Well, yesterday, on the heels of Apple reaching a legal agreement with Cisco Systems (NASDAQ:CSCO) to share the name “iPhone,” a fellow named “Joel” over on Dethroner posted his rants about why Steve Jobs’s phone is, as he sees it, the usual swindle from the cell phone operators, including Apple’s partner, AT&T (NYSE:T). The iPhone will be business as usual for the cellular market, trapping customers into things they don’t really want.
Joel’s is not a stock tip, per se, but amidst the invective, it’s worth summarizing some disappointing facts of the iPhone that could limit its appeal among some parties. (Full disclosure: I’m saving my pennies to buy at least one $600 iPhone):
Cingular will share subscriber revenue with Apple: “How the heck does Apple sharing our revenue help amid the flood of noxious service?” You’re getting locked into another cellular 2-year contract: “You’ll not only have to pay full price for the iPhone—and I’ll bet you anything that $600 is going to be a break-even price for Apple by the time it launches—you’ll have to sign up for a two-year contract just to get the privilege of giving them your business. Don’t do this.” You won’t be able to install your own programs on the iPhone: “Jobs only wants the iPhone closed to protect his revenue streams, both by selling you new applications and maintaining the video and music DRM. But whatever Apple’s rationale, who cares? If you’re going to buy a smartphone, you should be able to install whatever you want on it—that’s what makes it 'smart.'” And so, in sum: “I’m not blind. What Apple has done right with the iPhone platform is exciting. It won’t surprise me if the iPhone eventually ends up being a success, just like the iPod. But for the next year or two, before the iPhone hits the mass market, early-adopting gadget nerds actually have a chance to influence the company. Don’t just give your money away.”
Personally, I think the phone will be a hit, but we don’t have enough info to know how much of a hit it will be.
Thanks to Wired’s Gadget Lab tech blog for pointing this out.
Apple shares were up a fraction of a percent Thursday at $89.13. They are up 32% in the last 6 months.
AAPL 1-yr chart