Enough Wealth

Apple's iPhone 2.0 'Bigger than the Personal Computer'

Seems that most other commentators disagreed with me ;)

Perhaps I should have been an instant convert and bought AAPL at $125? Pity it's now $85 and heading south... (I know that the whole stock market has gone down, but look at APPL vs. MSFT since the article was written)

My point about Apple products being "too expensive" was simply that while the Apple OS has been consistently better than the contemporaneous Microsoft OS, it is too expensive for the majority of consumers taste, because it comes bundled with Apple hardware. As far as I know you've never been able to order the cheapest available desktop or notebook hardware and choose to install either an Apple or Microsoft OS ;)

BTW, TCO comparisons don't mean much to home PC users or small businesses that only run a couple of basic apps (word processing, spreadsheet, accounting) and don't run a help desk etc. If you want an example of the price gap I have in mind, just look at the cheapest Apple notebook PC compared to the cheapest Dell laptop. Yes it's a comparison of apples and oranges (eg. performance, ease of use etc. isn't comparable) but my point was only that sticker shock might be an explanation for the relatively poor market share of Apple in the desktop PC space over the last couple of decades.

I'm just not convinced that the iPhone will capture as big a share of the mobile phone marketspace as the Windows PC gained in desktop space. Perhaps that's simply because I'm still getting by with the "free" 3G mobile phone that came with my $14/mo phone plan. It has a crappy keypad, miniscule screen, and ho-hum camera. It has internet access, but I never use it as it's easier to access the net with my desktop at work or at home. I've never felt a need to surf the net or watch movies on my mobile phone. Apart from the odd snap-shot with my phone, I use my digital SLR for taking photos. And I use a $200 GPS for driving - a phone-based GPS might do just as well, but would cost as much per month as buying a dedicated GPS outright.

So, on the one hand you have some consumers that just won't be interested in an iPhone-style mobile phone unless it's super-cheap (never an Apple selling point), and on the other hand they'll be phones from other players like Samsung, Nokie, RIM etc. that will eventually "get it right" and come out with a model that's as good as the current iPhone iteration.

Of course I'm probably wrong - after all, I decided not to buy any Microsoft shares when they listed in the 80's (I though they were overpriced!)

Apple's iPhone 2.0 'Bigger than the Personal Computer'

Maybe -- but I wouldn't bet on it. The Mac OS has been better than Windows for more than a decade, but it still can't get more than 10% of the desktop market. Why? Too expensive.

The same will probably happen with the iPhone. There's a certain percentage of the market that will pay a premium for the iPhone, but the rest will just go for a cheaper alternative that provides a *similar* product for 20%-50% lower pricing.