Effects of the iPhone

By now, everyone who's anyone has heard about Apple's new device, the iPhone. An iPod, internet device, and phone all wrapped up in a nice little package, the iPhone has already won acclaim based solely on the interface shown off at MacWorld '07 on Tuesday.

Many people have made already begun debating its appeal and whether or not it will be a revolution. What I find astonishing is that everyone is overlooking the implication this stellar new product has on the future of the telecommunications industry as a whole.

To start, Apple is releasing a high-priced (but still fairly accessible) device that will attract huge market appeal while causing those without the need for one to start paying attention. Apple will revise the device once or twice a year to accommodate new ideas and satisy more customer needs. At the same time, it is a good bet that they'll create another device with a trimmed-down feature set in a smaller form factor - akin to the introduction of the iPod mini after the iPod 3G gained widespread appeal. This is exactly the same tactic used for the iPod. Apple forges ahead with current products while progressively rolling out new, exciting products based on a need for a less expensive, less powerful device.

Let's take a look at the most successful cell phone to be released in years: the Motorola RAZR line. The RAZR currently holds the largest chunk of market share over any other device model in the mobile market, despite its lackluster interface. The question is, why?

I owned a RAZR V3 from November, 2004 to March, 2006. I originally paid $500 (along with adding two more years to my contract) for access to the latest and greatest cellular device around. For me, it was a status symbol. For the first six months I had the RAZR, people stopped me while I was talking on it just to ask if they could hold it. There were more than a few occasions where I overheard the phrase, "Whoa, that kid has the RAZR!" while walking through downtown Denver. I'm a technophile, and the RAZR was the symbol of my power as a geek.

Fast forward two and a half years. Apple's device will, without doubt, trump the RAZR's ability to awe. The RAZR, irregardless of its great physique, had one fatal flaw: once you starting using it, it was like every other Motorola phone on the market. Apple's iPhone is something everyone will want to touch, because that's where the phone's real cool factor lies.

As I said, people are missing the implications set forth by the iPhone. If Apple succeeds in winning a decent share of the market (and, honestly, its chances are better than not), many companies will be forced to play catchup. The design qualities of both the iPhone hardware and software present a very difficult challenge for the likes of Palm, RIM, Motorola, Nokia, and all of the other phone manufacturers out there. To compete, these companies will need to step up their game, and fast.

Apple has essentially set the market ablaze. One of two outcomes are possible: either the other companies will be forced out of the marketplace entirely (in several years, once Apple releases a few low-end phones) or they will catch up to Apple and the entire spectrum of cell phones will be vastly improved over the, well, crap that was released in 2006.

Either way, consumers win. Thanks, Apple.