Bottom Line On iPhone 3.0: Mostly For Developers, Not Consumers
This morning at Apple’s headquarters, just off Infinite Loop in Cupertino, Calif., reporters, analysts and developers arrived early to snack on bagels and sip coffee, eagerly awaiting juicy details on the iPhone’s latest software update. At similar events in the past, we heard industry-shattering news, like the advent of the Apple (NSDQ: AAPL) App store and the iPhone 3G. For consumers, today’s presentation was something of a letdown. The user features are nothing new and, in fact, amount to Apple playing catch-up with other smartphones. Far more significant were the announcements aimed at developers, who will now be able to create an array of cool new applications for the iPhone.
Among the standard consumer features announced today are: copy and paste, the ability to search emails and other content on the phone, and the capacity to send a photo via text message. Let’s contrast that with the tools that Apple unveiled for developers: Starting this summer, it will allow developers to sell subscriptions in the App store. So, for example, magazines can charge a monthly recurring fee, and game companies can sell more levels once a player has completed a certain stage. Although carriers have supported subscriptions for some time, this is new to the iPhone and other open-application markets, like Nokia (NYSE: NOK), Google (NSDQ: GOOG) or RIM (NSDQ: RIMM).
The company also announced peer-to-peer connectivity, meaning that multiple people can link their phones together to play a game, or swap business information (See the Smule example here.). Developers will also now have the ability to integrate their applications into third-party accessories, ranging from a pair of speakers to a heart monitor.
More after the jump on where Apple is going with its announcement today
Electronic Arts (NSDQ: ERTS) demonstrated how it might use some of the new features in the virtual-world game called TheSims. The company showed how a character could pay real money for something in the virtual world, like a home stereo to add to a virtual house. It wasn’t possible to sell things within apps before. In addition, the virtual character would be able to connect that stereo to an iPod and listen to music on the device. You can see how an app could easily make incremental revenues.
Clearly, Apple has prioritized making tools for thousands of developers, rather than using the limited resources it has in house to make applications themselves. In general, Apple’s internal development of applications has been very limited — and frankly, unimpressive. Leveraging developers is a not a unique strategy. In fact, Microsoft (NSDQ: MSFT) is famous for it on the the PC. One can argue that this may be the first mobile ecosystem successfully built and operated with the developer and consumer in mind. But there are companies close on Apple’s trail, so there’s no saying whether it will be the last.
yeh that's what I would have thought. One of the primary reasons someone would "jailbreak" an iPhone is because of the developer implications and what things it opens up for them.
Hi Tricia,
I disagree that the feature update was a letdown.
I think you'll find that many people are happy, finally, they have these features. I agree that they are playing catchup with other smartphones, but think about those other options… are they playing catchup with iPhone's Unique GUI and unmatched ease of use?
The iPhone is still a popular choice amongst consumers, and many new customer will be attracted with this updated feature set which makes the iPhone even more user friendly.
Thanks for your writeup,
Anthony.
I definitely don't agree with your premise. Opening all those APIs to so many developers will eventually pay off for consumers. Can Apple provide me with the same information ESPN does? No. But they can give ESPN a means to do so.
The Apple approach makes more sense than trying to do everything in house. When there was no API everyone in the press cried about it. Now they are improving it and that's wrong too?
Also – who is close on the trail? The Pre? Is the Pre the TRUE iPhone killer? I doubt it.
Have to disagree with you as well a bit Tricia. :)
The event today was specifically targeted to developers. I don't consider it a letdown that they then proceeded to focus the majority of the announcements on developers.
And the opening up of the API is a big deal. A major complaint of the devs (besides the lack of transparency in the approval process) is the sheer number of API functions that devs weren't allowed to us. Apple has opened up almost everything in that regard now and as a result we should see even more useful apps.
The fact that Apple is just now getting us the Push functionality though is ridiculous. They shouldn't have promised it to us for version 2.0 if it wasn't ready for prime time.
I do agree though that a few of the other companies are approaching the realm of real competition with Apple. And I disagree with Murphy, the Pre "looks" exceptional and if it works like they've made it look like it works its gonna be a hit. I know I have a few friends who are very excited about it. And these aren't early adopter types.
I think everyone is underestimating how powerful the "In App Purchasing" service is going to be, both for developers and for Apple itself. Combined with the one click purchasing from Apple's central wallet, this will open up a wide range of revenue sources for the ecosystem, making Apple the developer platform of choice, even when compared to big players such as Facebook and MySpace, where it' s much harder to monetize the audience.
Sean Ryan
Loki Partners – Monetizing Social Media
Hey guys, thanks for all commenting. I guess I'm a little surprised that everyone read my commentary as a "negative" thing. What I was trying to say is — if anyone was unimpressed with Apple's press conference yesterday because the consumer stuff they announced — like copy and paste — is not new or sexy enough, then just wait. Instead of focusing its time and attention on creating stuff for the end-user, Apple has been diligently working behind the scenes to make great tools for developers. The developers will be the ones who will make the next 10s of thousands of cool apps (not Apple, which has made "unimpressive" apps like voice record). But it will take a few months, or even a year….It's a smart strategy and one that's worked for others in the past (Microsoft). And sure, some of the things they announced yesterday, like copy and paste, will make consumers happy, but they are not gee-wiz new…not like the things they've done in the past that have revolutionized the industry (touchscreen, full Internet browsing and visual voicemail, etc…). Make more sense? It's ALL open for discussion!
Tricia
Tricia I get you now. It didn't quite come across that way in my head when reading through the first time. But maybe I was projecting annoyance on you. I had read a previous article by another author at another sight talking about how he thought the whole announcement was crap because they didn't release a net book at the iPhone Developer preview event as if that even makes sense. :)
Cut and paste, Bluetooth file transfer, MMS, huge improvement for the end user. All the things the iPhone was missing to begin w/. We new it was just a matter of time before Apple included these features. We don't have to buy new hardware to incorporate these "must have" smart phone features which was a huge disappointment with the release of the 3g. You are correct Tricia in that these features don't really have the "wow" factor. These features could've and should've been incorporated in the original software. They didn't mention anything about the camera. Could there be new hardware on the horizon that would introduce some more revolutionary features?
T.McCormick
Hit Happens Music
Isn't everything, even extra developer features, for the consumers at the end of the day? I got an iPhone last week partly on the basis that landscape keyboard is being more widely integrated.