vendors (e.g., Good Technologies for a push e-mail client) run on the Mac… Apple will likely have a tough time convincing application vendors to build specialized clients for the iPhone until the volumes are there, and the volumes could be limited by the lack of third-party applications – a Catch 22.”

Gold writes, “So, will the iPhone succeed? At some level, yes, given the cachet that the Apple brand carries and the company’s base of loyal fans. But Apple has a lot of questions to answer… My advice: Unless you are a die-hard Apple fan, wait a few months to see how this all shakes out, especially if you want to employ the device as an adjunct to your business. Find out how good a phone it really is and how well it connects to the world you live and work in before spending the high price for what could ultimately become an orphaned, stand-alone music player.”

Full article here.

[Thanks to MacDailyNews Reader “King Mel” for the heads up.]
Has Mr. Gold even watched Steve Jobs’ keynote and seen the iPhone demonstrated? Ultimately, Mr. Gold’s advice to “wait a few months to see how this all shakes out” coupled with his threat that Apple’s iPhone “could ultimately become an orphaned, stand-alone music player” just doesn’t smack of FUD, it is the very definition of FUD.

Related article:
The massive FUD campaign against Apple’s iPhone ramps up – January 10, 2007


  1. I actually agree. There remains a lot of questions to be answered. I think developers are going to be hoping that this is a new platform for them to release their products for. At the moment, it doesn’t seem to be leaning this way to keep that closed system environment for the highest level of consistency. Connecting with Exchange networks is crutial while outlook isn’t whatsoever if they are looking to make this a practical “smartphone” or at least corporate tool.

    Battery life I think will be an issue as well. I’m buying an iPhone, but I’ll be waiting for a 2nd or even 3rd generation before I commit to it’s gloss and impressive features.

  2. Remember all the “MORONS” who were parading around, predicting doom and gloom for Apple after the iPOD Mini was announced?

    “It is priced way too high, no one would ever buy one of those, blah blah blah…”

    The iPHONE nay sayers will be eating just as much crow as the moronic iPOD Mini nay sayers did.

    No matter how cool a product is, there will always be that handful of envious losers who have to try and piss in everyone elses corn flakes.

  3. He’s shortsighted that’s all, and he’s not alone of course.

    Just look what morons predicted iPod was set to fail..and you get the picture.

    The proof is in the buying. Count me in x5.

    And just imagine when we can ditch landlines and use VOIP and WiFi for 80% of all it’s activity!

  4. “Gold writes, “The device runs the Mac OS. This is a major constraint,…”

    Jaysus,,,how many freakin e-mail apps do you want on a phone,? How many browsers, calculators? What a major league, uninformed FUD spewing, dork.

    Oh yes, please give me Versamail and the Palm internet browser. What? There are not a zillion apps some of which are a better email or browser client?

    I suspect he uses a Fisher-Price phone (with BIG numbers on it)

    Sigh….beam me up Scotty….NOW!

  5. Oh, and by the way, I paid $500 for my Palm Treo 700p about 6 months ago with a 6 month contract. I hate it. It picks up so much background noise that the people I’m talking to can’t hear me. I find the internet portion of it to be completely unuseable. I intend to drive over it on my way home from picking up my iPhone. I’m canceling my contract early and paying the damn fee.

  6. I see opinions such as these as bellwethers of fantastic success. You may recall, the iPod mini was way too expensive and didn’t offer enough features when it was first released, and look what happened to it. I believe the same sorts of things were said about the original iPod, too.

  7. Re: Apple has finally announced its long-rumored iPhone. True to the Apple ‘i’ tradition, the iPhone is filled with features and touts an innovative interface more akin to a kiosk or video game than a telephone…

    Didn’t Stevie say the “Killer App” (god I hate that term), is MAKING PHONE CALLS!

  8. I agree with this guy to some extent…The software is closed – so you have to wait for Apple to release a “widget” that might come in handy. Secondly, Apple tends to wildly exaggerate battery life, so if they say 5 hours – I take it with a grain of salt and wonder – what if it is something miserable, like 2? Thirdly, how can it be an ipod replacement with only 8 Gigs of memory? If I were going to spring 600 bucks on a “convergence” device, I would want something that would actually replace my ipod – all 23 gigs of my music. I mean, it is widescreen with brilliant video – but only 8 Gigs? Perhaps as a nano replacement it works… Lastly, if I so much as glance at my ipod screen, it scratches – hopefully it is more smudge-scratch proof than it seems…

  9. MDN, pursuant to SteveJacks caution for FUD articles, I think you guys should number these iPhone FUD Alerts… This being #1 just to see how many we accumulate, heck we can even put them on a graph and watch the accelaration curve as we approach the June launch.

    What do you guys think?

    MW: Keep – keep’em coming!

  10. Oh – let me re-emphasize BATTERY life. Without a user-replaceable battery, it has to have some good battery life unless you want to be saddled with a charger at home, work, car, etc… It seems a little contrary to the Apple “Think Different” mantra to be locking people into service with Cingular as well with a 2 year contract…

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