Monday, March 29, 2010

Maybe Apple Should Share Its iPhone Plans?

There's been renewed speculation that a new version of the iPhone is coming out this summer and possibly a Verizon version as early as September (Verizon's network uses a different protocol than AT&T's does, so making a Verizon-compatible version is no small feat).

Successive generations of cellphones are strong substitutes for one another. It's understandable why manufacturers don't announce new models very far in advance, as they immediately cannibalize sales of the current model in the interim.

But Apple seems to be in a unique situation. Its iPhone is tied to AT&T's network, which iPhone users have been complaining about for years and which has been cited as the No. 1 reason not to get an iPhone. For customers already with Verizon, it takes an awful lot to switch networks (especially if you're under Mom and Dad's plan or if you're locking into a contract), so many of them are buying other smartphones instead. I would think that an official announcement of an imminent Verizon iPhone would be enough to persuade many prospective Verizon smartphone buyers to wait a few months, and that Apple would make more money in the end from such a move.

Then again, maybe Apple isn't making promises far ahead of time for fear of not delivering. Or for fear of giving Verizon too much negotiating leverage.


Adam Gurri said...

Tne iPhone and Apple are an interesting case. On the one hand, in general, Apple tries to hold information about future products very close to the vest, for exactly the reason you mentioned--it cannibalizes sales of the current versions of its products.

On the other hand, when it comes to the iPhone at least, Apple has created an extremely predictable cycle. Every July ever since there was an iPhone, it has announced the next iteration. It's pretty much a given that any new version of the iPhone hardware is going to be announced in July. It would be interesting to see what the June/early July sales of the iPhone look like, relative to the rest of the year.

Greg said...

Well, sure, but the predictability of iPhone releases are irrelevant if you're a Verizon customer (assuming you want an iPhone without having to switch networks).

Adam Gurri said...

On the other hand I think that a huge number of AT&T's new subscribers have been attributed to the iPhone, so I think that switching isn't entirely uncommon either. But I just meant for any potential purchasers of the iPhone.

Josh Hattersley said...

You've also got to take into account Apple's relationship with AT&T; the latter company has seemingly been willing to bend over backwards to maintain their exclusivity agreement with Apple on account of how many new subscribers the iPhone has netted them. The announcement of an unprecedented, contract-free monthly 3G plan for the upcoming iPad is a good example. Chances are Apple may have contractual obligations that prevent from acting in a way that would harm AT&T's business, until such time as a new non-AT&T iPhone is announced.

One could also argue that the ever-churning rumor mill does a better job of making new phone purchasers hesitant than Apple ever could; a Verizon phone (and really every conceivable permutation of an iPhone, ever) has been rumored for at least a year or two, and the iPhone is hardly three years old. And, to quote John Gruber:

"...what’s the argument for how Apple has suffered for its secrecy? Yes, Apple is far more secretive than most companies, but they’re also far more successful. Measured by profit and revenue and growth, wouldn’t it make more sense to argue that most companies should act more like Apple, rather than the other way around?"

That said, I have it on good authority that, at the very least, iPhone OS 4.0 with multitasking support will be coming (or at least announced) at WWDC this Summer. If you're in the market for an iPhone, I'd definitely put off your purchase for a few months to see what develops. I myself am definitely hoping for a Verizon-compatible iPhone, as I'd love to utilize my parents' family plan alongside a data plan; Verizon is pretty expensive, after all.

Josh Hattersley said...

Additionally: it's difficult to quantify, but I'd wager the rumor factory that Apple's culture of secrecy makes possible is worth a a huge sum in terms of free advertising. Announcing products ahead of time leaves little to the imagination, and means your product will get less time in the spotlight on rumor sites, pundits' blogs, and even major publications (see the WSJ article today on the possibility of a Verizon iPhone). People love gossip, and every bit of gossip that involves the iPhone is another free bit of grassroots marketing for Apple that keeps people thinking about their products.

Greg said...

Maybe you've got something with that speculation-as-free-advertising bit. I certainly wouldn't be writing about it otherwise, if it were being announced far ahead of time.

Adam Gurri said...

I can help quantify that last point, Josh. According to Engadget, during the event where the iPad was announced--an announcement that had been anticipated by rumors for months and months beforehand--Engadget's liveblog received more traffic than TMZ (the site that broke Michael Jackson's death) on the day that Michael Jackson died--by several orders of magnitude.

The hype surrounding what was then simply called the Apple Tablet was enormous. It translated into a huge amount of free publicity.