Wednesday, January 03, 2007

Apple wifiphone thoughts #2

Got some great comments on the idea of the wifi phone coming from Apple shortly. Here's a few more thoughts and points:

It really helps to not think that the "wifiphone" is a direct competitor to existing cell solutions, much the same way that you would have said a few years ago that an iPod isn't just a cassette-less Walkman. Sure, a cell phone and wifi phone facilitate talking (and iPods and Walkmen both facilitate listening to music), but getting a layer deeper reveals greater differences than commonalities.

A likely wifiphone from Apple probably wouldn't aim to provide SMS capabilities, or perhaps even web access (at least for the first year or so), much like the early iPods didn't play videos. Apple products tend to be initially born to do one thing spectacularly well, rather than what you see from many other efforts suffering from complexity issues, 'feature bloat,' and the like. (Credit here goes to the Apple marketing team. Only superlative marketers can say to engineers "stop right there - we don't need to add that feature." (Weak marketers say "sure, put it in, I guess that the extra feature will grow the market potential in excess of the cost of integrating the extra feature."))

I believe an Apple wifiphone would be identified not as a "go everywhere, communicate every way device" (as a cell phone is today) but rather "an iPod that can make calls when I'm in a wireless zone."

(Or, perhaps any of several other identifications "a phone for home usage (assuming a wifi house)," or "another way to keep in touch when I'm at Starbucks," etc.....) I think beyond these there's some cool potential uses (ultimately a streaming video player, etc.), but I can't see Apple (or anyone else) trying to do all of this from the start.

(But when you think about it, when you have a wireless enabled handheld video screen, speakers, keypad and microphone, what can't you ultimately do? For years there's been an assumption that phones would subsume PDA functions (=smartphones), but why can't PDAs subsume phone functions?

In other words, the Applephone would facilitate multimedia access thru wifi networks versus cellphones that primarily facilitate voice and some data access thru prorietary networks. There some commonality between the two, but more differences. Cell phones will provide more reliable voice access (for the next 5-10 years at least, given small issues with VOIP), but won't be able to provide broadband media for the next 5-10 years. (Verizon and Sprint might argue otherwise, but I highly doubt they'll reach 802.11N's 200M speed in the next 5-10 years.)

btw: in order to believe this, you have to ultimately believe a sea of high-bandwidth public* wifi will provide more and better access than any of the current cell carriers.

* I don't mean to suggest that these nodes be held by a public utility - perhaps wifi bandwidth will be so cheap and plentiful that we'll provide the nodes in an open source fashion. The irony here, is that this would enable Apple - which fundamentally believes in controlling the Mac computing environment - would be making a business of usurping the carriers controlled environment.

In other words, long term thinking by Apple believes that in the end wifi beats CDMA, GSM, and the like. This might be corroborated by Sprint's intent to build a nationwide wimax network.

(As a non-techie, I could be mixing networks or worse, mixing metaphors. Please point out inconsistencies, if you see them.)

Another reason for the Apple wifiphone is that this plays much more closely to Apple's experience and competencies. Apple knows wifi (hard to remember that Airport was early), knows consumer software design (see iTunes, etc.), and making something already possible much, much simpler.

In contrast, an Apple cellphone would lean much more heavily on hardware knowledge, systems integration, unfamiliar telephony protocols (GSM? CDMA?). I think it would also be a detour from Apple's mission to be the hub of a digital lifestyle, as other than syncing iTunes music (and perhaps contacts), there's no strong connection for a cell phone to Apple's core products.

Some objections to the iPhone that need to be examined are network access and business model. Specifically, who wants to run the network, and how - after interoperability fees - could anyone make money?

This is sort of like saying that the iTunes Music Store would never work without Apple owning an integrated broadband network, and that iPods would only make money for the record labels.

There's already broad non-Apple wifi access, from coffee shops to hotels, with increasing penetration nationwide. Add in the fact that 802.11N vs the current 'G' standard will multiply data thruput by 8X and wifi range by 67%, and we're going to reach the wifi network 'tipping point'.

As for the business model, the problem (or probably the opportunity) will be someone else's issue.

Finally, a couple of spare thoughts that make me sound like a conspiracy theorist, but like the Loch Ness monster, exist until disproved:

-Google Talk has been around a LONG time without it being loudly touted or otherwise connected. It's prime to be hooked to an iPhone. (Imagine if GOOG could simultaneously serve adds to a handset while facilitating P2P conversation?)

(Google Talk is built on an open standard, so Apple could just 'borrow' the standard without the need to tie up, but I think in this case Apple would be better off trading sole ownership of the upside for a wider net.)

-How come Skype offered free calls to US land and cell phone lines for half a year, ending January 1? This could be for other reasons, but could a large trial have been in the best interest of an EBay-Apple partnership? Along the same lines, why is Skype announcing a new pricing plan one week after MacWorld? Hmmm.....

-why is there such a paucity of Mac OS X cordless phones? Sure, Apple's <5% market share is the big reason, but could it be that Apple has already locked in the manufacturing capacity of the contract manufacturers who make the majority of cordless VOIP phones?

Maybe I'm making too much of the wifi opportunity - Apple could certainly introduce BOTH a cell phone (perhaps as a defensive manuever) and a wifi phone, and the wifiphone could be little more than an Apple-branded accessory

-another player of interest who has been relatively quiet recently: Intel. This partnership is expected to expose Intel to new markets by embedding Intel chips into more Apple devices. I wonder if Apple's new best buddies at Intel would like to provide Steve lower-power wireless chips and chipsets to increase demand for Intel's wimax chips?

Thanks everybody for your comments - please keep 'em coming, even if they're "Hey, you couldn't be more wrong."

(btw: the Loch Ness monster, or at least images thereof have been admitted to be a hoax.)


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