iPhone Can Replace Laptops for Majority of Computer Users

There's a dirty little secret among iPhone users that Apple (AAPL) would rather keep quiet. For the majority of users, this device can replace your laptop. I refer to the iPhone as a device, because calling it a smartphone is condescending to the technology. It's much more than a phone. It still surprises me that analysts compare Apple's device to other phones. There is no comparison. Having the 'real' Internet in your pocket with the ability to surf the web with touch screen technology was the single biggest surprise from round one of iPhone. Using the widescreen video ipod has been cool, downloading songs over WiFi is great, scrolling through visual voicemail has been revolutionary but the elephant in the room has been the Internet capability.

The difference between surfing the web on an iPhone vs. a Blackberry is like the difference between real gold and fools gold. Blackberry users search the internet only out of necessity; iPhone users surf the web like they do on their laptops. Google found this out during their last round of collecting mobile search data. iPhone users search Google 5,000% more than the nearest competitor. "We thought it was a mistake and made our engineers check the logs again," Vic Gundotra, head of Google's mobile operations told the Financial Times. Keep in mind, all of this browsing has occurred on the slow 2.5 EDGE network with only a few million iPhone's in service. Once the iPhone goes 3G on Friday, along with the international rollout, mobile web browsing is going to reach some astounding figures.

Don't expect to see any Apple commercials touting the iPhone as a laptop replacement, because Apple doesn't want to do anything to drive away prospective Macbook buyers. So far so good: Apple laptops continued their climb during last quarter and analysts expect a 35% increase for the June quarter. Of course, the iPhone doesn't offer the typing or printing qualities of an actual computer but when users are on the go, all they really need is the Internet.

The iPhone at $199 is a game changer. This device will be purchased not only by smartphone users but by anyone who wants the 'real' internet in their pocket. Recent data suggests that demand is greater than originally thought. Over 28% of all Japanese mobile users are considering a switch to the iPhone and Monday's report out of Goldman Sachs shows 17% of executives are expected to support the iPhone 3G within the next year. "That's a 'very strong number especially at this early stage,' says Goldman telecom analyst Jason Armstrong, who expects adoption rates to increase once the new iPhone and its enterprise-friendly software update launches on Friday." Apple is about to scale the mobile Internet but you won't hear it from them.

Disclosure: Long AAPL

Comments

[JonathanLiss, SAEditor]

Jason,

Nice piece overall.

However, I have to say i strongly disagree with its basic premise. Most laptop owners aren't buying their computers simply to surf the web. Their laptop computers are essential for being able to work from remote locations and require very specific software, a keyboard and a much larger screen than the iPhone offers. Can you see someone writing a screenplay or typing a deposition on a device the size of the iPhone? Editing a film or audio file? An accountant using Quicken or TurboTax? The list goes on and on.

Apple knows this. If they thought the iPhone would really cannibalize laptop sales, it's unlikely it would be worthwhile for them. Why have a $200 product replace a $2,000 one?

Curious for your take.

Best,
Jon

[guliamo]

Interesting but not new - the difference in price is mostly attributed to the screen so I think you are right, but Apple has nothing to worry about - the MacBook Air is all screen - anything smaller than that would simply be not inconvenient..

[digivision]

it's a device not a devise

[digivision]

i see your point however I think it's a little early to call the iphone a replacement for laptop... i remember when people used to say that laptops will never replace desktops and soon laptops will outsell desktops..
I am saying it's early for the iphone to be the laptop killer but this is the first step to a more advanced device that will definitely and seriously compete with laptops.. the screen is the only limitation

[DutchMark]

First of all, the iPhone doesn't cost $199. It's actually more like $599 that includes a phone and data-plan.

I do agree that a lot of Google searches of YouTube can and will be done by iPhone. But for general internet use to be a replacement for a laptop the screen is too small.

I'm waiting for a tablet-PC annex book-reader that is basically an iPhone in a Legal Letter size format. Then we're talking.

[wunderboy]

this reads like a pump and dump promotion as do most "dirty little secret" stock stories. any company that truly has a $199 mobile computer replacement isn't going to keep it a secret even if it will cannibalize another revenue stream, because that product would flip the world upside down causing the cash to fall out of everyone's pockets $199 at a time, far outweighing all Apple's other revenue.

[Johnnymack]

It's like this.
Since the iPhone, I use my MacBook half as much, BUT I STILL need the MacBook.
It's a convenience, and can be used quickly where other solutions are cumbersome (boot up laptop, put in cellular data card, connect online to get new emails, versus get email through iphone)
New programs will only make the iPhone MORE useful and convenient.
Also , realize that there is a SAFETY, or vulnerability to the devices.
Desktop iMacs are relatively safe, especially if you back them up.
laptops are a bit more fragile and prone to damage, since they're portable, can be spilled on, or more likely stolen.
So not many people have JUST a laptop, they just use it MORE than the desktop.
Now, the iPhone has MORE vulnerability, as it's carried around all day, can be stolen, or dropped in a URINAL! haha! which probably hasn't happened to many laptops (unless it was on purpose!)
so...WAY too soon to talk about iPhones canabalizing the laptop market.

[Mike2011]

With emergence of wifi enabled displays and already bluetooth enabled input devices this is not far fetched to expect the iphone to become tomorrows end user computing platform. Imagine a world where a single handheld device connects with all of your apps and data existing in the computing clouds.

[Lochias]

As I was read the article, I notice my poor laptop sitting under some papers. It's true: I've used the iPhone for email, for Christmas shopping, for getting down story ideas, and, while writing (on paper), to replace both my seven pound dictionary and fact-checking and research via laptop or desktop computer.

I do use the desktop and 23" screen morning and evening, but most of the day it's the iPhone.

My laptop is afraid. Very afraid.

[Toni]

Doris ? Are we at 200 yet ?

[User 223255]

Since Iphone I use my laptop much less. Sometimes, I don't even open it when I get home after work. This is what the author is talking about. Some people may not buy a laptop for this reason. I still would need a laptop.

[scottybe]

One day we'll all be using an iPhone or some other mobile device and get rid of the traditional PC and laptop. It will connect (wirelessly) to a larger, higher-res screen and full-sized keyboard when needed. It may even "plug" into a portable screen/keyboard that looks like today's laptops. All applications and our data will be in the cloud.

[wallawallabingbang]

For developing countries where WiFi is ubiquitous and they do a lot of 'cafe computing' this is CERTAINLY the case. That's why the iphone is selling, like, well, laptops!

[Oh Blah DeeBlah Dah]

RE: "... this devise can replace your laptop."

That is like saying a bicycle can replace an automobile.

In some cases it is nice to ride the bike, however, for transporting goods and passengers, driving in bad weather, and going long distances, the automobile STILL excels.

=====================

RE: "... Apple doesn't want to do anything to drive away prospective Macbook buyers."

The iPhone is excellent for MOBILITY, much more so than a notebook. However, it will not replace, at least for now, the heavy keyboarding needed to work on spreadsheets, large documents, and graphic work.

The iPhone is great to ACCESS all of this information while on the go, to make minor changes to data, or to respond to the sender.

I used to dread having to pull over the the side of the road to startup my notebook to get information while on a mobile phone call. Now, I just use my iPhone to get the data that I need, while on the go. But, I still need my notebook for heavy keyboarding, and probably ALWAYS will.

Apple's notebook sales are SAFE. In fact, they will grow tremendously as more and more non-Mac users are introduced to the the Apple iPhone.

The iPhone AND the MacBooks COMPLEMENT each other. Both, are needed.

[iphonecanada]

I agree.... remember all the news about companies trying to build the Sub $500 laptop ? Apple has done it for under $300. Still I can do all that for Free on my iPod Touch. Wherever there is Wifi. Also - The keyboard is absolutely incredible. I don't care what RIm people say - I have tried both and the iPhone/iPod Touch virtual QWERTY keyboard is amazing.... I would never go back to a crappy Blackberry. Sorry RIM your cooked.

[Infiniteloop]

I use my Touch instead of my laptop all the time. I even trade stocks via E-Trade with it. I bought shares of AAPL while sitting on the beach on Sanibel Island, FL.

[MightBuyOneNow]

Question re: "Keep in mind, all of this browsing has occurred on the slow 2.5 EDGE network with only a few million iPhone's in service"

Can we really say the iPhone usage came via EDGE vs iPhone via WiFi? I always assumed the stats didn't differentiate the connection, only that the usage came from an iPhone. Would be truly interesting to compare iPhone usage via EDGE vs Wifi.

BTW - I agree with your premise. The iPhone is a computer in your pocket, not a phone. I think with the new apps from the App Store, the rest of the world will finally get it too.

[KenC]

In places like China, where wifi is not common and DSL is rather slow, and EDGE is very strong, the iPhone makes a good laptop substitute. My three nephews and nieces all have laptops, but honestly, the impression I got was that laptops are not at all ubiquitous; however, everyone has a cellphone. They do seem to use their cells more like how we use our laptops, so I can't see using my iPhone as a laptop replacement unless they come out with one with twice the screensize, but I can see countries like China and India, where they use their cells as their mobile hub, adopting the iPhone.

[loosecanon]

iPhone is a device, not a devise, as in "Jason, check your spelling" is a piece of advice, and not of advise.
Meantime, the deal killer for me on iPhone is its lack of keyboard interface. For several years, using PalmOS, I have travelled without my PB, using instead a Palm TE or now, T/X, for creating Office documents, either in the field or in my airlines seat with the help of an IR keyboard. Both are pocket-sized, and the documents, thanks to Documents to Go, are available to me or anyone, for that matter, via a transfer or sync via BT. When iPhone offers this functionality, it will be a mobile marvel. Then, there's only the ugly AT&T only business...

[jasonschwarz]

Thanks for the comments, this article is preparatory for my next article on China. KenC is right on the money! BTW-I know that my grammar is not the greatest, sorry to those who can't stand mistakes, I'll do my best to make corrections in the future. Also-I totally agree that the iPhone won't replace all laptop use but according to my informal surveys (which were too informal to include in the article) 80% of iPhone users are leaving their laptops at home. A large percentage of laptop users simply want to stay connected to the flow of info on the web-the 'real' Internet of mobile Safari allows them to do so. It's the first of its kind and I believe it to be the best feature of iPhone 1.0.

[zawy]

Notice that everyone who agreed with the article's premise owns an iPhone and knows from experience that what the aerticle says. None of those who disagreed indicated that they have even tried an iPhone. I've tried an iphone. I've seen other's change in laptop use from it. My estimate is that time-wise it replaces at least 50% of the laptop. 90% for some people. Personally, when i type i am usually goofing off like right now and would prefer a laptop. But when i'm doing real work, i'm usually just reading the internet.

[Illuminator]

I, absolutely, use my iPhone as a replacement for a laptop. When traveling for business, it is much more convenient lugging the iPhone through airport security than a laptop. I've access to all email, websites and, if jailbroken, documents I require to conduct business. The only real issue is the ability to cut and past, in any application, and send attachments in email.

[All Tech]

If they enabled bluetooth keyboard support for the iPhone I would buy one yesterday. Until they do that THE DEVICE IS USELESS compared to a blackberry. I BADLY want to switch over to the iPhone but I can't and won't until it has a decent keyboard - or at least the ability to type with the keyboard in a horizontal format. Its great for school girls right now but not for business ppl.

[Rob L]

I still don't have an iphone since my Verizon contract doesn't end until next month, but I highly doubt I'll be coming home and reading up on stocks on the iphone when I eventually do get one. What I will be able to do however is surf the web from places I've never done it before, like when I had to wait for my girlfriend at the dentist office bored out of my mind. The iphone is pretty cool from what I can tell, but sorry, my laptop is here to stay for browsing at home.

[Rob L]

I still don't have an iphone since my Verizon contract doesn't end until next month, but I highly doubt I'll be coming home and reading up on stocks on the iphone when I eventually do get one. What I will be able to do however is surf the web from places I've never done it before, like when I had to wait for my girlfriend at the dentist office bored out of my mind. The iphone is pretty cool from what I can tell, but sorry, my laptop is here to stay for browsing at home.

[Camden]

Jason, I'm a big Apple fan and a fan of the iPhone but really, there's NO WAY the iPhone can replace laptops for the majority of computer users. None. A very, very small minority – at best – will give up laptops. Yes, the iPhone will be huge once 3rd party apps gain critical mass. But laptops are here to stay.

[J Rizzo]

Don't forget that the iPod touch also offers the "real" internet along with WiFi connectivity.

Many users purchase Apple laptops (especially MacBook Pro) because they make viable desktop replacements. I have to agree with most folk above that the iPhone will never replace the laptop, it's just an extremely convenient way to carry a little bit of your laptop along with you.

Now if the iPod had a USB port, then we'd be talking. You'd be able to connect everything from a keyboard to an audio recording interface.

[WindowsGuy]

This article is a joke at best.
I LOVE MY iPhone. I have from day 1.
The only thing you can do on the iphone is view information and email.

I do a lot more than that on my work laptop. I actually work.
I creat spreadsheets, Create PDF forms that link to databases.
Edit PhotoShop documents among the 100 other things a day I do on my laptop.

The iphone doesn't run Java that well, it doesn't account for any corporate email system (Lotus Notes) other than Exchange.

Heck, I can't even view 10% of the websites I want to view because it doesn't support flash.

So if I were your boss I'd take a serious look at your "job". if you can do it on an iPhone then I'd like to apply, I think I'm more than qualified to view the web, stocks, weather, iTunes etc.

Classified Ad:
Looking for qualified individual who needs to accomplish nothing but viewing content on the web. Must be willing to do it from a 2x3 inch screen when the 1 thing a day must be done and write an article for "Seeking Alpha" that doens't need to contain any relevant information. Article must be written using Google words as this is the only way to write articles other than email your article.

It's a phone, the web and an iTune player. If that's what your job takes the line will be long.

[the Graduate]

Son, I have one word for you...CHINA

[WindowsGuy]

By the way...
Your article uses the % sign. The iPhone doesn't have % on its keyboard so this article wasn't written on the iPhone.

Tell you what...
Back up your words and don't turn on your laptop or desktop computer for a week and use only the iPhone.

Write your articles, and do everything your job requires and write an article next week and see if you still would have written this article today.

[bobthenoob]

@ Windows Guy
>"The iPhone doesn't have %"

You're busted to pretend to have an iPhone :P

I wonder why windows zealots are so focused on bashing AAPL... looking for anything AAPL and post their garbage LOL, where do they find the time?

[bobthenoob]

To others that doesn't have an iPhone and curious on how many characters are available when typing on an iPhone, here's a link showing the iPhone with old 1.1.1 fw and already capable of using more than 256 characters...

www.macrumors.com/ipho.../

Since you don't have one, you read this too Windows Guy ;)

[mxp]

It's not that the iPhone will replace the laptop but it will be more like:

with my iPhone, my Mac laptop and my MobilMe I'am happy! I have all I need wherever I go! :)

[mollytjm]

i think the point here is that the iPhone i obviously the start of the shirt pocket computer. just because it doesn't do everything a laptop does now, doesn't mean it won't eventually. remember that laptops didn't do everything they do now either. remember computers with NO internal hard drives in 1983? and... hey... remember when there WAS NO INTERNET? it's all called innovation. Apple will figure it out and when they do, they'll make even more $.

[User 224459]

LOL, cloud computing isn't suitable for most business enterprises. There are legal and security issues they face that an individual, who isn't particularly concerned about identity theft, must face. Yes, there are legal requirements for handling information to protect potential privileges in any future civil litigation; there are handling requirements to protect intellectual property and other proprietary information; there are a growing number of state laws regarding the handling of sensitive information, including client identity/financial records, etc. I need a laptop with office applications and you can bet that I encrypt files on a laptop. Unless you simply a blogger, I wouldn't be so quick to think you can travel with an iPhone and use cloud computing for conducting your employer's business on the road. Better check your company's IT security policies, least you get in very hot water.

[Partners inGrime]

Perhaps the iPhone or iPod touch won't replace one's laptop, but it sure complements it.

By the way, not only does the iPhone have a % sign, but also £, ¥, € and more!