Why Apple IPhone cannot succeed!!

Once again, Apple has introduced a great product ... iPhone ... that no one will buy! At most, Apple will gain about 1 percent of the cell phone handset business. They've got about 2 percent of the PC business (some claim its 3 percent) and have no realistic hope of gaining any more PC market share. The same situation is true for the iPhone. Why? There are two reasons.

1. The price is wrong! Simply stated ... they've priced themselves out of the market ... they will never get large scale adoption at $600 dollars per phone. Never! Not when most people are getting very nice phones, subsidized by carriers, for $50 and $100. No Way! They can't introduce a lower priced model because they'd completely burn they entire Apple fanboy/stepford population that is the entire market they sell to now. Price is only a small impediment or no barrier at all for these Apple wackos. Sadly for Apple Inc. the apple geek/nut case crowd (which includes the mayor of Philadelphia) are less than 1 percent of the handset population. So yeah, they'll camp out but everybody else thinks they're crazy for do so.

Also, the crazed Apple fan phenomenon tends to be pretty much a uniquely American thing. Apple is well aware of this. Did you notice that Apple took a nice long while before they even introduced iPhone in Europe. That was no accident. There will be very little of the all night vigils in Europe of iPhone and almost none in asia.

2. Its not that great of a phone. Its got a great web browser, but the main thing people do with a cell phone is reach in their pocket, enter numbers and place a call. Grandmoms do it easily, with no training. Its the chief purpose of the device. With the iPhone its not super easy to do that as its primary use. This simple fact harms adoption. Even Jobs acknowledges this. He said in his keynote that dialing numbers on a keypad was archaic and needs to be updated by voice dialing and visual voicemail. Sorry Steve-o the keypad on a cell phone is just an example of a great UI. Simple, intuitive and effective.

Unlike the PC marketplace, the handset market is filled with strong competitors reading their attack plans. Multiple OSes, handset designs and form factors. Nokia, LG, Samsung, RIM and a host of smaller manufacturers offering Linux based handsets with touch screen interfaces remarkably similar to iPhone. All of these are less expensive than Apples product and are coming to the market in a steady stream day by day.

Apple has a software problem. The main advantage iPhone has is software. As Bill Gates put it .. the "magic sauce" in iPhone is software. For years now, Microsoft has been giving Pocket PC users a horrible version of IE in their hansets. Apple saw this and provided an excellent browser in iPhone. This enables a great broswer experience over wifi and a really nice email app. Opera has been doing the same thing for years in relative obscurity and with no marketshare. Its time for somebody like Nokia, Palm or maybe Google to acquire Opera and go to war with a simple, inexpensive handset with wifi and a great browser. And dont forget Microsoft. Pocket PC was all but unusable when it began its existence but MS saw Palm as threat and focused on defeating that threat. Now, after being embarrassed by Safari in iPhone ... MS , in 6 months I predict, will have an excellent browser in Pocket PC devices. Google is coming too. Unlike Apple, Google only wants only massive worldwide adoption. They aren't interested in 200 percent markup on each unit sold. They want to sell 15 million units and would love it if 10 million of those units were in Africa where cell phone adoption is soaring. Two Google moves are telling. The acquisition of Grandcentral.com provided a great voicemail, contact list solution that is software based and hence scalable to worldwide proportions ... twenty, 40 or 50 million new users - no problem (MSs purchase of tellme networks was a smart defensive move). Second, Google has been showing telcos mock ups of a simple gPhone. Free or very inexpensive for users ($25-$50 ... similar to current prepaid phones) ... free add supported calling ... a simple broswer to allow text searches, email, phone directory pages searches and text chat ... and a voice recognition software based (think scalable) directory service. If they include wifi, which the small hardware vendors they've talked to likely will .. who will buy an iPhone?

Even the Apple fanboy wackos will say why did I give Apple $600 for this? when they glance over at the person sitting next to them on the train using a $25 gPhone to look up Apple's sinking stock price.