Bloomberg writer: Apple iPhone won’t make long-term mark; will only appeal to a few gadget freaks

17 years ago

“Few products have been launched with such a blizzard of publicity as Apple Inc.’s iPhone,” Matthew Lynn writes for Bloomberg.

“To its many fans, Apple is more of a religious cult than a company. An iToaster that downloads music while toasting bread would probably get the same kind of worldwide attention.,” Lynn writes.

Lynn writes, “Don’t let that fool you into thinking that it matters. The big competitors in the mobile-phone industry such as Nokia Oyj and Motorola Inc. won’t be whispering nervously into their clamshells over a new threat to their business.”

Lynn writes, “The iPhone is nothing more than a luxury bauble that will appeal to a few gadget freaks. In terms of its impact on the industry, the iPhone is less relevant.”

Lynn writes, “There are three reasons that Apple is unlikely to make much of an impact on this market — and why it is too early to start dumping your Nokia shares.”

• Apple is late to this party: Apple will have to fight hard for every sale.
• The mobile-phone industry depends on cooperation with the big networks: Apple has never been good at working with other companies. If it knew how to do that, it would be Microsoft Corp… [also] rivals will be pulling out all the stops to prevent the networks offering iPhones.

MacDailyNews Note: We interject to point out that this seems to be straight out of the “talking points” we described in the article “Microsoft Zune Chief: Apple faces tough hurdles if they launch an iPod phone” (January 9). So, we suspect that Rob Enderle, Microsoft Zune Chief Robbie Bach, and Bloomberg’s Matthew Lynn are all reading from the same memo. If Apple doesn’t work well with other companies, how the heck did they get the entire music industry to join them on iTunes Store digital downloads? Imagine all of the negotiations, agreements, and paperwork required to get all of those partnerships worked out!

Lynn’s third reason that Apple is unlikely to make much of an impact with iPhone:
• iPhone is a defensive product: It is mainly designed to protect the iPod, which is coming under attack from mobile manufacturers adding music players to their handsets. Yet defensive products don’t usually work — consumers are interested in new things, not reheated versions of old things.

Lynn writes, “In many ways, that is a shame. The mobile-phone industry is becoming a cozy cartel between the network operators and a limited range of manufacturers. It could certainly use a fresh blast of competition from an industry outsider. It may come — but… it won’t come from the iPhone. Apple will sell a few to its fans, but the iPhone won’t make a long-term mark on the industry.”

Full article here.

[Thanks to MacDailyNews Reader “Ballonknot” for the heads up.]

We have noted Lynn’s comments for future use, whether it be pro or (most-likely) con.

Dvorak on Apple iPhone: ‘I think Apple can do wrong and I think this is it’ – January 13, 2007
USA Today writer: Apple iPhone is an ‘ordinary, average product’ at heart – January 12, 2007
FUD Alert: Analyst – I am pretty skeptical Apple’s iPhone can succeed – January 11, 2007
The Register’s Ray: Apple ‘iPhone’ will fail – December 26, 2006
Analyst: Apple iPhone economics aren’t that compelling – December 08, 2006
CNET editor Kanellos: ‘Apple iPhone will largely fail’ – December 07, 2006
Palm CEO laughs off Apple ‘iPhone’ threat – November 20, 2006