GREG PACKER was No 1. The single 43-year-old retired highway maintenance
worker started queuing for Apple’s hotly anticipated iPhone at 5am last
Monday.
He became quite a media celebrity, conducting interview after interview, even
flashing his hairy belly at the more attractive female reporters.
“I’ve been interviewed too many times to remember,” said Packer, looking over
my shoulder to see who was up next. “My friends must think I’m crazy. If I
wasn’t here I’d be on the beach looking at girls. But I can do that here.”
In all the brouhaha he almost seemed to have forgotten about the iPhone.
The American launch of iPhone was a marketing event closer to the release of a
new Star Wars movie or the comeback tour of some 1980s rock legend, given
the largely male and middle-aged crowd.
Following relentless media coverage, queues started forming outside Apple and
its telecom partner AT&T across America early last week. On Craigslist,
people offered to queue for those who couldn’t face the wait. On Thursday
reporters and camera crews from Japan, Germany and Britain outnumbered
hopeful customers at Apple’s Fifth Avenue store in Manhattan.
By Friday, after two days of sweltering heat and two nights of thunder, rain
and warnings of flash floods, Packer and the early crew had been joined by
hundreds of others.
Huge crowds surrounded the media scrum and cheered when Apple opened its doors
at 6pm.
For those who have somehow missed the hype, the iPhone is a combination of
mobile phone, Apple’s hit iPod music and video player, a web browser,
personal organiser and camera.
The touch-sensitive screen allows users to flick through their music, expand
photos with the tips of their fingers, scroll down and zoom in on web pages.
All in a covetable pocket sized block.
It’s the sort of technology seen in sci-fi films. The prerelease reviews –
with a few caveats – have been glowing. Bloggers are calling it the “Jesus
Machine”. Now the iPhone, and Apple, face their real test: the consumer. IN
his 30-year career, Apple co-founder Steve Jobs has rewritten the rules in
three industries: personal computers, animation and music.
In the late 1970s Apple pioneered the personal computer, introducing the
general public to on screen icons and the mouse. In 1986 Job bought Pixar,
the computer-animation studio now owned by Disney. Pixar’s films, including
Toy Story and Finding Nemo, set a new standard for animated films, and
inspired a new generation of animated block-busters. In 2001, Apple launched
the iPod and made downloading music mainstream.
There were PCs before Apple, computer-animated films before Pixar and digital
music players before the iPod. But in each case Apple succeeded in turning
niche products into mainstream markets.
The company once had a reputation for innovation that was matched only by its
failure to capi-talise on it. Its computer sales are still niche – 5% of the
American market. But they are growing faster than rivals including Dell and
Hewlett-Packard and were up 30% in the first quarter of this year compared
with 2006, according to research group Gartner.
More than 200,000 companies have signed on in the past year to create
Apple-compatible products, a 26% increase from the year before.
Some 70% of new cars in America have iPod connectors built in, and about
100,000 air-line seats will have the same. Apple’s online iTunes music store
has become the world’s third-largest music retailer after Wal-Mart and Best
Buy.
The iPhone enters an already crowded market. There are plenty of rivals, such
as Blackberry, Nokia, Motorola and Palm, offering many if not all of the
iPhone’s features. But no other mobile phone comes with the Apple magic.
Wall Street, too, seems sure Jobs is about to work his magic again. Apple’s
shares have been soaring for the past two months.
But the hype also represents something of a risky bet for Apple. With
expectations set so high, disappointment could deal a blow to the
Californian company’s vaunted image and its business.
“They don’t have a lot of room for error,” said Marc Gobé of marketing expert
Desgrippes Gobé in New York. “That said, I want one.”
Gobé said Apple was capable of generating this sort of hype because it had
succeeded in turning its products into “celebrities”.
“Their products appear on the front of magazines. The iPod was on the cover of
Time,” he said. And Apple had largely achieved this by offering beautiful
and innovative products rather than spending huge sums on advertising, he
said. “Advertising is dead, design is the new advertising,” said Gobé.
Like the iPod and many of Apple’s other products, the iPhone’s minimalist
styling – it has only one button on its front – is the signature of Jonathan
Ive, the award-winning Brit who is Apple’s senior vice-president of design.
Ive received the first public phone call from the iPhone during Jobs’s
two-hour presentation at the Macworld conference in January. “It’s not too
shabby, is it?” Ive told his boss.
But there are many who doubt that the iPhone can hope to match the success of
the iPod. With two models priced at $499 (£249) and $599, the iPhone is
significantly more expensive than its rivals.
AT&T has an exclusive deal in America with iPhone, meaning that many potential
buyers will have to change their service plans to buy one. Corporate
warriors may be reluctant to trade in their Blackberries for a phone that
may not be compatible with their work systems and AT&T does not have the
fastest network in the US.
Nor is it a given that everyone will want a phone with all these bells and
whistles, no matter how beautifully they are packaged.
“Our surveys show most people just want a phone that makes calls,” said John
Barrett at research group Parks Associates. Parks found that only 3% of
American consumers expressed a strong interest in purchasing the iPhone at
$499.99 with a two-year contract.
But 3% of America’s $140 billion mobile-phone business is “not too shabby” and
Apple has already shown that its fans are prepared to pay a premium for its
products.
The iPhone is unlikely to land in Britain before Christmas. Apple is looking
to strike an exclusive deal with a European mobile firm similar to the one
it has with AT&T. Vodafone, O2, Orange and T-Mobile are all competing for
the contract.
“The iPhone will be an enormous phenomenon,” said Char-les Dunstone. chief
executive of Carphone Warehouse.
“It is beautifully designed and its touch-screen interface and user-friendly
software offers a total solution, which separates it from all other handsets
in the market place.
“Most of us don’t use the full functionality of our mobiles, but the iPhone
has the potential to normalise the use of content, making previously
complicated features accessible and easy to use. The Apple brand is amazing
and I have no doubt that the iPhone will be well received.” Reserved telecom
executives expect iPhone to be a significant boost for whichever company
wins the contract.
“Style is very important in the UK,” said one. “It’s one of the reasons that
the churn rate there is so high.
“It’s all about the phone.” Fighting past the crowds on Friday evening, Traci
Potter couldn’t have disagreed more. The New York make-up artist said: “It’s
ridiculous. That phone must have special powers.”
