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Is the iPhone Really a Threat?

I stumbled upon the headline, "iPhone a True Threat to Windows Mobile" on the blogosphere the other day and couldn't help but chuckle a bit. How can the iPhone be a threat when millions of us can't even use it because we're not AT&T Wireless customers? Personally, I'm not in a position to pay to break my Verizon Wireless contract - which has five family phones on the plan - so I can pay $500 for an iPhone, sign a two-year contract with AT&T Wireless and still not be able to manage my e-mail in the tunnel between the Woodley Park and Dupont Circle Metro stations.

Don't get me wrong. The iPhone could be revolutionary to mobile communications. The touch screen technology, the WiFi connectivity, its approach to mobile Web surfing and - my favorite - the interface for managing voice mail are all cool concepts. Just a few days ago, not long after the iPhone launched, I ducked into a Verizon Wireless store to see the new offerings in phones. There was a decent selection and it included several phones running Windows Mobile software. But the closest iPhone was down the street at the Cingular store (the signs haven't been changed to AT&T yet.)

Meanwhile, across town, a hearing of the House Subcommittee on Telecommunications and the Internet yesterday is being dubbed the "iPhone hearing" because lawmakers were calling for a more open wireless system where any device could be used on any wireless network. Chariman Ed Markey (D-Mass.) said the iPhone highlights both the promise and the problems with today's state of wireless communications. The iPhone, he said, demonstrates the "sheer brilliance" of wireless engineering but also raises questions as to why consumers can't use it on any network.

But opponents to an open-access proposal counter that the wireless market is already competitive and that the competition forces wireless carriers to invest in new products and network improvements that benefit consumers.

Over at the Verizon store on L Street last week, there were a lot of choices - but none for me. I'm now on my third Treo 700p, replaced twice because of problems with the device itself, never the network. I'd like to give the iPhone a try, as would many others. But not so long as I pay Verizon every month. The hackers are busy both here in the states and overseas trying to find a way to "unlock" the iPhone so it works on other networks. But so far, I haven't heard of any successes - and Apple is usually pretty good at closing the open doors that hackers find.

I guess I'll just cross my fingers and hope that the third time is the charm for me and my Treo.

By Sam Diaz  |  July 12, 2007; 5:00 PM ET  | Category:  Sam Diaz
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Comments

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Do you have any idea what the numbers are for Windows Mobile? If you did you would know that the iPhone "only" being available through AT&T easily provides a customer base large enough.

Posted by: howlongtoretire | July 12, 2007 5:56 PM

I don't understand why you chuckled number of windows mobile sold in 2007 will be around 4 million and the total number of windows mobile sold will be around 7 million by 2008. so if apple meets it's goal of 10 million by end of 2008 then it would have sold more iphones in 18 months then the total number of windows mobile sold in 2006, 2007 and 2008. and if you believe what analyst are saying then apple would sell 10 million before even 12 months are completed. that would be serious trouble for windows mobile.

Posted by: Jay | July 12, 2007 6:58 PM

It would be important to note that while Verizon and Cingular both run on the CDMA wireless communication standard, T-Mobile and Cingular do not (they run on GSM). Therefore manufactures design phones with chips that work with one network or the other. If this legislation passed it would force handset makers to support both systems, an engineering feet that could be very difficult, although then again it may not. However it would invariably drive up the cost of already expensive phones. However since they are supposedly subsidized by the carriers then it shouldn't be too bad, although not enough to justify the $200 cancellation fee they charge and the 2year contract. Why is it that you have to be in a contract for a service that YOU are paying for? No other services (i.e. cable, land lines) require them, why do we let them get away with this, oh and the subsidized phone argument is crap.

Posted by: Wirelessly Bound | July 12, 2007 6:59 PM

Well the first 2 people really have said what I wanted. But I will say this. If you like the phone fine, if you don't like the phone, fiine. But don't be stupid enough to laugh and say that this phone is not the best phone every made(outside and inside. Did you see the scratch and drop test from pc world?). It may not be for you because of cancelation reasons or prefered carriers but don't make it seem like the design and the sure doimance of the software is anything less that amazing and ground breaking. People that say other wise just show me that they are not for the phone because just want to hate it not because it's not amazing.

Posted by: m.j | July 12, 2007 8:40 PM

Of COURSE it is not a threat. Neither is iTunes, nor Safari. And, those retail stores will never succeed. OK, global arming is real, and, now we know the source of that hot air.

Posted by: Jeses G | July 12, 2007 9:11 PM

KUDOS TO ALL OF YOU ABOVE AS YOUR COMMENTS ARE RIGHT ON, BUT I WOULD ADD THAT "SAM, UNTIL YOU HAVE USED AN IPHONE AND HELD IT IN YOUR HAND...YOU HAVE NO IDEA WHAT YOU'RE TALKING ABOUT. I HAVE ONE, I KNOW AND THEY JUST RAISED THE SALES ESTIMATES TO 13.5 MILLION UNITS BY THE END OF 2008." WINDOWS WHAT.....????

Posted by: RS | July 12, 2007 9:48 PM

Well, do yourself a favor and don't ever try an iPhone. If you do, you'll just eat your early termination fees and wonder why you put up with such complete POS phone for so long.

Posted by: Ej | July 12, 2007 9:56 PM

there are alot of people who are waiting to unlock the iphone. they do not care about the threat so far. come up with the solution and i will be o happy

Posted by: sam | July 12, 2007 10:48 PM

I'm typing on an iPhone now, and it is without question the coolest phone, music player, internet... aw hell, it's basically the coolest thing I've ever owned. You really don't know what you're talking about of you haven't played with one for a while--held it, lived with it, discovered how you can't put it down. I was on Sprint, I've been on Verizon. You know what? AT&T has been pretty good so far, all things considered. Give a try before you knock it. If you keep an open mind, I think you'll discover just how amazing this little phone is.

Posted by: DL | July 12, 2007 11:11 PM

Hey everyone. Thanks for the comments. I think you missed my point, though. The iPhone is a major breakthrough, no doubt about it. I would get one in a heartbeat - if I could get one through Verizon. I'm not saying it's a substandard phone or that it won't eventually surpass Windows Mobile phones or any other product. (I had the chance to test an iPhone briefly and thought it was a great experience for the time that I had with it.) For me - and many other readers who have sent me e-mails about this topic - the idea of paying termination fees, buying a new iPhone and signing an AT&T contract is unrealistic. That's all I'm saying...

Thanks again for chiming in.

Posted by: Sam Diaz | July 12, 2007 11:44 PM

Yes it's a threat, because you still have the freedom of choice - to be or not to be with AT&T... and the increasing numbers are facts... so stick with your Treo, maybe you don't deserve an iPhone after all.

Posted by: Al | July 13, 2007 12:02 AM

Sam Diaz,
In the short term, Iphone is not a threat to Windows Mobile. The truth is that Microsoft is the biggest threat to Windows Mobile. Windows Mobile hasn't been a great success because Microsoft is not focusing on making all consumers' lives more efficient.

Microsoft's focus on Office, Corporate Email, Flawed web servers, and various other corporate technologies is missing the important area of growth - consumers, non-corporate professionals, e-commerce companies and large companies seeking to save money and have more customization.

As Google and other web service companies gain market share, small companies are going to find it a simple matter to switch away from Microsoft. Companies would be wise to not use Silverlight - why would they want to commit to Windows when Adobe is the real leader anyway?

The Iphone is not compatible with Exchange or Blackberry servers because it doesn't matter. The consumer is what Apple, Google, and Yahoo want. Once they get the consumer, then they can get the corporate world, server applications and all. Google has a double-edged strategy, focusing on both the consumer and the corporate world at the same time.

So, Iphone is not the biggest threat to Windows Mobile. There are many other threats to Windows Mobile, including Microsoft's current position.

Posted by: Ben | July 13, 2007 1:14 AM

You keep bringing up the early termination issue. Not to worry, Apple will still be there when your contract ends. In fact, this "issue" is basically the same with almost every new phone that comes out. If you were wise enough not to sign a new contract since the iPhone was announced, you are at *minimum* 6 months into your contract already.

For the record, I'm all for open access of the wireless networks. The new auction should benefit all Americans -- after all, it's OUR airwaves. Our broadband and wireless is pathetic when compared to the rest of the industrial world. We pay the most money and get the least for it. This needs to change if America is to remain competitive in the information age.

Posted by: Mark | July 13, 2007 2:14 AM

The iPhone is a "threat" to WinMobile only insofar as it offers a much richer experience to non-tethered individuals for their mobile PDA experience.

It's hardly surprising that, less than 2 weeks into the availability of the iPhone, it does not have the intricate connections/security/etc for corporate IT. Apple probably DOES care (yes?) about that, but its bread is buttered by individuals, not IT. As another poster's unit sales calculations suggested, if the iPhone was a PERFECT hit with IT and every single WinMo sale instead went to Apple, while doing nothing to expand the "smartphone market," then the iPhone would FAIL to hit its goals.

Apple might LIKE to sell to corporations, but it NEEDS to do much more. Each unit sold to corporations may have lots of value to MSFT in terms of getting more $$$ from each customer -- development, Office sales, server licenses and all -- but Apple can't make a penny in that space and ain't trying.

Maybe later. It's quite laughable that the smartphone infrastructure, which involves lots of third party programs, custom development and intensive support, should magically appear as part of a 1.0 effort. And people were saying, "Apple knows bupkis about phones... it'll be a disaster." But it'll likely be months or years before third parties collaborate with Apple to build out a competitive IT infrastructure to support the iPhone. By then, there'll likely be many millions of iPhones in corporate workers' hands, REQUIRING IT shops to come up with solutions.

The direct threat, however, is not to Microsoft, which has lots of other ways of taking corporations' dollars, but to the cell providers, who are now exposed as being the enemy, rather than the facilitator, when it comes to innovative mobile services. (With the exception, temporarily, of AT&T, who brought Apple to the party, which has now changed the rules.) The next step will be if the next FCC spectrum auction prohibits bidders from restricting which devices or services get used in the bandwidth, as Google has requested, and as Europe expects of its carriers, as a way to expand service dramatically versus the master/serf arrangement that we tolerate in the US.

Posted by: Walt French | July 13, 2007 2:30 AM

Not to be contrary, Sam. But you don't seem to know what your wrote. The article you wrote has this at the core:

"How can the iPhone be a threat when millions of us can't even use it because we're not AT&T Wireless customers?"

Along with chuckling and the headline, the clear message is that the iPhone is no threat to Windows Mobile for whatever reason.

I would say that if Apple sells more iPhones in a year than Windows Mobile devices have sold in three years (even from a variety of carriers and manufacturers), then the better question might be "Is Windows Mobile any threat to the iPhone?"

Posted by: Matt | July 13, 2007 3:33 AM

Sam,
Do the same thing that the CEO's of Verizon, Sprint, T-Mobile, Palm, RIM, Nokia, Motorola etc. are doing. Stare at yourself in the mirror in a trance-like state. In the most zombie-like voice you can muster, chant "The iPhone isn't really a threat.... the iPhone isn't really a threat... the iPhone isn't really a threat." Then you can chuckle to yourself as you snap out of your trance, knowing that all is well in the world. You are safe now. Safe now. Safe. Now.

BTW, you haven't used one, have you? An iPhone, I mean? Eh, I didn't think so. Bye Bye now! Nothing to see here.

Posted by: Kevin | July 13, 2007 4:46 AM

Thank you for an enlightening article, showing an american birds eye view. Don't know if MS cells will ever be the hottest over here, but iPhone will have an impact.

Seems to me that production limitations are Apples biggest concerns. Why would they pick a single operator (not the biggest one) in each country, if that wasn't the case.

Isn't Apple a hardware and media company?

Over here in Europe, where SMS has been around for a while and people send each other photos taken with their cell phone cameras with 3-5Mpixels. Both speed (3G) and the right protocol (MMS) have to be supported.

Other missing ingrediants: applications and ringtones, I want to buy them and install them.

If you have a WiFi phone, then you should be able to call for FREE with VoIP. Read about it
http://my.opera.com/jakob/blog/

For instance, a European traveler with a Nokia wifi Smartphone and Vyke Mobile IP software can connect to 9,500 The Cloud HotSpots in Europe for free and call other users for FREE or as low as 4 US cents pr. CALL.

What about a speedy browser like Opera Mini, which uses only 10% of the bandwidth of Safari for the same result. If you don't offer 3G, then you need to speed up the Browser.

Posted by: Jakob Snilsberg | July 13, 2007 7:07 AM

so being locked into a Verizon plan for your entire family is ok but being locked into an AT&T and plan for the iPhone is somehow a problem?

Turn the problem on its head, Mr. Diaz. The problem isn't so much that the iPhone is locked into AT&T but rather that *you* are locked into Verizon.

Think about it.

Posted by: Larry | July 13, 2007 8:20 AM

Plus Apple have admitted the battery now lasts for just one year:

http://iphoneuk.blogspot.com

Posted by: Jackie | July 13, 2007 8:48 AM

No, the iPhone's not a threat to Windows Mobile, and vice versa. There is plenty of market share to go around.

Many iPhone buyers never had a PDA, and don't really care about that kind of functionality. Jobs knows this, that's why he's more or less created a nice iPod with a phone and a few fun apps thrown in.

Posted by: Kevin | July 13, 2007 9:13 AM

USAToday have a survey that says 90% of the iPhone users are estatically happy with their iPhone. Many have bought themselves out of existing contracts... Apple have a rip-roaring success on its hand - it will easily meets its current targets. As soon as the iPhone price stops dropping then... its "Goodbye Windows Mobile". I think the blogger got it right. Your naysayer-chuckle will then sound pretty hollow.

Posted by: Ynda | July 13, 2007 9:21 AM

Before you make up your mind, call Verizon customer service and check when EACH INDIVIDUAL number in your family contract expires -- they are not all on the same cycle. In my family plan 2 numbers have 14 months to go, but the contract for my number expires in November. I can buy the iPhone now, use call forwarding to send calls from my existing number, and reduce overall shared minute usage in the Verizon plan.

Posted by: davemcg | July 13, 2007 12:13 PM

here it is in a nutshell...the iPhone is revolutionary! Not just for whatvit is as a technological marvel, but what it stands for in the broader scheme of things. Right now there is a chess match going on now between apple and and microsoft. In the past year apple has quietly moved its pieces around the board with the release of osx, the popularity of the ipod, the change to an intel chip which allows the consumer to buy a computer that can run windows or OSX. Now we have the iphone. More and more consumers will now be exposed to what ww diehard mac users have known for years......that the mac is a far superior platform. The funny thing is that microsoft didn't even know the game was on.....Checkmate Mr. Gates!

Posted by: scfa | July 13, 2007 1:00 PM

It's hilarious to read the responses when anyone says anything even mildly negative about the JesusPhone. No criticism will be tolerated! Give me a break, it's just a phone. As far as smartphones go, it isn't even that smart -- no expansion slot and no 3rd party apps, just for starters. But hey, Paris Hilton has one. You guys are in great company.

Posted by: Surflizard.com | July 13, 2007 3:22 PM

Many of the comments here are so far off topic that it makes you wonder if those commenting even read the article. This article is not about the iPhone being a piece crap though for some reason, like the majority of Apple discussions, the Apple zealots come out of the dark and go rampant. It is quite obvious what this article is about but the majority of the above comments are pointless. Go back and read the second paragraph. And unless you agree with the thought of certain products only being available to certain wireless providers then don't waste your carpal ligaments. In my opinion, I agree with the author. Having the iPhone only available to AT&T customers is no different than any other cell phone manufacturer limiting their customer base to a specific wireless provider. Or Ford only allowing Texaco gas for your vehicle. Plain stupid.

Posted by: Sven | July 13, 2007 3:39 PM

Windows Mobile is such a lame OS. The Iphone OS just makes Nokia Symbian, and any Window Mobile device look like an OS straight out of the early 90s. Both are clunky slow and outdated. As for Palm, well that OS is on its way out too. Palm has not bothered to change much in their system since it was introduced. I am a happy Iphone owner, and for me it was worth switching networks for a device that actually has a user friendly interface!

Posted by: Matt Saavedra | July 13, 2007 3:50 PM

Most of the comments above are from partisans with axes to grind. Everyone should take a deep breath and step back for a second.

First, the iPhone definately has a revolutionary interface. That's great! But the functionality is lacking. I use a Blackberry. What an awesome device! It has all the funtionality and doesn't cost an arm and a leg.

Also, those who are predicting the demise of Windows Mobile simply because of an innovative interface, think again. Do you think MS will be sitting around twiddling their thumbs while all this is swirling around? Get real.

Posted by: gbj | July 13, 2007 3:55 PM

Good article Sam.

Just remember that you'll always offend the chubby Apple geeks or the at&t retail store employees/fanboys whenever they feel you are dissing their product.

I can say that. I'm a Mac user and an iPod user.

I believe that Apple will have a hard time repeating their first weekend numbers and that interest in the product will continue to downward spiral.

I've played with the iPhone. It's beautiful and has some cool features. But the fact that it's locked to a GSM network with the poorest voice quality (Los Angeles) and the slowest data network made me think twice before disconnecting a reliable wireless service I've used for years (Verizon Wireless) and switching over. Leaving VZW for at&t around here is a downgrade in itself.

I agree, had Verizon and Apple been able to come to some agreement for use on their network, I might be more inclined to purchase it.

Apple demands sales residuals from each customer per month from at&t. Why at&t gave in to Apple I'm not sure? Verizon doesn't share monthly revenue. Apple also limited distrobution. Verizon distributes its handsets to all retail channels. Sales could of been 10-fold.

All in all, if I was a diehard at&t customer who demanded the best, I would of voted with my wallet and wait for the 3G model. That might of put pressure on at&t to upgrade their network instead of relying on 1998 wireless technology to let them slide by.

Posted by: D | July 13, 2007 5:47 PM

Do these apple fans even have a life.No wonder they are slamming anyone who makes one little criticism of apple.I have dropped my phone million times, one accidently got flushed down the toilet,i fell at the pool, other sank at the bath tub .... a phone is a commodity that people use in all kinds of odd places ...i should be out of my mind spending 500 bucks for a phone ...my laptop cost me 400 bucks ....Of course if you read all the comments here u would think the entire world is apple obsessed...because the rest of people dont spend too much time on the computer ... they have little something called "life".

Posted by: John | July 13, 2007 10:33 PM

All of you don't seem to understand that this is all just hype. I'm sure the phone is alright, but what is all the fuss about? It's an ipod you can make calls on. Period. It's not all the "revolutionary" as a previous commenter stated. In Japan, you can watch telivision on slim, normal sized flip phones. Listen to radio and mp3. Look at photos. Whatever. It's no big deal. And I just got myself a Motorola Smartphone (from 2 years ago!) here in Japan, and it has ALL the features of the iphone, and comes with a stylus. Bottom line is, 6 or 12 months from now, no one will care about this silly phone. Doesn't everyone remember how much craze there was when the iPod came out? Then the nano? The shuffle? Apple is just all about looking cool and having the "newest toy" which is fine for some.. others just don't care, and don't want to have something that EVERYONE else has. Basically, iPhone is going to be the new RAZR. How tired is that phone now? Just saying.

Posted by: AMH | July 14, 2007 1:41 AM

well some of the comments do sound lame here....i know that apple has come with a b1tch slapping product but it has a genuine flaw......its connected to just one network......check out some of the phone from Nokia......they can transit between CDMA and GSM and offer breakneck internet speeds.......my friends in India and China have better market compared to ours......a friend of mine had this Nokia N73 phone.....it had a clunky interface but it did what it was supposed to do....it was neat and it worked on 3G and had a great battery life.....yeah it played videos and music.......i was wondering if Apple could collaborate with these other manufacturers to make OS on those phone which have great hardware......all said and done........apple always rocks....always.....i just wish it had expandable memory slots and 3g service.......

Posted by: Hellboy | July 14, 2007 3:30 AM

There is no doubt that changing from one cell phone provider to another incurs a premium. So what? Its just another factor in making a 'buying decision' to purchase an iPhone. [In reality, that same dialog can be made about purchasing any product.]

For those that insist that the iPhone is too expensive, look at the Nokia N95 or the LG La Prada.

For those that insist that the iPhone needs a memory card - show me another cell phone with 8GB of memory or even 4 GB.

For those that (continually) insist that the iPhone is 'just another toy' - ANY manufacturer that can release a product that sells 1 million units over a four day period, must have a product that the buying public really, really wants.

See roughlydrafted.com for more in depth anaylsis.

Posted by: Dru Richman | July 15, 2007 8:40 AM

The problem for Windows Mobile isn't what networks it's on. It's the sudden antiquity of its technical specifications. It's the fact that the .mobi Web that its tiny hardware specs rely on is now obsolete. When people talk to me about the mobile Web now they mean "iPhone apps" aka "Web 2.0" not .mobi and WML.

Also regular people don't know or care that there may be a difference between various wireless networks. Today it is all seen as the Internet and that's what it will probably all be soon enough. Verizon is not going to put their network up against iPhone's features and win.

Complaining iPhone is not on Verizon is disingenuous for many reasons:

1) Verizon was Apple's first choice but Verizon said "no" therefore complain to Verizon for not offering you better hardware choices to go with your monthly milking

2) Verizon uses a proprietary network that requires non-standard phones, they are worse lock-in artists than AT&T which uses the global standard phone

3) the current problems of the US cell phone market can be blamed on lots of people and corporations but perhaps least of all Apple, who just arrived and who brought Wi-Fi and Unix and Web 2.0 and standard email and standard audio video and so on

4) the cell network is legacy, it's going away ... 10 years from now ask me about iPhone and I will reminisce fondly but I doubt I'll remember who was filling in between Wi-Fi hotspots and handing the voice calls for the first few years

5) if the choice was a Treo on mega broadband, the fastest connection, or iPhone on EDGE I would take the iPhone every time and many others would also ... you can surf millions of Web sites with it, it knows how to decode the data more usefully, it takes more value out of the network than a Treo, even on a slower connection, I am going to eat the lunch of many of my competitors who are plinking away on a Treo pulling up 1/10th of a Web page at a time ... the workflows on an iPhone are personal computer workflows, from 2007 not 1993 like other phones

Posted by: Fred Hamranhansenhansen | July 15, 2007 8:41 AM

@Jackie,

Please check your facts before posting:

http://www.apple.com/batteries/iphone.html

"A properly maintained iPhone battery is designed to retain up to 80% of its original capacity after 400 full charge and discharge cycles."

Posted by: TanZing | July 15, 2007 9:28 AM

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