Apple's Handheld Computer Revolution

I was recently in an Apple (AAPL) store talking with a store clerk. We were next to an Apple Hi-Fi. It's a home speaker box with an iPod cradle. I asked the clerk if the iPhone would soon drive a monitor and keyboard in a similar way.

Clerk: oh-yea.

Me: And a television?

Clerk: oh-yea.

Me: So, the iPhone is going to be the computer?

Clerk: oh-yea.

Me: So there won't even be desktop computers, or cell phones, or stereos, or TV's -- Just iPhones, output devices and input devices?

Clerk: oh-yea.

Granted, I was only speaking with a clerk, not an Apple spokesperson, but the general direction of technology is obvious. In fact, Steve Jobs even announced that Apple's new desktop OS will work on the iPhone and iPod -- Confirming that these devices will also be hand-held Apple OS computers.

So Apple will have a product line of pocket-size, always-with-you computers, just as hundreds of WiFi initiatives begin to take over paid cellular. This will put Apple in a uniquely strong position to drive a revolution in handheld computing.

You see, right now it is marginally "free" to go online from a fixed line. But to go truly mobile, we either have to pay by-the-minute to use the slow cellular internet, or we have to deal with spotty WiFi coverage. Things are changing fast, but exclusively mobile computing remains an expensive or spotty trade-off. This forces nearly everyone to use a clunky computer as a central base of communication, and handhelds remain sort of ancillary things.

However, spreading WiFi coverage is creating an opening for handheld-centric computing. And once Apple OS runs on the iPhone, pocket-size handhelds will be able to do all the important stuff a clunky PC can. A that point, the convenience of always having internet and free VOIP access in your pocket will become the only decision variable. At that point, the device that can't fit in your pocket becomes redundant and the world switches to handhelds and cradles.

Bloatware's revenge

Microsoft (MSFT) seems completely unprepared to push its dominance with clunky computers into this new handheld realm. It will certainly need new interfaces like the iPhone's patented keyboard and finger driven actuation. But more critically, Microsoft will need to load bloated Windows Vista (not the CE version) on an flash memory handheld. The smaller Apple OS has a critical advantage here. It will be at least another year before flash memory chips are big enough to power a standard Windows bloatware device. It seems that Windows will be stuck without next year's absolutely-must-have functionality - platform ubiquity.

Once a critical mass of people leaves Windows, the only source of power Microsoft ever really had (its user network) will evaporate. At that point, Apple handhelds stop being a million user curiosity and starts looking like a $600/unit global communication standard/network that will eventually replace nearly a billion desktop computers.

And the iPhone may also be a killer technology for the cell phone hardware industry as well. The likes of Nokia (NOK) will simply not be able to create functions valuable enough to compete with $600 (or $3,000) iPhones that are also dockable Apple computers. The cell phone manufacturers as well seem wholly unprepared to compete with Apple's well established desktop software universe.

In summary, it seems that iPhone's offspring could dominate node computing and communication by bridging both ends of the mobility continuum. After all, If you had a dockable Apple computer in your pocket - A device that could always access the Internet for free - would you need another computer, or a cell phone?

Apple and Google (GOOG) vs. Microsoft

This change of platform is exactly what Steve Jobs has been waiting two decades for. It will force Microsoft to compete on the basis of innovation for the first time ever. But this time, Apple handhelds will do everything Windows devices can do and much more. This time technological change and Steve Jobs' battle plan (no doubt conceived well before the launch of the iPod) will unfold too fast for aging Microsoft to react to. On top of that, Microsoft is facing a two front war. For Microsoft's other front, see: How Google will kill node computing.

Comments

[Tom B]

"Microsoft (MSFT) seems completely unprepared to push its dominance with clunky computers into this new handheld realm. It will certainly need new interfaces like the iPhone's patented keyboard and finger driven actuation. But more critically, Microsoft will need to load bloated Windows Vista (not the CE version) on an flash memory handheld"

The MSFT apologists will argue that the UMPC's (Ultra Mobile (tablet) PC's) and the "Surface" technology suggest imminent "innovations"... from MSFT along this horizon.....

[ChineseZodiacMarriageCombinations]

re: 1st comment--I'd suggest that 'attempts at innovation' might be a more accurate way to put it. As someone who has spent years using Win CE on a top of the line handheld, I am entirely unconvinced that MSFT can make the leap to anything approaching iPhone, on ANY level. And I'm not long AAPL! (yet)

What you see on an iPhone is an extension of the elegant Mac environment that has existed for years. MSFT would have to do something totally out of character to counter it. Something nimble... can you see it? If Melcher's thesis that iPhone may be the catalyst that moves us all away from our desktops, where all we'd need is a screen, net access and an iPhone/next gen iPhone, MSFT may really be caught flat-footed on this one. It hardly seems like a stretch, to me.
The paradigms they are a changin'....

[Jon T]

Couldn't agree more with this analysis. I also predict there will be far more, and more varied devices from Apple that use the incredibly scratch resistant glass of the iPhone and Multi-touch. An 8 inch or a 10 inch iPhone/MacBook anyone?

Just the beginning of the beginning.

[fabricator]

This grandiose assertion:

"And the iPhone may also be a killer technology for the cell phone hardware industry as well. The likes of Nokia (NOK) will simply not be able to create functions valuable enough to compete with $600 (or $3,000) iPhones that are also dockable Apple computers. The cell phone manufacturers as well seem wholly unprepared to compete with Apple's well established desktop software universe."

Is terribly, terribly false and utterly biased.

Andrew, allow me to introduce you to a device of which you seem completely unaware: en.wikipedia.org/wiki/...

[AlanWilliams]

Have you ever used a Nokia N800. Good hardware, all that's missing is a decent interface/OS.

Nokia needs to buy all of their interface designers an iPhone and a Mac and save some of their R&D budget. I'm sure Microsoft has already done the very same thing.

[fabricator]

I get the feeling Andrew has no idea at all that the N800 (and its predecessor, the 770) even exist... although the platform was launched in 2005. That's a serious bit of ignorance, given that he stronglky proclaims that Nokia will absolutely not be able to compete in this space!

It behooves a writer to investigate his material before committing to print, especially if one intendes to speak in absolutes (which tends to be a big mistake anyway). The fact is that I've managed to use an N800 for at least 90% of what I can do with a laptop, and that's closer to Andrew's scenario than the iPhone can get.

I'm not saying Apple can't or won't get there, but to claim Nokia can't or won't-- hoo boy. That's just nuts.

[Partners inGrime]

The iPhone seems like the right device at the right time.

[digivision]

lol the N800 is already old compared to the iPhone.. playing catch up already
that's not how you compete with Apple , you need to be ahead not behind to make a difference

[dragon10]

Did You spoke with someone with your N800?