The Peter Burrows’s BusinessWeek article, How big will the iPhone be? discusses the potential impact that the iPhone may have on Apple. Burrows projects that the iPhone could translate into a $10 billion business for Apple – even in a crowded and competitive market. No one questions Apple’s brand strength and the fact that there is currently a large existing iPod customer base who will be lining up to purchase this phone, but the fact remains that the cell phone industry is crowded and highly competitive.
Two initial questions that popped into my mind were: (1) wouldn’t it have made more sense to offer this phone as an undocked phone – one that anyone can buy and add it to their carrier of choice. That way you don’t limit your potential customer base to those willing to go with the AT&T network. (2) Given the need for bandwidth for some of the phones services, wouldn’t it make more sense to focus the initial push for this phone in Asia and Western Europe? These two regions currently employ 3G networks, whereas in the U.S. 3G networks are not nearly as widespread.
While the early months of the launch will most likely contain some bumps and bruises, overall it will be very successful. But, whether the iPhone dominates the market will be determined by, in part, how successful this product is with corporate users. Currently, it is suggested that the iPhone will not support Outlook very cleanly out of the box. This will negatively impact the iPhone’s numbers – as potential buyers stick with their Blackberry’s and other smart phones due to the lack of Outlook support. In the end, Apple will go from having no presence in the cell phone market to being a major player in this space virtually over night.