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Mac Planet: The iPhone Bomb

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Photo / AP

When the iPhone first came out, I was among those who didn't get it. I wasn't quite in the camp that maintained "Who'd want to pay an Apple price for a cell phone?" I admitted it was interesting, but figured I'd hardly need one.

Then I tried one. Then I realised that in some ways the iPhone was almost a blank slate. It was the apps that made it fantastic, and what fantastic apps there were coming out. And from then I was a fan. I have an iPhone 4; I decided to jump the 4S and wait till iPhone 5 and September, when my contract runs out, and then upgrade 'sensibly' (this time).

Some tech writers a lot more experienced than myself made more drastic calls on the iPhone launch. Seasoned columnist John C Dvorak, for example, famously predicted back in 2007 that "Apple should pull the plug on the iPhone" since it was "going to be another phone in a crowded market."

The iPhone is, at five years old, a huge success. It revolutionised pretty much every single aspect of the smartphone business and created US$150 billion in revenue.

So I'm glad my reasoning was mild mannered, back then.

Five years on, Dvorak has explained why he thought the iPhone would be a dud: he claims he got it wrong because of a conspiracy against tech journalists like him who were too honest about Apple for their own good. Which stretches credibility, don't you think?

Basically, Dvorak believes Apple had (and still has) a policy of not talking to anyone who annoyed Steve Jobs.

I don't believe this, for the record. At the risk of joining that hypothetical Apple Blackball Express, I think Apple's institutionalised arrogance is just that - institutionalised, and not personally directed.

But I kind of have to believe this - if I thought Apple's managers were so petty, I would find it hard to endorse their productions in any way. I have to think Apple runs its marketing and PR in as professional a way as everything else, and indeed, when I do meet Apple representatives, that has always been my experience.

Dvorak talks about access to devices - some tech journalists, naturally placed much closer to source than me (by a very long shot) do get some devices pretty quickly to play with, and a few, like Walt Mossberg (who even I consider an Apple sycophant) might sometimes get pre-release devices and info. I'm not sure.

Some key developers and those who need to create peripherals and software also get pre-release material, of course, and they are exceedingly good at sticking to their secrecy clauses. More's the pity.

But other commentators got iPhone wrong, too. In December 2006, CNET, Michael Kanellos said "Apple is slated to come out with a new phone... And it will largely fail.... Sales for the phone will skyrocket initially. However, things will calm down, and the Apple phone will take its place on the shelves with the random video cameras, cell phones, wireless routers and other would-be hits..."

In the same month, Morningstar analyst Rod Bare wrote "The economics of something like [an Apple iPhone] aren't that compelling."

Personally, I call US$150 billion quite compelling.

In the following month, Bloomberg's Matthew Lynn wrote "The iPhone is nothing more than a luxury bauble that will appeal to a few gadget freaks. In terms of its impact on the industry, the iPhone is less relevant... Apple will sell a few to its fans, but the iPhone won't make a long-term mark on the industry."

It reminds me of that comparison of smart phone designs before iPhone and after.

Competitors, now, I do understand why they were iPhone naysayers. Perception is reality - they didn't want to believe iPhone would succeed, since it threatened their own markets. An example was the Palm CEO, Ed Colligan. Now, the Palm was a device that was literally spun off from a product Apple created and eventually abandoned, the Newton Personal Digital Assistant. When that was deleted, staff left Apple to create the Palm PDA, which had a bit of a run for a while. So with that in mind, Colligan should probably have known better. But in 2007, he said "We've learned and struggled for a few years here figuring out how to make a decent phone. PC guys are not going to just figure this out. They're not going to just walk in."

Microsoft has much closer ties, at least in engineering and developer circles, to Apple than you might guess, so should know the Californian Inc very well. However, Microsoft CEO Steve Ballmer said the Apple iPhone "is the most expensive phone in the world and it doesn't appeal to business customers because it doesn't have a keyboard which makes it not a very good email machine... So, I, I kinda look at that and I say, well, I like our strategy. I like it a lot."

In January 2007, Microsoft Senior Marketing Director Richard Sprague added his one cents' worth (I don't think it justifies two cents): "I can't believe the hype being given to iPhone... I just have to wonder who will want one of these things (other than the religious faithful)... So please mark this post and come back in two years to see the results of my prediction: I predict they will not sell anywhere near the 10M Jobs predicts for 2008."

(Thanks to Loop Insight for these quotes.)

Ouchie. A little later, of course, Microsoft started copying it. But so did everyone else. And I won't even mention Microsoft's Surface ... yet.

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