Tuesday, January 09, 2007

iPhone from Apple - success or failure?

Apple finally announced its iphone, read the story here.  Will mass hysteria result one more time and iphone become a phenomenon like the ipod or will it fall wayside just as another device that serves a basic necessity ?  I bet on the second.  Although the market reacted quite positively today to the announcement by boosting Apple's shares by almost 8%, I am skeptical of the momentum the device itself can build up in the marketplace. 

The device is going to be sold exclusively through Cingular and Apple is just making the wrong bet by just tying itself to one provider.  Whatever might be the transfer of payments between Cingular and Apple, the device is being restricted to one carrier and therefore Apple is losing out on almost 70% of the wireless market in the US till 2009 (when the exclusivity ends).  Given the pace of technology change in the telecom devices market, there is bound to be a killer device and Apple will not be able to garner the lion's share of the market due to its exclusive agreement with Cingular. Wake up Apple!

No comments: