Are iPad Skeptics as Wrong as iPhone Naysayers Were?

A month ago, before any of us knew anything for sure about Apple’s tablet, I looked back at the period before any of us knew anything for sure about Apple’s phone. It turned out that about 95% of the speculation and rumors about the iPhone had nothing to do with the device that Apple actually announced at Macworld Expo in January of 2007.

Now that we know quite a bit about the iPad, a massive rush to judgment is already underway, with pundits predicting everything from historic success to epic failure. Which led me to wonder: How accurate were the first predictions that got made about the iPhone’s fate? So I went back and read scads of stories from the first couple of weeks after the phone’s announcement.

Overall, they weren’t bad. Lots of pundits said it was a landmark product with the potential to transform the phone business. But there were plenty of dissenting opinions, too. This article is devoted to them.

I’m not dredging up these stories to mock anyone. For one thing, some of them make reasonable arguments about the original iPhone’s limitations; it’s just that the phone managed to thrive despite them. For another, I thought that famous flop the G4 Cube would be an influential hit, and am therefore in no position to taunt anyone for making inaccurate forecasts about Apple products. I’m doing this because I think reviewing iPhone predictions is a useful exercise as we think about the future of the iPad.

A quick executive summary of some of the issues that writers most often brought up as evidence that the iPhone was headed for failure:

  • Price: Many skeptics correctly noted that the iPhone’s starting price of $499 was a lot of money for a phone.
  • Lack of apps: Naysayers reasonably criticized the phone for its lack of support for third-party applications.
  • Not businessy enough. A phone that pricey needed stuff like Exchange support, the doubters pointed out.
  • Cingular: The fact that the iPhone was only available on Cingular–which changed its name to AT&T Wireless before the iPhone shipped–was supposed to be a major problem.
  • Entrenched competitors: How was Apple going to compete with the Nokias and RIMs and Microsofts of the phone world?
  • Missing features: No keyboard? No removable battery?
  • Hey, Apple is a cult: Those who squawk about Apple products often throw in a reference or two to mindless fanboys who’ll snap up anything Steve Jobs instructs them to buy. (I wonder what percentage of a specific market Apple must hold before everyone involved agrees it’s silly to describe its customers as cultish?)

As it turned out, none of these factors killed the iPhone, and some of them eventually went away. The iPhone was too expensive, too limited in apps, and not enough of a business tool to succeed? A year after the first iPhone went on sale, the iPhone 3G arrived–a $199 phone with an App Store and Exchange support.

Other things that doubters complained about didn’t change, but weren’t fatal flaws. Today, people still grumble about AT&T exclusivity, and yet the iPhone 3GS sells like gangbusters. And I’m not sure when I last heard someone gripe about the on-screen keyboard and fixed battery.

Herewith, some representative pieces from January 2007 on why the iPhone was doomed, with thoughts from me–including comments from the authors on the iPad when I’ve been able to find them.

Hung Truong, “ 4 Reasons Why the Apple iPhone Will Fail ,” January 9th, 2007:

Here are 4 reasons why the Apple iPhone will fail:

1. Public Acceptance:
The average person doesn’t even use the WAP browser on their phone, let alone any full blown OSX apps! What people want in a mobile phone is a phone; they don’t need all of these extras. Extra software just makes it more difficult to perform the main function of the phone: to make phone calls.

2. Price:
The price of the iPhone was announced at $499 for the 4GB model and $599 for the 8GB with a 2 year contract. Right now, you can get a T-Mobile MDA smartphonefor $0 after rebate. The mass market is not willing to pay this much for a phone.

3. Copyright and Regulations:
There already is an iPhone out. It’s the Linksys Wireless-G Skype iPhone. I hope Apple has a lot of money or lawyers to acquire the rights to the name.

Pair this with the fact that the iPhone doesn’t have FCC approval and we might never see the iPhone get to market. How did Steve make all of those phone calls anyway?

4. Battery Life:
The iPhone runs OSX! This is great for a laptop or a desktop computer, but does a phone really need OSX? The battery life was announced as 5 hours of talk time, browsing, or video. Basically, 5 hours of active use. What happens after that? Your phone is dead and no one can call you.

People are not going to use the iPhone’s features for fear of losing their connectivity when the battery runs out.

Harry says: I was shocked, shocked to learn that Hung Truong now says his iPhone bashing was cynical Diggbait–but now he’s listing reasons why the iPad will fail, and he says really means it this time.

Allen Stern, CenterNetworks, “ Three Reasons Why the iPhone Won’t Be as Mega as Some Think ,” January 9th, 2007:

Reason 1 – Price

The entry-model is $500, the mega-model is $600. This is not an iPod at $249. Can the average American (you know the ones who own an iPod) afford this? I think not. I am sure there will be some incentives to switch but overall the price will be a barrier to entry. But not to the early adopter crowd. Walk down 43rd street in Manhattan from 5th ave to 6th ave. Ask every person with an iPod if they will get this device. I bet maybe 3% will say yes, and thats a very aggressive figure.

Reason 2 – Locked to Cingular

I am a Cingular customer. How many are not? Will you switch to get this phone? Some will, many won’t. Assuming it is GSM, I am sure someone will hack an unlock code but many won’t know how. What about those who recently signed deals with the other carriers? Will they spend the $200 or so to break their contracts? Doubt it! I can’t wait to read the posts on Consumerist.. they will go something like this “my wireless provider won’t let me out for free because I want an iPhone.”

Reason 3 – Data Rate Plans

I wrote about this last week with the MySpace deal. The data rate plans will kill this phone. I hope Cingular gets their act together and becomes an industry leader with regards to data pricing but today it is absolute crap. This device will use a lot of data when using the Cingular network (I understand it gets WiFi but that’s not available free everywhere!). Can the average American afford $600 for a device and then another $30ish over their normal rate plan for some data? Nope.

Harry says: Allen Stern is not only not predicting that the iPad will be a bomb, he’s saying it’ll be a hit, and that he wants one.

Philip Greenspun, “ Apple iPhone ,” January 9th, 2007:

Apple introduces its first phone today. It is a bit tough to tell from looking at Apple’s Web site, but it appears that this is yet another smartphone that is not a flip-phone. In other words, if it brushes up against something in your pocket it will make or answer unwanted calls. Basically all Japanese phones are flip-phones and it baffles me as to how American consumers are denied the simple interface of “open to make or answer a call; flip closed to hang up”.

Apple gives us an MP3 player, which other brands of smart phones have had for several years. What I want is a phone that won’t make calls from inside my pocket.

Harry says: If Greenspun couldn’t tell from Apple’s site whether the iPhone was a flip phone or not, he wasn’t looking very carefully. (For the record, the iPhone autolocks in a manner that comes close to eliminating the possibility of pocketdialing.) I haven’t seen him say anything about the iPad.

Jack Gold, Computerworld, “Will Anyone Answer When Apple iPhones Home?,” January 10th, 2007:

Why am I not impressed?

First, making an entertainment device is much different from making a phone. Over the years, plenty of phones offering lots of nice “toys” for users have disappointed. Ultimately, they were not very good phones. And the bottom line is that you have to build a good phone first, and then add features on top of that. Otherwise, don’t bother. You can ask Nokia, Motorola, RIM and others about this. All have had flops with what on paper were devices that looked marvelous. Another difference between phones and entertainment devices is that phones must be much more rugged and less prone to breakage while being subjected to all kinds of abuse. Can the iPhone take such abuse without a high failure rate? We’ll have to see.

Second, the price is steep. Yes, I understand that the astronomical list prices of $500 and $600 are simply initial inflations meant for the early adopters willing to pay almost anything (and to limit volumes while Apple ramps up to catch up to demand). But even if the prices were cut in half, that is hefty for a phone device these days, even one with loads of features. How many consumers are willing to pay that much, plus $40 to $80 per month for a plan that includes data services (which will be necessary to access many of the phone’s features).

Third, who is the target for this device? At $300 to $400 (assuming the price falls rapidly), an iPhone clearly is not a casual buy. In the past, most high-end phones have been sold to business users willing to pay for a fancy phone with the capabilities they wanted. But these users almost universally demand connectivity to corporate systems, especially through push e-mail and Outlook integration. How well the iPhone does at integrating to these systems remains to be tested. And although I would bet the iPhone will integrate and sync well with the Mac, very few businesses run on Macs. If the iPhone doesn’t do a good job with PCs, Apple has a big problem.

Fourth, the device runs the Mac OS. This is a major constraint, since few third-party application vendors (e.g., Good Technologies for a push e-mail client) run on the Mac. There are a lot of unanswered questions. Will these vendors port to a proprietary operating system when they have the option of running on Symbian with far more devices, or Palm OS or Windows Mobile? And will the iPhone support J2ME-based applications, of which there are a growing number? Apple can’t afford to build a dead-end system with no ability for users to enhance the device with third-party applications. But Apple will likely have a tough time convincing application vendors to build specialized clients for the iPhone until the volumes are there, and the volumes could be limited by the lack of third-party applications – a Catch 22.

[snip]

My advice: Unless you are a die-hard Apple fan, wait a few months to see how this all shakes out, especially if you want to use the device as an adjunct to your business. Find out how good a phone it really is and how well it connects to the world you live and work in before spending the high price for what could ultimately become an orphaned, stand-alone music player. An iPod would be a better choice for that, and much cheaper.

Harry says: Gold (A) reasonably suggested that businesses take a wait-and-see attitude on the iPhone; (B) took the notion of the iPhone running OX X too literally, and was overly pessimistic about the chances of developers supporting the iPhone; (C) seemed to assume that the iPhone would be fragile and sync poorly with PCs before there was reason to have an opinion one way or the other. As far as I can see, he hasn’t written about the iPad yet.

Rory Prior, ThinkMac Blog, “ Will the iPhone Fail? ,” January 12th, 2007:

You see the problem is you’ve got a really expensive phone here which fails to hit its two key demographics for two very different reasons. The first is the teen to early 20s market, these are people who would love an iPhone but can’t afford one. They’re also the people most likely to be stolen away by equally pretty looking phones that do more and cost less (even if they don’t have the elegance or UI glitz). The second is the ‘prosumer’ market (the folks with good jobs in the city who drive BMWs). These people can afford the iPhone, but they’ve already got phones from their employers. These integrate with their various enterprise systems (Exchange, MS Office, IM, etc) and while they might be tempted by an iPhone, the cold hard realities of non-replacable batteries, no 3rd party software, lack of blessing from the IT dept. and the suckiness of onscreen keyboards leave them stuck with their miserable Windows Mobile smartphones. Ironically the same sort of reasons why they’re probably Windows users rather than Mac users.

Without these two key segments of the mobile phone market who the heck is going to buy an iPhone aside from Apple fan boys and gadget geeks? Heck I’m an Apple fan boy and even I don’t think I’d buy an iPhone unless I could install 3rd party apps on it.

The mobile phone market is big enough that Apple can sell enough iPhones for the product not to be Cube style failure, but in its current implementation they can’t hope to do anything more than carve out a tiny portion of the fashion phone market.

Note I say in its current implementation - there are a few fairly basic things Apple could do (and perhaps will) to allow much wider adoption of the iPhone. The most important is not to lock out 3rd party apps, next would be to make the battery replaceable and finally to sell a nice tiny little bluetooth keyboard so that those who are serious about sending emails and messaging on the go aren’t driven insane by the touch screen. Still of all of them I can’t stress enough how important 3rd party apps are. Steve Jobs might not like the idea of you cluttering up his lovely product with your junk, but once you’ve laid down your cash it isn’t his phone any more and you should be able to customise it so it meets your needs. If it really runs OS X it should be robust enough to allow 3rd party software to run on it without one slightly buggy app bringing the phone down.

Harry says: I think Prior missed out on the impact that the iPhone’s Safari Web browser would have. He was right that third-party apps would be essential, and wrong about the keyboard and battery issues. As for the iPad, he’s taking the reasonable stance that it has plenty of potential but needs apps written to take advantage of its capabilities.

Matthew Lynn, Bloomberg, “ Apple iPhone Will Fail in a Late, Defensive Move ,” January 15th, 2007:

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.

[snip]

There are three reasons that Apple is unlikely to make much of an impact on this market — and why it is too early to start dumping your Nokia shares.

First, Apple is late to this party. The company didn’t invent the personal computer or MP3 player, but it was among the pioneers of both products. Yet there is no shortage of phones out there. There are already big companies that dominate the space, all of whom will defend their turf. That means Apple will have to fight hard for every sale.

Next, the mobile-phone industry depends on cooperation with the big networks. Phones — the high-end ones in particular –are usually sold with a network contract. The provider subsidizes the handset in the U.K. and hopes to recoup its money with ridiculously expensive charges for calls and data. Yet Apple has never been good at working with other companies. If it knew how to do that, it would be Microsoft Corp.

On top of that, its rivals will be pulling out all the stops to prevent the networks offering iPhones. Sure, a big operator such as Vodafone Group Plc would like an exclusive deal to sell the iPhone in, say, the U.K. market. Against that, how much does it want to annoy Nokia — and what kind of incentives will Nokia be offering not to go with the Apple product? There will be lots of tough conversations between companies that know each other well. Apple will find it hard to win those negotiations.

Lastly, the iPhone is a defensive product. It is mainly designed to protect the iPod, which is coming under attack from mobile manufacturers adding music players to their handsets. Yet defensive products don’t usually work — consumers are interested in new things, not reheated versions of old things. Likewise, who is it pitched at? The price and the e-mail features make it look like a business product. But Apple is a consumer company. Will your accounts department stump up for a fancy new handset just so you can listen to Eminem on your way to a business meeting?

[snip]

Apple will sell a few to its fans, but the iPhone won’t make a long-term mark on the industry.

Harry says: McCracken’s Fourth Law of Apple Predictions states that the more definitive a dismissal of an Apple product is, the more likely that it’ll turn out to be ludicrously wrong. While Lynn’s piece is dated almost a week after the iPhone was announced, it almost reads like it was written beforehand–I don’t see how anyone who was paying attention could conclude that the phone was “a defensive product” that was “mainly designed to protect the iPod.”

Richard Sprague, a Microsoft employee and former Apple evangelist, in “ Steve Jobs Says Java is History ,” January 18th, 2007 and “ More on Why iPhone Will Fail ,” January 26th, 2007:

I can’t believe the hype being given to iPhone. Even some of my blindly-loyal pro-Microsoft friends and colleagues talk like it’s a real innovation and will “redefine the market” or “usher in a new age”.

What!?!? Without even mentioning that the same functionality has been available on PocketPC, Palm, Nokia, and Blackberry for years, I just have to wonder who will want one of these things (other than the religious faithful). People need this to be a phone, first and foremost. But with 5 hours of battery life? No keypad? (you try typing a phone number on that screen, no matter how wonderful it is — you will want a keypad). And for all that whiz-bang Internet access, you absolutely need the phone to work, immediately, every single time. Will it do that?

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. Okay, it’s possible there are enough Apple religious people to buy a lot of them at first, but even the most diehard Mac fans who buy one of these will secretly carry two phones. One to prove how loyal and “cool” they are, and the other to actually make and receive calls.

[snip]

Here are more reasons I am not impressed by their phone, and why I’m surprised so many otherwise intelligent people think this is a watershed for the industry.

Microsoft’s not perfect; we don’t have the ultimate phone either, but I’ll take Windows Mobile any day over the iPhone and I bet serious users will agree.

Harry says: Sprague underestimated the appeal of the iPhone’s interface and Apple’s ability to make a touchscreen device into a decent phone. And I’m not sure why he brings up latency as a reason he’s unimpressed when he hasn’t tried the phone yet. He’s chimed in about the iPad on Twitter, and he’s not impressed by it, either:

A few overall thoughts about these predictions:

  • They failed to figure out that the iPhone was a fungible platform. It’s dangerous to predict that a pricey phone that doesn’t support third-party apps is destined to tank–its manufacturer just might cut the cost and open it up to developers.
  • They didn’t get that the phone’s browser was a breakthrough. For many people, it, not the phone, turned out to be the gizmo’s primary application.
  • They didn’t acknowledge how far ahead the iPhone’s software was, and how long it might take for other companies to catch up. Two and a half years later, the iPhone still has a lead in multiple respects.
  • They came to conclusions about the phone’s usability based on insufficient evidence. In January of 2007, almost nobody who didn’t work for Apple or one of its partners had touched an iPhone, with the exception of a handful of journalists. I don’t think any of these writers were among the lucky few.

All of which leads me to one conclusion about the current spate of iPad predictions: The best ones aren’t the ones that read like they were written by someone who belonged to the debate club in high school. The best ones are the ones that cheerfully acknowledge that there’s a lot we don’t know yet; that the iPad could look a lot different in a year than it does today; and that expressing opinions about a product you haven’t tried is inherently dangerous.

That said, if you’ve got predictions about the iPad–or thoughts about iPad predictions in general–I won’t try to discourage you from expressing them in the comments…

For comprehensive coverage of the Android ecosystem, visit Greenbot.com.

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