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A leading innovation and marketing blog from Braden Kelley of Business Strategy Innovation

Thursday, June 28, 2007

iPhone Followup - Innovation in a Box


My initial iPhone article highlighted why the iPhone will not be a success in its first incarnation. Make no mistake though, the introduction of the iPhone will revolutionize the mobile telephony market. Let's answer some of the criticisms of the most innovative mobile handset in the history of mobile telephony:

Drawback #1: The lack of a keyboard with real keys is a drawback
Answer: There is no reason why somebody couldn't design a very sleek bluetooth keyboard is there?

Drawback #2: The AT&T Edge network is slow
Answer: People use mobile phones a surprising amount in their own home and the prevalence of free WiFi will continue to grow (including city networks). Not only that, but I'm sure AT&T will look to build a faster network, or partner with a WiMax network at some point (or at least offer it as an option).

Drawback #3: You can't assign a song as a ringtone
Answer: Just wait, it's coming...

That's the thing, unless the drawback is a hardware drawback like the camera they chose to go with, it can be added or fixed using downloaded software updates.

The most important impact that the iPhone has the potential to have, is to finally (dare I say finally again for dramatic effect), finally tip the balance of power in the industry to relegate the mobile telephony service providers to their deserved utility status. The iPhone has the potential to end the stranglehold carriers have had on application innovation and make the other carriers open up. Once the carriers begin to cooperate and actually help next generation handsets succeed, then we will see iPhone like features come to other carriers via other handset manufacturers and raise the mobile telephony experience for everyone.

If we are all lucky, then maybe at some point we will see Apple, and the competition that will inevitably emerge, gain the freedom to allow third-party software application developers to build direct OS applications and not just web applications.

Finally, the network operators need to accept the fact that it is bad for everyone to continue to try and control innovation in mobile telephony. The network operators need to accept that they are utility companies first, and potentially software companies second. The network operators have a big advantage over the handset manufacturers, and that is direct access to customers. They should leverage this access to uncover problems that need solutions and build a world class software organization around this access to seek their non-commodity profits and competitive advantage. If the network operators use their direct access to the customer to build better applications for the Smartphones they support, and stop trying to stifle innovation that they can't control, then we all win.

I look forward to owning an iPhone v3 in late 2008 or early 2009 for $299 and $40/month for unlimited data, unlimited text messaging, and 1000 voice minutes!

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