Seeking Alpha

Paul Carton


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So is the iPhone all show or should we believe the hype? Is Apple's (AAPL) latest brainchild just a flash in the proverbial pan or does it live up to its lofty expectations?

To get early answers, we’ve solicited some first impressions from the early adopters of the ChangeWave Alliance.

Now you might recall that back in February we did an Alliance survey to measure the likely market for the iPhone [click here to review]. What the results told us back then, was there was going to be a “tsunami-like surge” for the new product.

Our February iPhone report concluded: “The current survey findings provide strong evidence that 10 million units is a very attainable sales goal for Apple in 2008 – if the iPhone performs up to consumer expectations.”

That if is what we’ve just taken a preliminary look at through the eyes of 26 initial road testers. (Note we’re also surveying a much larger group of actual iPhone users – and we’ll be publishing a far more comprehensive look in the very near future.)

Before getting to the guts of what our 26 road testers have to say about the iPhone, we want to acknowledge the potential for bias. We’re speaking, after all, with people who were already favorably predisposed toward the gadget – otherwise they wouldn’t have run right out to get it.

If you wanted to find out about the latest Harry Potter movie, for example, you wouldn’t judge it based on the reaction of the midnight attendees to the first showing.

But unlike the first Potter viewers, our ChangeWave Alliance members tend to be harsh critics of that which fails to live up to their expectations. They’re normally a tough crowd – business and technology early adopters who are often called upon to analyze new technologies.

Most importantly, they are very well versed in presenting their opinions. So even though these are the opinions of the earliest of early adopters, there’s a high probability it’s based on the real world merits and flaws of the iPhone.

And The Early Results Are In…

We asked our 26 iPhone owners to give us their initial impressions of the device, and their feedback was exceptionally positive – suggesting the iPhone may indeed be living up to its hype.

We’ve grouped their responses into the following categories:

iphone results

As you can see, the responses were overwhelmingly positive, with only two comments that could be considered completely negative.

So here is what respondents had to say in their own words.

One Alliance member writes, “Utterly brilliant. Lovely interface, easily blows away any other phones I’ve had - Sony Ericsson and Motorola models particularly. Great sound quality, great integration of e-mail phone and web, beautiful quality screen graphics.”

Another adds, “Absolutely a game changing product. Fantastic in every way.” And someone else describes the device as, “Almost a complete mobile office that fits in your hand.”

More positive feedback:

• “Very impressed. I would rate it as 9 out of 10 for a first generation product. I believe it will set a whole new standard for how one interacts with their smart phone.”

• “Works flawlessly and intuitively. Amazing industrial design,”

• “Better than the ads and early reviews have indicated, I am blown away.”

• “The most impressive technological advancement since the personal computer.”

Remember, we’re conducting an in-depth survey of a much larger group of actual users – and we’ll soon have a far more comprehensive look at the iPhone. What we are presenting here is only an initial reaction.

As one member puts it, “I’m just getting used to it. Seems like a good quality image and is easy to use, but I’ve only had it for one day. I’ll be able to tell more in a couple of weeks.”

Above and beyond the positive responses, there was also some disappointment. And it mostly focused on one thing…

AT&T – The iPhones Achilles Heel?

Nearly all of the less-than-favorable comments about the iPhone related to AT&T (T), the iPhone’s exclusive service provider.

One owner writes, “The iPhone was a pleasure to use, but I don’t particularly like the fact that I have to use AT&T.” Another adds, “It is a wonderful product…The only hitch I see is the exclusive AT&T/Apple alliance. The ATT wireless network is terrible. You can have the best smart phone in the universe, but if it’s dependent on a horrible network infrastructure the net result will be an unhappy user.”

More mixed emotions from others, who find the iPhone to be “The best phone ever made, but AT&T is one of the poorest run companies in the world. I hate their incompetence.”

Another respondent complains rather colorfully “Activation was a b**ch if you were trying to use your existing AT&T account….”

A different member complains that the “…browser is very slow,” which fits right in with the other less-than-enthusiastic attitudes on AT&T.

On a totally different issue, another respondent complains “I would like third party software.”

Bottom Line: So Far the iPhone Is Living Up To Its Hype

No getting around it, the initial reaction to the iPhone launch is the best we’ve seen for a new product since we first began surveying ChangeWave Alliance members seven years ago.

One of the more intriguing comments on the iPhone was sent to us by an Alliance member who has yet to purchase the device.

“Incredible marketing,” one respondent writes. “A decent device made to sound like it does something brand new. In reality it doesn’t do any one thing better (other than music) than a windows mobile device or Treo 750 series device… But it IS cool.”

“The best thing about the iPhone is it will force other cell phone manufacturers to finally deliver better devices.”

Stay tuned. We’ll soon have the results of a far more in-depth Alliance survey on the iPhone – along with a close-up look at the biggest winners and losers in what may well be the biggest shake-up of the cellular industry in modern times.

Jim Woods co-wrote this article.
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This article summarizes the results of a recent ChangeWave Alliance survey. The Alliance is a research network of 10,000 business, technology and medical professionals who spend their everyday lives working on the front line of technological change. For more info on the ChangeWave Alliance, or if you are interested in joining, please click here.

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This article has 12 comments:

  •  
    The last comment about it doing nothing better than any other phone -other than music- seems to go completely against the grain of the other opinions you hear ie that the iPhone pretty much does everything better than any other existing phone.

    Intriguing statement, maybe. Daft, certainly.
    2007 Jul 19 09:11 AM | Link | Reply
  •  
    Who think that "the iPhone pretty much does everything better than any other existing phone" are probably dumbass ex-RAZR users who never heard about VOIP, 3G/HSDPA, Skype, GPS etc.
    2007 Jul 19 02:00 PM | Link | Reply
  •  
    The last comment shows a total lack of understanding about the monumental gulf (putting it mildly) between an underpowered Windows Mobile or Treo 750 device, running what is in comparison a "toy" operating system, vs. the iPhone, which is running OSX.

    There is no comparison. Multitasking, smoothly animated effects, incredible attention to detail for every little facet of the iPhone in what is essentially software rev 1.0, and which will continue to grow and get better over time. Anyone who has used, or at least seen, an iPhone in action will understand this; someone who hasn't might think that having some multicolored icons on a screen means the same functionality and user experience, whether you're using an iPhone or one of those other things. They couldn't be more wrong.

    Thinking back to some things that were done a few months ago, comparing the iPhone to those other devices is laughable. I remember seeing videos put up on YouTube by people who had "modified" other smartphones to look/behave like the upcoming iPhone. The herky-jerky slowness of the response and animation of anything that these simulated "iPhone-like" UIs did on other smartphones is like comparing an old 1960's cartoon to a Pixar movie today.

    So when I see a statement like "doesn't do any one thing better... than a Windows Mobile device or Treo...", I have to say, it will do EVERYTHING better than any of those phone, by a huge margin.

    One final anecdote. I was at a Best Buy during the week, took out my iPhone and started to show it to the staff, none of whom had apparently ever seen on. Before I turned it on, a few of them seemed curious, but also said they would never be interested in having one and that it wasn't anything that special. After I'd spent a little while tapping and running through features - here's my email, here's the web, here's how the contacts list interfaces with the phone, email, the web, and Google Maps; here's how Google Maps works; and eventually ("does it play music?") when they're shown what the iPod functionality is like; all jaws were on the floor.

    People need to SEE the iPhone (and even better, use it for a few minutes) before they truly understand what it does, and what it means.
    2007 Jul 19 10:27 AM | Link | Reply
  •  
    very true about the need for people to just get it in their hands for 5 minutes. it's funny to see the smiles and wows and then the inevitable envy. iphone will be viral, the growth will come from those who have it showing it to those who don't. plus we'll get another lower priced model in the near future (hopefully before holidays) which will increase dramatically the addressable market.
    2007 Jul 19 10:45 AM | Link | Reply
  •  
    From the introduction, there has been merciless (desperate?) criticism of the iPhone, with each feature compared to some specific feature on some other specific smartphone. The existing smartphones may be fine for corporate technically sophisticated users, IM'ing and typing push emails on their blackberries...but it is not what the "rest of us" want.

    We (the ordinary consumers) want easy-to-learn, easy-to-use, quick and easy synchronization, stable, secure, fast integration of features, and a pleasant experience...which is typified by the iPhone. We want an experience that is pleasing. The "killer app" is that the full-featured operating system and browser, which is already producing a steady stream of improvements, eliminating weaknesses criticisms almost as fast as they can be found.

    As for the future and in terms of "product success", remember that there are a lot more of "us" consumers, than there are IT professionals. Remember the iPod?
    2007 Jul 19 10:55 AM | Link | Reply
  •  
    And then the surprise over price. I was asked repeatedly how much the service cost; the minimum $60/month with unlimited data plan also brings on stares of surprise. No expensive "toll" extras, like, having to use MMS or pay-for email to get your cameraphone-shot images out of the iPhone. With free email; and (already) a growing number of methods for logging into AIM, etc. and chatting (you have to know that built-in iChat is just one step around the corner), there's little need to pay for text messaging.

    I was initially concerned that the 450 mins minimum AT&T plan wouldn't be enough; but, no longer.

    One thing that hasn't occurred to most people... yet... is that 450 minutes is a lot more useful than one would think... -because- of the fact that the iPhone is really a laptop-equivalent in your pocket. Who needs to talk, when non-urgent messages can come in and out through email? Thanks to rollover, unused minutes will build up. Most of my work use for the iPhone will be done this way, and I'll make and receive calls when necessary, but I'll spend at least as much time using it as an Internet access device as in using it as a phone.

    As far as a lower priced model, I wouldn't hold my breath waiting for that. There is no point; yet. There is absolutely no reason for them to do this when they can sell as many of the current design as they can manufacture. Rumors about the imminent arrival of a lower-cost version make no sense and need to be taken with a big grain of salt.
    2007 Jul 19 10:58 AM | Link | Reply
  •  
    " probably dumbass ex-RAZR users who never heard about VOIP, 3G/HSDPA, Skype, GPS etc."

    Based on some independent tests done recently and published on the web, 3G apparently drains the battery twice as fast when you're on voice calls; and also (as Apple has said all along) noticeably faster when you're doing other things. I'm satisifed with the compromise that using EDGE/2.5G presents with the iPhone: much better battery life, and also, more widespread availability of service.
    I absolutely would NOT want to have reduced battery life when using the iPhone.

    VOIP? That's a software, not a hardware, feature. Give it time, it will come. There are already services available (Talkety) that will let you connect any two phones (including landline, or cell, to an iPhone) that are doing this a little bit less directly.

    GPS? That's the only hardware feature that's missing. However, it's safe to assume that adding GPS to an iPhone would mean thicker/longer/heavier... and with reduced battery life.
    2007 Jul 19 02:34 PM | Link | Reply
  •  
    I guess the one thing I don't understand here is the complete backlash against any negative opinion, keyword being opinion, regarding an Apple product. There's this paranoia that everybody's out to get Apple, like its some conspiracy. C'mon, "merciless" criticism?!?! C'mon, attacking a guy because he doesn't enjoy it/thinks his windows mobile device is just fine? I think the iPhone interface is much better, but that's just my preference.
    2007 Jul 19 03:24 PM | Link | Reply
  •  
    What amazes me is the misinformation on the iPhone to the public. My family bought 5 phones and I am amazed at how many people tell me nice phone but the battery sucks or can't be replaced. Or that the internet is too slow or the service plan must cost a fortune. When you tell them that this is bunk they are amazed. My parents both have people asking them about all the problems with the phone. Their response what problem. Biggest problem so far, my mom cut off the ringer and could not figure out how to cut it back on. I have been showing it to people including a real estate agent today who was amazed at how it worked (showed them their own real estate tax records online) and how great the screen is. Let people see it for 5 minutes and play with it, then they want it. Also people think it is fragile and will break. Wife dropped her phone on the driveway from her van, nick in the silver edge but the screen no scratches. I caught the earbud cord on a shopping cart causing the phone to shoot out of my pocket and land face down sliding across the floor. Not a mark on it. The grocery people were amazed.

    Give people some time and the viral impact of the phone will grow and grow.
    2007 Jul 19 07:59 PM | Link | Reply
  •  
    I believe that having an ipod in your phone is cool, and a great selling point, but the big sucess story for iphone is going to be consumer friendly, easy to use cell phone. Most people do not use most of the features on their cell phones because they are difficult to learn. Anyone who purchased an i-pod knows how easy they are to use compared to the competing mp3 players, and the ease of us on the iphone compared to any other cell phone is light years ahead.
    2007 Jul 19 10:57 PM | Link | Reply
  •  
    “A decent device made to sound like it does something brand new. In reality it doesn’t do any one thing better (other than music) than a windows mobile device or Treo 750 series device… But it IS cool.”

    It does do something brand new- it introduces, for the first time, an interface that is a pleasure to use. Mobile phones have been around for a good while now but for the most part they all present a maze like confusion and awkwardness to the end user. The iPhone has a very robust set of features that are presented to the user with elegance and utter simplicity. It is the interface that makes the iPhone revolutionary. Apple gets the value and importance of interface and applies it to all of their quality products. None of their competitors seem to get this until they decide to copy Apple's proven success and blatantly copy...usually at a superficial level. The interface is the revolutionary piece. That is why Apple has become the darling of the consumer who can't get enough Apple product. Like the competition, many analysts and reviewers fail to grasp this distinction.

    Furthermore the iPhone is revolutionary in that a year from now the iPhone you paid for a year earlier will actually run smoother and offer more features than at the time it was purchased, thanks to ongoing free upgrades and enhancements via iTunes. That's pretty revolutionary as well but rarely mentioned.
    2007 Jul 19 11:45 PM | Link | Reply
  •  
    Good start for a first generation device.
    2007 Jul 23 12:57 AM | Link | Reply