19 January 2007

Some Remarks on the iPhone (2)

(Part 1)

Wikipedia: A pseudo-event is an event or activity that exists for the sole purpose of garnering media publicity and serves little to no other function in real life. Since nothing meaningful actually occurs at the event itself, pseudo-events are considered “real” only after they are viewed through news, advertisements, television, or other types of media.

Promotional Photo of the iPhone

The release of the iPhone was the textbook case of the pseudo-event. The big news never was about the technology; the iPhone's features are actually fairly subtle refinements already found (for the most part) on the Blackberry Pearl and on older PDA's such as the ill-fated Apple Newton. Of course, a huge proportion of technical innovation is the best application of many subtle improvements, but this is fairly straightforward bundling of by-now conventional combinations. Apple's big money maker was the iPod; but it was obvious that Apple was missing out on the intimate computing cross-marketing opportunities as long as it was out of the PDA/cell phone business.

No, the real news was supposed to have been the ability of a new firm to enter, and shake up, the PDA/cell phone sector itself. In reality, Apple has become more of a marketing firm than an industrial one; it had to bundle technologies that are now commonplace, and manufactured by subcontractors just like any other gadget. Between 1995 and 1997, Apple Computer executive Gil Amelio had pursued a strategy of licensing the Mac OS to 3rd party manufacturers. This permission to make Mac clones was too short-lived to get very far; in '97 Steve Jobs returned to Apple and effectively terminated licensing. It seems to me that after Jobs rejected the idea of Apple adding value through technology development, there was little choice but for the firm to focus on being cool. Advertisements for the iMac (1998) and other products abandoned appeals to reason. Instead, we were urged to "think different," and posters used images of Albert Einstein, Jane Goodall, or John Lennon with Yoko Ono.

The obvious absurdity of using Amelia Earhart's image to promote the iMac was exacerbated by the fact that the iMac and subsequent products were actually substantially less useful to users than their immediate predecessors (e.g., the Performa). While the Performa was drab in appearance and very pedestrian in its choice of available technologies, the iMac had no floppy drive or expansion slots; it was supposed to relieve customers of the burden of choice. While the applied art was very dramatic, and won awards for its distinctiveness, it was actually fairly difficult to use. The anti-establishment conceit of the Macintosh had become radical chic at its most crass. Apple would face the very reluctant censure of worker health and safety watchdogs, or of environmentalists, as it lagged behind Compaq and Dell in recycling or toxic materials handling.

The pseudo-event of January 2007 was the self-congratulation of managerial elites in the USA: the market for high-end consumer devices really was susceptible to shakeup. Competition was still alive and well. The customer was sovereign. The risk of monopoly was a myth, and those who begged to differ were just losers, or worse. But Apple was not turning the market for anything on its ear. It was simply perpetuating the product cycle for an appliance-cum-fashion accessory. Beyond that, the release of the iPhone did not prove anything about consumer choices at all. The real struggle—between monopoly PCS's and their contending formats—is off the table.
And Cingular is the PCS in question. A partner with AT&T*,

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*AT&T is actually not the former AT&T broken by the US Supreme Court in 1984; it is actually the former SBC Corp., which acquired the 128-year old dinosaur in 2005, then began using its name about three months later. See Oligopoly Watch (1, 2). Earlier, in 2001, AT&T Wireless (a different company) was created as a joint venture of SBC and Bell South, plus 11 other regional PCS's. One of these core companies was a former mobile phone division of the original Ma Bell telecom monopoly, and for this reason SBC & Bell South decided to name their new wireless venture—with TDMA technology—after the still-famous dinosaur. Later, AT&T Wireless became Cingular Wireless, and merged with the newly re-minted AT&T (formerly SBC).
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SOURCES: Digital Trends: Apple iPhone Margin Crawls Toward 50 Pct (18 January 2007); Uncommon Knowledge: The iPhone: the good, the bad.. OK, it's definitely not ugly (14 Jan 2007); BoingBoing: the Roach Motel Business Model (14 January 2007) ; c/Net: Review of the Blackberry Pearl (September 2006);

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