Filed under: Macworld, Analysis / Opinion, iPod Family, iPhone
Will the iPhone cannibalize iPod sales? Or vice versa?
Yesterday, Steve Jobs introduced the iPhone. It is clearly the next generation of iPod. It's the full-screen video iPod we've waited for. It's the full-color fully-designed interface we've waited for. It's the fully-connected wifi and bluetooth device we've waited for. And that doesn't even mention the built in speakers and microphone.
So why does it have to be an iPhone? Surely there's a huge market out there who wants all these features but who doesn't want the Cingular piece of the action. Of course, many of you will rightly point out that one can purchase the iPhone, maybe even use the iPhone to good effect, without using the phone itself. The included two year contract is a bit of a stumbling block, especially if monthly charges (which I'm still really unclear about) apply.
So why not offer a phone-less iPod? It doesn't have to wait for FCC approval except insofar as any Bluetooth or WiFi device might need some paperwork done. Why not sell a basic "true fullscreen video iPod" at the $299 price point that removing the phone hardware might allow, to the large market of iPod upgraders who'd jump on buying one like a starving Georgia Tech student on barbeque?
My guess is that introducing a phone-less iPod would cannibalize early sales of the iPhone. Of all the goodies introduced about the phone, it's the phone component that's the least glamorous. Sure, a lot of us would pay a premium to carry fewer gadgets in our pockets. Combining the iPod and the phone and a lot of the PocketPC features makes sense--and I tell you as a PocketPC user, that the iPhone does not score too well on the PocketPC range of capabilities--but it also takes a lot of choice out of the equation for those of us under existing phone contracts who are looking for a better iPod and not necessarily an iPhone.
So when do we see an actual G6 iPod sans the phone connectivity? Your guess is as good as mine.
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Reader Comments (Page 1 of 2)
Dave in San Diego said 11:45AM on 1-10-2007
If the video interface becomes the new iPod paradigm, I for one will miss the clickwheel. With the clickwheel, you can advance to the next song, pause, repeat, and adjust the volume all without looking at the device (like while it's in your pocket). Try that with the video interface. Breathtakingly advanced, but in this case, too clever by half.
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epthegeek said 11:48AM on 1-10-2007
I highly doubt they'd price a phone-less version at 299. Or even close. But even so, I'd want one with a terrible badness if it had large storage. The interface is phenomonal; puts other PMPs to ridiculous shame.
I'm no where near being an iPhone customer. I would stand in line to be an iPod 6th gen customer.
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Danny said 11:56AM on 1-10-2007
The quality of the user experience - and in particular user interfaces that are very intuitive and that people learn quickly without even feeling that they are learning - has always been Apple's big thing. The scroll wheel, and the way it drives the interface, is still what makes the iPod such an outstanding device, despite the fact that other MP3 players have lots of other very good features. It's the features you don't really notice but would if they weren't there, such as the accelerated scrolling with the wheel, that often make all the difference.
If the interface on the the iPhone has that same sort of instant AND enduring appeal --- and it's hard to tell at this range --- then could the scroll wheel start to feel a bit clunky, say like using a command line interface after you've got used to GUI?
Personally, I'm not so sure. In the same way as the mouse fundamentally changed since it first arrived, I wonder it the Apple scroll wheel will endure for the iPod niche. After all LOTS of people only use iPod for music and like the simplicity of it all. For these folks maybe the scroll wheel just is the right solution and the current iPod screen is big enough. I can definitely imagine getting an iPhone and then being slightly frustrated that getting at my music is a bit harder than it used to be. Then again, if there's some equivalent to accelerated scrolling through the magic of waving of my fingers, perhaps not.
Danny
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unclejerry said 11:56AM on 1-10-2007
I was really disappointed that there was not a stand-a-lone widescreen ipod announced. If they could sell it as a wifi / internet friendly widescreen ipod and take out the phone features, that would be great. I'd buy it then. But as it is, I don't really need it, nor do I want to switch from t-mobile since cingular has problems in my area.
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Mr. Carbohydrate said 11:59AM on 1-10-2007
I myself had been waiting for a new iPod to replace my 4th generation. I am a bit disappointed with the introduction of the iPhone (not with the iPhone itself, mind), as I think we will not see its amazing technologies/screen(!) filter down to iPods until MWSF '08, at least--Apple will not want to pull the rug out from under the iPhone. (I would happily buy the iPhone if I had not just signed a two-year contract with Verizon and bought a $400 phone).
Accordingly, I think I will have to settle for a 5th generation iPod for the time being, and then think about upgrading later...
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LittleJoe said 12:03PM on 1-10-2007
You know what this means?
New iPods right before Christmas.
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Brady J. Frey said 12:11PM on 1-10-2007
Close your quotes on the 3rd paragraph, just a note, you can delete my comment after that:)
Regardless, it's a mix market; and since it's the same vendor, they're not going to be too concerned which one you get so long as it's theirs. And since no one has innovated (Zune has very little innovation), it shouldn't be an issue. iPhone will dominate, hell we're getting 10 for our office when they come out, we've gone through everything from Treo's to 8125's!
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stainboy said 12:43PM on 1-10-2007
a touch-screen iPod without the phone bit?
no, i'd rather have a less expensive iPhone without the iPod bit. music on my phone, i couldn't care less for. camera? wouldn't use it much, not at 2 MP.
no, i like the iPhone because of its promised ease-of-use. so many times i want to throw my existing phone at the wall because it's such a mess of options in weird places. i like it because it will connect to my Mac and SYNC properly.
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rvr said 12:46PM on 1-10-2007
i'm thinking we'll see some updated ipods after the iphone has a chance to launch. there will no doubt be a huge early rush to get iphones. then i bet they'll drop new widescreen ipods. will they completely replace the current video ipods? or will it be a top of the line model? either way, i think it can coexist nicely with the iphone. the iphone is a nano, as far as ipod functionality goes, and i don't see people giving up their high-capacity ipods just because the have an iphone.
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Rick Moore said 12:49PM on 1-10-2007
I just sold my 4gig mini and had money burning a hole in my pocket for the 6G 30gig widescreen iPod video. I don't need all the phone features and I certainly don't need Cingular. I guess the question is when will the music, video and photo features and interface from the iPhone be available in an regular iPod and can I really wait that long? Ugh.
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Adrian said 12:56PM on 1-10-2007
Actually, I think the real problem for Apple is that most of the people who would buy the iPhone probably already own a 30 GB or 80 GB iPod, and if they bought an iPhone they would still have to carry around two units, because their music collection won't fit into 4 or 8 GB!
I think this is a way of getting people into the iPhone 'concept' - a widescreen iPod only device is bound to come out later this year (?) ... it must however, take sales away from the Nano, (the bestseller in the ipod range), but then as it's more money, that's a win-win for Apple.
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Matt Huber said 1:03PM on 1-10-2007
Why no plain iPod yet? My guess is hardware cost. Most of the costs for the iPhone are likely in the touch screen, the storage, and the processor, not the network interface. So a gadget with the same new iPod software would cost Apple about the same to manufacture. Who is going to pay $500 for a 4GB video iPod?
I suppose Apple could do an iPhone with all of the internet goodies, but just using WiFi. That might be interesting, but without the subsidy from the 2-year cell contract the price would likely be closer to $600 for the 4GB model.
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ThePete said 1:28PM on 1-10-2007
There is no way in HELL I'm replacing my 60 gig 5g with this iPhone-thing. The widescreen is totally wasted on a device that can only hold 8 movies (encoded at a decent rate). Call me when there's a widescreen iPod with a *decent* amount of storage and then we'll talk about price.
Phone functions? I already *have* a phone and guess what--it plays mp3s, videos and SHOOTS videos and lets me surf the 'net and so on and so on.
Give me something I don't already have, Steve--a widescreen iPod.
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Howard said 1:30PM on 1-10-2007
I too am waiting for the next gen iPod. I've got a 3rd gen now and would kill for the wide screen format and new interface. I'd think Apple would be wise to keep the scroll wheel for the bulk of the other iPod models. Having WiFi would be great, especially if they made it possible to purchase content from the iTunes Store using WiFi, sync to your Mac wirelessly and even use the web browsing, email and other internet features. That would make for one KILLER iPod!
I'm sure it will happen, but well after June. Probably the holiday season like others have suggested. Hopefully my cache of Apple gift cards won't burn a hole in my pocket before then!!!
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rvr said 2:29PM on 1-10-2007
i have to echo number 8. i would love an iphone nano! it's actually what i expected them to do. a very compact form factor with basic but perfectly designed phone functionality. that would be sweet. make it an ipod nano as well, and it's doubly sweet.
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Dick said 2:55PM on 1-10-2007
What if you already have a contract with Cingular? Can you switch or just buy the new phone and use your existing plan?
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Gordon said 4:05PM on 1-10-2007
I too would prefer and iPhone Nano. Much nicer form factor, much more useful for the average person. I'm most disappointed in the exclusive Cingular deal. I want an unlocked phone that I can use on whatever (GSM) network I prefer. As it is, I'll probably just buy an updated Nano from the Apple Store and a new MOTO from eBay.
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Wayne said 4:22PM on 1-10-2007
There is a lot of talk on various sites about the iPhone cannibalizing iPod sales. I think what everyone is missing is that if Apple _didn't_ do this, then other phones would cannibalize the iPod market. Other phones are becoming more and more capable for the music market, and in many cases people just can't justify carrying two devices any more.
I put my thoughts on this up at http://anonymouslemming.blogspot.com/2007/01/why-apple-needs-to-do-phone.html a couple of hours before the announcement yesterday.
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Dar the Monk said 4:23PM on 1-10-2007
I would rather keep my cell phone and have a ZUNE than switch to Cingular!!!!
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Corey Davis said 4:31PM on 1-10-2007
I think with the next generation of Apple (30+ years) they are merging our digital world. They're expanding on the ease of us concept by enabling every person to carry one less thing. Most people carry at least two major electronics with them: an iPod and a cell phone. It only makes sense they would one day merge. Their are downfalls for what's to come, mainly the exclusive carrier deal. We all cry complaints now, but 5 months from now the praises will come.
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