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Thursday, April 17, 2008

Apple Inc.'s iPhone is not Wham-O Inc.'s Hula Hoop

Except for the executives at DIS, DNA, NKE, and AAPL I know of no other corporations that have openly announced adoption of the iPhone by those in the executive suite.

I really don't care what CEO's and VP's carry in their pockets. I figure legions of field sales reps, real estate agents, marketing teams, pharmaceutical reps. construction engineers, skin doctors, and most important of all, college students, will soon be carrying an iPhone.

Apple is very responsibly issuing an iPhone Software Development Kit, surely more legions of developers will find employ in the endeavour to create applications for the iPhone.

The iPhone arrived not from a new product development team delivering their first prototype. This is obviously a crew with long experience making and marketing stylish consumer products. The Cupertino-based professionals have spent serious hours looking at every angle of product release and market acceptance, and continue to do so relentlessly. Contrary to the opinion of some sector analysts, Apple Inc. does put their business model and strategy out front and center for public scrutiny. All an observer needs to to is look in any direction where multiple humans congregate.
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Firemen carry an iPhone so they can receive large pictures of the burning buildings they are driving towards. First responders might also use them for receiving detailed instructions for handling unusual hazardous materials. Police walking the streets would use an iPhone for the same tasks they currently perform on the squad car laptop computer.

An oil rig worker might use the iPhone instead of lugging a laptop on and off the helicopter. iPhones might help some family people deal with the loneliness of life at sea. Baby pictures and other important email attachments look so much better on an iPhone than on those other tiny phone screens.
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Apple Inc's iPhone is not a product. It is a culture-changing phenomena. The start of a serious long-term trend, like electricity or the telegraph or early telephones only the wealthy could afford. The iPhone reminds me of the pink Princess-model telephone with the dial that lit up. Complete with a monthly payment that must be sent to somebody to keep the pretty light glowing and phone ringing.
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Compare the iPhone to the television set in the 1950s and early 60s. Only rich people had TV sets in my small town. The first TV screens were very tiny. Manufacturing limitations and the cost of making large cathode ray tubes were part of the problem. Most cell phones still have tiny screens mostly due to issues related to cost, portability, and battery life.

The polished rosewood veneer TV case was a very stylish piece of furniture that every single owner showed off when this little boy happened to visit. Many people bought TV sets on payment plans and still do.

Families saved their money to buy their first TV set. TVs cost of lot of money, money spent purely for entertainment and news broadcasts. Woman working at home raising a family found the TV, especially soap operas, enormously engaging. Presidential candidates quickly understood television time attracts voters.

Will the iPhone's features somehow be exploited by today's politicians? You bet!

Around the same time as TV sets became ubiquitous, really portable transistor radios hit the market. Soon every kid in town wanted to have a small battery-operated radio you could listen to on your way to school. The transistor radio soon had a cassette deck in it, later a CD player. Again, only the rich kids had them at first.
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Eventually I saved up enough paper route money and bought a radio that attached to the handlebars of my bicycle. I could listen to WFIL AM radio while I delivered newspapers! Believe me that radio was on and blaring when I rode up to show it to friends for the first time.

Hey, look at me, I have a tattoo on my breast, no wait, I have green and red spiked hair, whoa, I have a stud in my lip and another one somewhere else.

What do you have there? Dude, is that an iPhone? Way cool man, way cool.

The people I know with iPhones (myself included) appear to enjoy every minute of extra attention they draw. Chicks dig the iPhone, that is a proven fact. Cool dudes dig chicks that carry an iPhone. Besides it's a good sign her Daddy might be rich.

Do most kids have an iPhone? No way. But find me one teenager that would refuse an iPhone if the possibility arose.

Have radios, televisions and portable music devices ever really gone out of fashion since their inception? Will the mobile telephone industry slowly fade into obscurity? No way.

Just like the transistor radio or television, the iPhone and other smartphones are creating a new channel for marketing products directly to individuals.

I use it in my work to show people important images. It is easier than toting a pack of fingerprint-stained photos and less intimidating than pulling out a laptop computer.

"Sale going on now at Two Guys Department Stores, come on down for great deals!" now becomes a visually-rich, portable display of results with a clickable map to get you to the store before the sale is over. You can even check remaining inventory before venturing out the door. Go ahead, buy those stock shares you researched using the touch screen, while at the coffee shop, in Amsterdam or Cincinnati or Shanghai.

Nevertheless the pundits and defenders of the status quo still call the iPhone a passing fad. A shooting star. Morris Albert's song, "Feelings."

Anyone can plainly see Apple is no one trick pony. The iPod swept Sony's Walkman line, Creative, and a host of other competitors under the rug. Zune was DOA.

You really have to go to Apple's iTunes web site to fully experience the iPod or iPhone. iTunes is an essential part of the experience though you could survive by just ripping songs from CD's. This is brilliant, a thoroughly brilliant strategy designed to get more eyes looking at Apple's other products. Splash the site with music and the faces of U2 or nearly every other major musician including Paul McCartney and most other pop stars.

Provide a service or entertainment people want and they will come, again and again, especially young people. Like the movies, that takes us to movies on the iPhone or iPod or Touch.

The iPhone is a category-defining new product. From 0% market share on June 29, 2007 to #3 smartphone by December 31st, 2007. NOK, RIMM, Samsung, LG, MOT, or SonyEricson would sure love to repeat that performance. And maybe they will catch up to the iPhone one day soon, who knows?

Despise Apple for this stunning success if you must but do not compare the iPhone to the Hula Hoop or Frisbee or even Crocs. Well, maybe the Frisbee and the iPhone do have more than a few things in common! Give it a thought...
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Potential Civil/Military/Intelligence Uses for iPhone

In the not too distant past the military would have reserved an advanced technology device like the iPhone for themselves. In this case it took the demands of teenage web surfers and the savvy of Jobs & Co. to bring such a device to market. Current iPhones may lack GPS but they still have quite a knack for knowing precisely where they are. Military planners are probably intrigued just by the battery life of the device. iPhones will enter the public sector down many avenues. Here are just a few:

- First Responder Uses (WiFi or phone network flexibility, portable data & image viewer)
- Secure special operations or battlefield communications
- Secure operating systems, virtual private networks, and data arrays (BSD core, Trusted OS)
- Streamlined networking, storage management, and data communications using Apple Enterprise infrastructure
- Advanced display technology for mobile battlefield operations, real-time mapping, etc.
- Advanced handheld video conferencing technology
- Mobile wireless web servers running on iPhone platform for redundant battlefield communications systems
- Secure protocol support, i.e. Hackers are already running BSD core, SSH, Secure File Transfer Protocol (SFTP) and HTTPS services on iPhones.
- Improved Public Key Infrastructure (PKI) suitability and ease of initial deployment.

Related Sites:
Wham-O Inc. Corporate Site
Apple Computer Inc. Corporate Site
History of Television

NEXT: Apple's MacBook is no one hit wonder, more like the gift that keeps on giving.

The author has held Apple shares for many years and also holds shares in Broadcom, Hon Hai (Foxconn), and other related firms.

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