Why I'm Disappointed By The iPhone

| About: Apple Inc. (AAPL)
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I never bet against Steve Jobs. The man is a master but I am disappointed by the iPhone announcement for one reason. It is not OPEN. Ask yourself why there has been such a frenetic pace of innovation on the web and such a slow pace on the cell phone?

In my opinion, it comes down to one reason: the cell phone is a closed platform. The phones are locked, the carriers wall off the gardens and control the pipe, and innovators are, in most cases, forced to launch apps and services through carriers and their IT bureaucracies and share a huge amount of the revenues with the carriers.

On the other hand, the web is open. It is a paradise of innovation and you can talk directly to your users, get feedback and make your products better and more appealing.

One slightly orthogonal note: Apple's stock is flying. Don't bet against Jobs. But... the cellphone world is a cut-throat margin business where margins decline virtually overnight. The music player business is, ironically, more defensible. I wonder if Apple will succeed in maintaining margins as Motorola (see their recent announcement) and Nokia cut prices on all new phones. This is not a trivial shift even for the man who declared the end of the PC era.