Wifi, not telecoms helped the iPhone win
This interview/discussion is a debate on the history the iPhone and its revolutionary change to the Internet.
Firstly, my background. I was working in Telecoms at the time at a large telco in an R&D center that was focused on looking at what was coming (yes, it was a cool job!). I also had a personal interest in the topic (I’m one of the first generations of people to start online as a teenager and grow up online from the mid 90’s). Similar to the speakers on the video, I’d been playing with Palm Pilots, Handsprings, Sony Ericsson (remember the glorious P900 series!) and Windows CE devices (lets try not remember those….) for years prior. As part of my telecom role, I also swapped out the handset I had every 4-6 weeks to make sure I saw every and all device: all the latest Nokia’s, Sony Ericsson, Samsung, etc. I also had an unlimited data plan at the time which meant I got to test every - every! - app that was out there (not many in 2005-2006). By and large, it was all junk, built on Symbian and on top of a phone that was trying to do more. And I should note that by ‘unlimited data’, it means exactly that unlike the term that until recently meant ‘unlimited so long as you don’t go over a certain amount’)
Like many though, you could see the potential in these handheld devices and knew someone would get it right eventually. Of course, what it transpired was they were approaching it from the wrong direction of a phone, and not a computer…..
However, it wasn’t any of those that made me certain the iPhone was a game-changer. It was this device:
Archos 604 Wifi with docking adaptor attached to allow it to be connected up via USB to an external hard drive (to save on storage space).
That device is an Archos 604 Wifi. and here’s a close-up of the home screen, right. Music player, video player, a web browser, video/camera/mic recording and a file browser, all via a touchscreen. Does the format of the touchscreen look familiar?
I finished my role with the telco at the end of November 2006 to go traveling and was looking for a device to bring so I could blog, play music, etc. None of the phones supported what I wanted so had expanded my horizons to laptops. Too heavy at the time, I then expanded my horizons further, ending up on this company Archos. What made the difference was, and I didn’t fully appreciate it at the time, data plans were exorbitant at the time (and particularly relevant for me, I was going to be traveling internationally which was even worse) and WiFi was beginning to become ubiquitous. And it hit me, I didn’t need a mobile phone, I wanted a mini-computer, purchasing this device as I left. Sitting in Thailand, I remember reading the iPhone launch announcement on this device in an Internet cafe and realizing this new iPhone would be an absolute game-changer - because it had what looked like a GREAT web browser, and wifi. At the time, app stores were useless and the era was going online via computers on home internet, just as it started to move to ‘broadband’ speeds.
Apple’s genius was recognizing the need to remove bill shock - many of the original iPhone plans came with unlimited data plans. And they meant ‘unlimited’ in the truest sense, unlike many other unlimited data plans of this time.
Let us be clear - the telecom operators didn’t have the vision of what was possible from a handheld computer. Most in telecoms at the time, (even now?) were coming from the telephony era and therefore all basis came from that perspective: voice calls and messaging were the money-makers. And anything that ran over data was to be controlled and restricted: at the time, telcos were very focused on not ‘just becoming pipes’ and wanted a slice of every service.
On top of this, the handset makers of the early 2000’s were all coming from the telephony world, not from the computer world. And as famously described, “PC guys are not going to just figure this out. They’re not going to just walk in”. Ben Wood is very correct in the above video that initiated this post: Apple came in selling a computing device, not a telphone. And while many of the people in the Motorola’s, Palms, and of course, Nokia all had a great vision of what was going to occur, you could see that the businesses were still focused on building out from the telephone whereas Apple took a computer and worked back to a telephone.
For a more in-depth discussion on this, I highly recommend ‘Smartphones and beyond: Lessons from the remarkable rise and fall of Symbian’ from one of the co-founders of Symbian itself, David Wood.
Initial reaction to Apple’s iPhone, within Symbian’s licensee base, followed the above pattern. “It’s just marketing spin” was a commonly heard complaint. “Users are being fooled by Apple mania” was another grumble. Indeed, on a feature-by-feature comparison, Symbian devices beat the iPhone hands-down. The initial iPhone lacked 3G support, MMS (multimedia messaging service), sending text messages to multiple recipients at the same time, and forwarding text messages to new recipients. It didn’t even have a clipboard, so users couldn’t copy or paste information from one window to another. There was no multi-tasking. The camera had derisory quality. Indeed, there was no front-facing camera. And the only programming languages available to developers were web-based ones – there was (at first) no provision for native applications. Yet the iPhone was generating huge media attention, to the consternation of managers of Symbian device programmes, who wished that a similar amount of media attention would come to their products instead. The analysis I heard at the time was frequently superficial: “the media is being misled by Apple marketing hype”. Hence the distaste for marketing. But that distaste was misplaced. The iPhone made up for its many omissions and shortcomings with a series of innovations that amply compensated, for the segment of the potential purchasers that Apple decided to target:
- Its mode of operation was very easy to learn – hence the proclaimed “enchanting ease of use” and “great user experience”
- The UI had been carefully designed with finger use in mind, rather than pen interaction; the “pinch to zoom” metaphor was quick to grasp
- It provided one particular application – a web browser – that particularly captivated end users, who found it was satisfyingly quick to browse to popular websites
- Apple had formed key relationships with a number of network operators, who agreed to a revolutionary business model: the devices would be bundled with an “all you can eat” data usage contract, avoiding any fear from users that they would be subject to unpredictable high monthly phone bills
- Apple had devised a roadmap of future releases, with scope for gradually catching up disconcerting omissions in comparison to competing products; critically, forthcoming releases included plans for developers to be able to use Objective C (a language already familiar to many of them, from writing apps for desktop Apple computers)
- Apple provided an attractive offering for developers – the AppStore, with its single point of entry; the AppStore connected with the already established iTunes world, to which millions of users worldwide had already committed their personal credit card details.
In other words, Apple had thought long and hard about key needs of different people in what would become the iOS ecosystem – end-users, developers, and business partners. They excelled in what I’m calling the Market dimension of the core smartphone skillset. As it happens, Apple also excelled at other aspects of marketing, including the discipline known as “market communication”. For example, their TV ads clearly communicated to end-users some real-world examples of the functionality inside their devices (even if the videos in the ads were speeded up, and compressed some of the steps); this was in the contrast to fluffy low-content brand-association
In the case of network operator adoption of the iPhone, a variety of the above methods came into play:
- Apple’s tight control over the type of add-on application allowed on the iPhone meant that network operators were less worried about increased support costs
- Apple initially promised exclusivity, within a geographical region, to the operators who would be the first to break from the pack and agree to Apple’s terms
- Apple could point to great market interest in the early iPhone devices, including reports of sky-high data usage (reports that sometimes originated within Google, where employees noticed huge spikes in the use of Google services from iPhones, and were so shocked by what they saw that they could not help but share this news with their contacts in other companies).
In short, Apple knew how to accumulate marketing power, and to use it to even further advantage.
The Telecom Operators sell their first computer
Apple’s genius was to sell the device through telecom operators under the ‘phone’ title, even though the phone part of the device was already just an app. What they did was turn the mobile phone providers into promoters and resellers of the ‘phone’, while they were really selling a computer. AT&T saw it as nothing to lose: they were selling a minority device from a computer manufacturer, however, that computer manufacturer also made the coolest device at the time, the iPod (remember those iconic images, right?).
App Store
The app store, announced over a year later, came later and of course, revolutionized everything, enabling the countless new businesses we know today from ride sharing to social networking. This tweet showing the email on the topic is remarkable - the app store was agreed on in October, and everything for it had to be ready for January, only three months later.
How many people got to watch much of the iPhone launch from a beach? I did, on an Archos….