Yankee Group’s Howe: Seven overlooked iPhone 3G details (incl. in-store activation required in US)

“The blogging world is abuzz at Apple’s new $199 iPhone 3G, with most writers (including Yankee Group) bemoaning the lack of surprises in Steve Jobs Keynote,” Carl Howe blogs for Yankee Group. “But my analysis of the press releases that came out after the event actually produced more surprises than I would have expected, including:”

1. More upfront payments to Apple in exchange for no subscription payments.

2. In-store activation required in the US. Apple pioneered do-it-yourself phone provisioning through iTunes last year. Sadly, ATT has forced Apple to drop this unique feature, now requiring in-store activation of the phone, presumably to ensure that it earns back its iPhone subsidies from subscriptions. This has two significant implications: 1) Apple can no longer sell its phone online through the Apple Store, and 2) anyone waiting in line on July 11 for a phone should expect to wait hours longer as people buying phones each wait 10-12 minutes for in-store activation. This is one of the rare circumstance where Apple has decided to degrade the customer experience to please its carrier partners.

3. Multiple carriers in some countries.

4. iPod touch is poised for a price cut.

5. Apple’s toe dip into running an iPhone NOC.

6. Multi-mode location-based services.

“The seventh and final observation I’ll make is one that was hiding in plain site during the keynote. Steve Jobs dedicated nearly 40 minutes to third-party software demonstrations during the two-hour keynote,” Howe writes. “That’s more time than any other topic received. If there’s one thing we know about Jobs’ keynotes is that he doesn’t waste time on things that are unimportant to users. By dedicating nearly 1/3 of the keynote to third-party applications, Jobs served notice that the Apple iPhone is not just a consumer device, but is Apple’s third big developer platform, following the Mac and the iPod. And while it isn’t yet a third of Apple’s revenue, just wait. It will be — and sooner than you think.”

Full article – highly recommended as usual for Howe – here.


  1. It’s coming out 7/11 for a reason. There’s TONS of time to renegotiate the in-store activation thing. I think that what we’ll see is the OPTION to pay $199 and activate it in store, or pay $499, activate the phone at home, and then get $299 credit. The in-store thing is so un-Apple.

  2. “Sadly, ATT has forced Apple to drop this unique feature, now requiring in-store activation of the phone”

    I don’t think Apple was forced too much on that one. In-store activation will reduce the number of unlocked devices. + in some african/asian countries, people don’t have easy access to credit cards. So the on-line experience can’t be easily globalized. Conclusion: drip it.

    “This is one of the rare circumstance where Apple has decided to degrade the customer experience to please its carrier partners.”

    Apple is just making its life easier on that one, trust me. This is not like buying an iMac online.

  3. Any word on SMS forwarding, MMS, or video? If not, maybe 3rd party developers will come up with those apps in the App store.

    I’m not sure its worth the upgrade at this point if it doesn’t at least have those features… I hate to say it, but I’m hoping Samsung, LG or one of those guys comes out with a serious multi-touch competitor to the iPhone to force Apple to offer atleast these basic features.

  4. Apple’s toe dip into running an iPhone NOC.

    “This was a real sleeper, but an important one for developers. Apple has refused to allow developers to run background applications on the iPhone (understandable given power and stability requirements). Instead, Apple is providing a centralized push application service that can present badges, sounds, and text alerts on any number of phones at the same time. What Apple has actually created here is a poor man’s Blackberry Enterprise Server and Network Operations Center, complete with the associated single point of failure too. It’s too early to know how much developers will embrace this service, but it in essence makes the iPhone a cloud computing client.”

  5. I think a failure in the Apple NOC will only interrupt “push” services. With a working iPhone, it should still be possible to “pull” your e-mail from wherever. Certainly this will be true for POP and IMAP; not sure what the effect will be for Exchange, but you should still be able to VPN into your corporate network and pull mail from an exchange server. When the RIM NOC fails, all blackberry e-mail dies. I’m sure yesterday’s leaked announcement of RIM building a backup center in Plano TX wasn’t just a coincidence…

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