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Summary:

Steve Jobs’ WWDC keynote, demo of upcoming Leopard and Safari for Windows may have generated a lot of oohs and ahhs, but it was towards the end that His Jobness revealed the game plan to irreversibly change the world of wireless. No one knows for sure […]


Steve Jobs’ WWDC keynote, demo of upcoming Leopard and Safari for Windows may have generated a lot of oohs and ahhs, but it was towards the end that His Jobness revealed the game plan to irreversibly change the world of wireless.

No one knows for sure how many million units of the iPhone Apple will sell – 5 or 10 million in the first year, an insignificant number when compared to over 950 million phones shipped worldwide every year. It is still not clear if and when Apple will be able to sell this device in Europe, Asia and rest of the world.

And still, it will challenge some of the conventional notions of the wireless business, take the hidebound industry by the scruff of the neck and give it a good shake. Nokia will join Microsoft and Dell in experiencing Apple envy.

“I am certain that the mobile telecoms world will count its time in two Eras. The Era BI: time Before the iPhone, and the ERA AI: time After the iPhone,” writes Tomi T Ahonen, co-author of book, Communities Dominate Brands, who believes that even media business should be very very worried about iPhone.

A true web applications platform for the mobile

“We have been trying to come up with a solution to expand the capabilities of the iPhone so developers can write great apps for it, but keep the iPhone secure,” he said. “… And we’ve come up with a very innovative new way to create applications for mobile devices… it’s all based on the fact that we have the full Safari engine in the iPhone. And so you can write amazing Web 2.0 and AJAX apps that look and behave exactly like apps on the iPhone, and these apps can integrate perfectly with iPhone services.” (Steve Jobs keynote at WWDC via Engadget.)

Charles Ying thinks that Apple just reinvented the mobile applications platform. “This isn’t mobile Flash, mobile Java, or even the mobile Web. It’s the real Web, the real deal,” he writes. (True web should also mean 3G and not pokey EDGE connections that the device currently offers, one major Achilles heel of this device.) The ease, with which developers can develop and deploy apps on both web and the phones, will put pressure on other companies (and OS vendors) to play catch-up or lose developer attention.

Break the Wireless Walled Gardens
iPhone is fully functional iPod, with full tracks of music. Do you need to download ring tones for $2.99 a pop, when you get a full song for a third of that price? Ditto for Wallpapers, and themes, and everything else that is being sold on the carrier deck.

Shift of control to the customers

If the embedded (Safari) browser if it performs the way as hyped by Jobs & Co., will give us the choice-control we have on the web. Search engines to web sites – nothing will be determined by the wireless carriers who have thus far done nothing but create barriers between what we want, and giving us what they want to sell.

Slow demise of subsidized, boring phones filled with bloat ware

The introduction of the unlocked iPhone will do two things – it would basically get US buyers savvy to the idea of buying full priced unlocked phones. Secondly, it is going to cause a behavior change – of buying phones instead of freebies. (Will iPhone save the handset business?)

Keep it simple or else

One of the lasting (at least for me) changes that iPhone will bring to the mobile market is simplification. Their new user interface is going to make complex mobile services relatively simple, and can have the same impact as Blackberry had on the corporate market.

Photo courtesy of Engadget

  1. The ‘real web’ is certainly the clutch feature in the iPhone’s arsenal- and once again their distribution of a development ecosystem is as strong as anyone’s. Redmond will have a tough time moving a proprietary mobile silverlight in the face of the Safari apps which will probably work in Firefox and Opera as well.

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  2. Interesting post. Makes me courious about the things to come with the iPhone.

    Until now I am quite happy about the liberties my Nokia E61 gives. It already feels like a small computer where I can install the applications I like. But there could be more of them.

    I very much like the idea that my phone could behave the same way as my computer because they use the same browser.

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  3. Yawn….

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  4. This of course assumes that the mobile carriers will all simply hand over the keys to the castle, right?

    The iPhone will be fantastic (well, the 3rd version anyway), but it’s a bit far fetched to think that the carriers will give up and just be dumb pipes.

    Think about what a fully open browser with AJAX would do.

    1. SMS revenues would be cannabalized by a resurgance of web based IM style applications. In the sender pays model of SMS, it would become free due to web based SMS services.

    2. XSS attacks, on your phone. This will go over really well! Keep in mind the massive amounts of data that could be pushed through even a simple AJAX bug. The carriers data networks are not exactly resilient.

    3. As this post says, a total lack of carrier control. If you have ever met with a carrier you know that they are control freaks, and are terrified of compromising the network.

    Just because someone shows them a shiny iPod with a microphone doesn’t mean they are going to roll over.

    I’m sure I’ll still buy one eventually, but lets not get ahead of ourselves, shall we?

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  5. “Search engines to web sites – nothing will be determined by the wireless carriers who have thus far done nothing but create barriers between what we want, and giving us what they want to sell.”

    well put, couldn’t agree more.

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  6. Well, I think that the real barrier is indeed the wireless telephony providers but not in the sense that they promote what they want to sell (instead of what is or the users find interesting). What’s killing almost all mobile phones potential (the iPhone being no exception) is the cost for accessing the web through the provider. The key factor is that providers have huge infrastructure (cf investments) in place and they will not give away their control over them – as people have already mentioned. So that can pretty much exclude a large fraction of ‘openness’. Even, if we the users can put up with this, it’s probably too much to ask of to access the net when we know that every minute spent online on the phone ‘bleeds’ us. And it’s only so much that can be done using telephony packages such as “x MB of online transfer using your phone for y USD/mnth”. The wireless capabilities of iPhone are quite something but still limit it if access to the internet is crippled.

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  7. @Todd,

    The mobile carriers are already “dumb pipes”. Their value is the voice and SMS service.

    Their content offerings pale versus market offerings, and have higher prices. Ultimately, market forces will tear down their walled gardens in the same way that market forces tore down AOL’s walled garden.

    If they focused their efforts on their communication technologies we wouldn’t suffer through poor quality voice and data connectivity. The carriers would also be much more than dumb pipes if they drove innovation in their core technologies instead of positioning their services as entertainment hubs.

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  8. It’s too bad that the iPhone can’t help (encourage? force?) the carriers to open their pipes. Think of how ridiculous it is to pay additional fees to send text or pictures. They want to charge for airtime? That’s fine (and necessary). But why tack on additional fees for services that use the network? We wouldn’t put up with it for Internet access, even in the dial-up days.

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  9. Om, regarding “reinvention of the mobile applications platform”, not quite yet. I could see that in later version, sure if there’s a proper SDK someday. But for now: “No iPhone SDK Means No Killer iPhone Apps ”
    Great analysis really worth reading–
    http://gizmodo.com/gadgets/fast-and-furious/no-iphone-sdk-means-no-killer-iphone-apps-267899.php

    Let me know what you think. Many software developers want to do more than Ajax in a browser-based rendering engine. They want hooks into native to do real 3rd party app innovation.

    I agree with the rest of your points, most notably the huge shift users will now have in higher expectations for gorgeous UI and user experience simplicity/delight.

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  10. Dear Om and readers of Gigaom

    Good posting. Wanted only to correct the number you quote. The annual sales volume of mobile phones is not in the 700 million range. Last year they sold 950 million (sources: Gartner Dataquest, Informa, etc) and this year its likely to be over 1 billion mobile phones.

    Notice the scale, worldwide there are about 800 million PCs total installed base; 850 million cars on the roads; 1.3 billion fixed landline phones total in use around the world. Yet the mobile phone industry ships a billion phones this year alone.

    Thanks

    Tomi Ahonen :-)

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