iPhone Preparing to go Mainstream

The Apple iPhone has managed to accomplish a number of things in the two years since it was announced and the 21 months since it went on sale. First, it has defied many an analyst by demonstrating that a new player in the mobile phone market can establish itself, carve out a segment of the market, and profitably compete. This may not sound like much, but remember that two years ago, analysts were debating whether Apple could succeed in the mobile phone market. The arguments ranged from lack of experience, to lack of support, to lack of features, to being limited by the exclusive agreement with AT&T. Many an analyst scoffed at the idea that Apple would be able to sell 10 million iPhones in its first full year (2009): They sold 13.7 million iPhones.

According to Apple, they have sold more than 30 million devices running the iPhone OS which includes both the iPodTouch and the iPhone. They have managed to do this despite lacking Flash, cut, copy, and paste, and MMS support offered by many competitors. They have managed to make significant inroads to the smartphone market during 2007 and 2008 even though they did not offer a 3G smartphone. They continue to take market share despite having a phone with questionable battery life. While many continue to decry the iPhone's lack of features, it is interesting to note how many phone manufacturers are doing their best to develop a competing product.

What analysts fail to realize (and I suspect to a certain extent Apple itself) is the iPhone has that unique ability to cut across demographics (much as the Nintendo Wii), to cut across geography (the iPhone can be found everywhere, whether licensed or not), and to cut across markets (it is a phone, a PDA, a smartphone, a netbook computer, and a device controller). Young and old are using it. Politicians, mothers, and geeks are using it. Salespeople and gamers are using it. Businesses and retired people are using it. It has single-handedly changed the view of the smartphone market.

With the iPhone 3.0 software and accompanying enhancements to its iPhone hardware, Apple is preparing to to move the device into mainstream acceptance. To do this, it must accomplish the following:

• Deliver a business-class product: With the 2.0 network and security improvements and the 3.0 applications capabilities, iPhone will rapidly become the device of choice for small and medium-sized businesses. With the introduction of external device controls (such as video recording equipment and keyboards) and additional application support (such as Documents-to-Go), the iPhone becomes a full function mobile office. Documents-to-Go support may well become the business killer app for the iPhone. This will occur this summer.

• Deliver a world-class gaming platform: With the peer-to-peer networking introduced with iPhone 3.0 software, the ability to purchase upgrades from within the application, expected graphics improvements with the next generation of device, and improvements to power management, the iPhone will truly become a world-class gaming device. When game makers develop applications that can interface across platforms (PCs, Macs, and iPhones), the killer game app will have arrived. This can be expected before the end of 2009.

• Deliver a world-class Internet browsing experience: This may be the weakest area for Apple. It is ironic that the Mobile Safari full-browser was one of the major selling points for the iPhone in its original release. The Safari browser has now become a weak point. The problem is Apple is trying to force a standard on the market and to date, the market is not buying. This is most evident with the lack of Adobe Flash support. Far too many Web sites use Flash for iPhone not to provide support. As a result, the iPhone is NOT a universal Internet Web browsing device because it cannot render a significant number of highly popular sites. Much like the lack of openness with the Apple operating systems in the 1980s, this lack of Flash support may become the Achilles heel for Apples mobile phone and services strategy. Even a poorly performing implementation would buy significant time.

You will notice that I did not include video support. The reason is that with external device support, the iPhone manufacturer ecosystem will provide that support in a small plug-and-play device that will 1) provide superior video to the built-in camera; 2) reduce battery drain on the iPhone; and 3) will provide a range of format up to and including HD. While video may be in a future iPhone, third-parties will provide superior implementations with Apple's blessing.

Thus, with the introduction of the 3.0 software, the iPhone finally goes mainstream. It will enable reporters to capture and file reports from the field, salespeople to capture orders real time in the customer's office, and anyone to work on-the-go. Oh yes, it will also make phone calls.

What have I missed? We would like to hear your ideas, comments, and input.