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iPhone – Update No. 6

Mobile phone The news of a $200 price cut on the iPhone made a lot of people quite upset, although the announced $100 rebate took out some of the sting. I think of the $200 as an early adopter tax. Everyone has the choice to wait until the bugs get worked out and the pricing stabilizes. Although the cut came quickly and was significant, such actions are not unprecedented in high-tech, especially in the mobile space. The price cut will surely accelerate demand and more users means more interest from more software developers resulting in more useful applications for all users. After two months of using the iPhone, I remain captivated with the brilliant user interface. I have also been using the iPod feature of the iPhone a lot more and find it to be superb, as iPods have always been. If a phone call comes in you just say hello, have your conversation, say good bye, and the music returns. Seamless.
The lack of an iPhone copy and paste capability remains a major shortcoming for me. Back from the lake and taking the train to New York for a board meeting quickly reminded me of how dependent I have been on the Palm Treo 700P which contained train schedules. I copied the schedules from the MTA web site, pasted them into an Outlook note and then synched the notes with the Treo. The iPhone has notes also but you can’t paste anything into them and they don’t sync with anything, making them basically useless. I am sure everyone has their iPhone wish list — for me it is copy/paste. There have been two updates to the iPhone software so far — one per month is not bad — but neither of them added any new functions. The other annoying shortcoming is that weather locations, stocks, and favorite phone numbers are not sorted alphabetically. I remain confident that Apple will step up to the shortcomings and continue to delight customers. The really big issues with the iPhone are two — the Network and the availability of applications.
AT&T, without a doubt, is the weakest part of the product. Apple touts the iPhone as the “Internet in your pocket”. This is only true if you sign-up for two years with AT&T, and if AT&T happens to have an adequate signal where you happen to be. I travel a lot on Interstate 84 between Danbury, Connecticut and Scranton, Pennsylvania and surrounding areas. Coverage is very spotty throughout. In the Connecticut town of 25,000 where I live, there is almost no coverage. AT&T calls their network "Allover". Right. When you do have an AT&T connection to their "Edge" network, it is extremely slow. Fortunately, the WiFi support in the iPhone is very good, but WiFi is not everywhere just yet (more on that in an upcoming posting). The iPhone is truly a network device and without a good network even a great device can’t do much. On the positive side, you can tell that AT&T is trying really hard to offer good customer service. Their people are courteous and responsive, in spite of the ancient backend systems and processes that support them. They call themselves "the new AT&T", but when the first charge showed up on my American Express bill it was labeled "CING*517655729 Snerocky Hill". I am guessing this meant Cingular, an account number, and Southern New England Rocky Hill (a town in Connecticut). Between that and the forty-four page bill replete with errors in the account plans I had chosen, I get the feeling the "new AT&T" is actually a collection of old companies and systems that AT&T hopes to weave into a new enterprise. Their pricing models are also antiquated. A call to Norway on the iPhone is $1.49 per minute. If you sign up for an international calling at $3.99 per month, the same call to Norway is sixteen cents per minute. International calling is surely the highest profit margin part of their business. When someone comes up with a way to enable Skype on the iPhone the obscene international rates will drop. If you work for a large company that gets a discount from AT&T you will find out that those discounts do not apply if you have an iPhone. Bottom line, the exclusive deal between AT&T and Apple may be a good deal for them but for the customer it is yet another example of reducing choice for consumers, just the opposite of what they want. A web site called “Free The iPhone” is pushing for what they call Wireless Freedom — "the freedom to use all Internet devices on any wireless network in a market that offers true high-speed Internet and real consumer choice". Some people look to government to solve this problem and others look to hackers. I would prefer competition as the solution and the iPhone is the beginning, not the end, of the race.
PalmGear.com claims to have 29,000 applications. The iPhone has just a handful — the basics — so far. I thought we would see some new apps by now but am still confident there will be many of them soon. The new applications will become available through iTunes, just like music except that the applications will likely have to be approved by AT&T, the exclusive provider of network support to the iPhone. This is analogous to finding an Internet application for your PC but not being able to download and install it unless your Internet Service Provider approves. Not good. The good news is that the iPhone will support any Web 2.0 application from the Safari browser. One application called AppMarks provides an iPhone-like menu in a web page thus avoiding the need to go through iTunes and AT&T. In other words AppMarks is providing a separate menu with an icon for each iPhone web application. The icons look just like the icons that are on the iPhone home page and you can add, delete or edit them. The larger overall question is whether the predominant application environment for the iPhone will be a locked down proprietary thing controlled by Apple and AT&T or whether it will be more like an open web environment. I expect to see a lot more clues on this in the weeks and months ahead and hope to be pleasantly surprised.

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