Well done, John Naughton.




The Networker
Why the iPhone won't rock your world

John Naughton
Sunday September 11, 2005
The Observer

The iPhone has arrived. Yawn. It was one of the worst-kept secrets of the technology world - that Apple had teamed up with Motorola to produce a mobile phone with an iPod inside. For months, Photoshopped fantasies of what the new device would look like circulated on the internet, no doubt elevating the blood pressure of Apple's CEO Steve Jobs, who is famously paranoid about the advance leaking of product details. But last week in San Francisco, Mr Jobs came clean, unveiling the Rokr (as in 'rocker', apparently).

In keeping with Motorola's recent design renaissance (see the ultra-slim Razr phone that is currently a prime cause of drooling among UK teenagers), the new device is nicely designed in two-toned silver with slightly rounded keys. Inside is a tiny 512 MB flash memory card configured to act like an iPod Shuffle. But it can hold only 100 songs at most.

Those who have used the Rokr say it's quite a good phone (with a camera, Bluetooth, speaker, voice dialling and reasonable battery life) but nothing special. And the (Motorola-designed) software is as uninspiring as that of the Razr. (Why is it that Nokia is apparently still the only company capable of designing an intuitive user interface for telephony?)

The music-player module works like an iPod - though it lacks the clickwheel that makes its big brothers function so slickly. But overall, the impression is distinctly underwhelming. The word on the streets is that far from being the revolutionary device that will bring about media 'convergence', the Rokr is, well, just the sum of its parts.

And that, it seems to me, is the most interesting thing about it.

Let me explain. The reason people were so intrigued about the idea of an iPhone is that it had the potential to make three hitherto-parallel universes converge. First, there was Apple's iTunes - the first, and still the dominant, legal online music business (which has sold half a billion songs since it opened). Then there was the mobile phone - the one modern device that has become ubiquitous in our lives. And finally, there was the iPod, the iconic gizmo that has become the Walkman de nos jours

Put these three together in a single device and - so the theory went - you had a truly revolutionary technology.

But it hasn't happened. Take, for example, the business of getting purchased tracks on to the Rokr music module. The obvious way would be to buy from iTunes and download via the phone network. But that's not the way it works: instead, you have to connect the phone to your computer (using a slow USB connection) and get songs from your iTunes music library - just as you do with a conventional iPod.

Here's another example. There's no technological reason why the music module in the iPhone couldn't hold 500 or 1,000 songs rather than the current measly 100; but if it did, then sales of existing iPod models might be undermined.

Similarly, there's no obvious reason why tunes stored on the music module couldn't be used as ringtones for the phone module. But that would undermine the mobile operators' lucrative trade in ringtones. (And, boy, is it lucrative: you can buy a Coldplay track from iTunes for 99 cents; but the same track bought at ringtone rates would cost $25.)

And as for the idea of downloading tracks directly to the phone via the mobile network - well, don't even think about it. Apple makes money from selling iPods, network-ready personal computers and online music. Using the phone network would bypass the first two of those cash cows.

I could go on, but you will get the drift. The real significance of the iPhone is the way it illustrates why companies find it hard to innovate. The difficulty stems from a simple, unpalatable fact - namely that radical innovation generally threatens your existing business model. Or, in MBA-speak, it cannibalises your core business.

The iPhone is considerably less than the sum of its parts for one reason: it was designed by a company that has become a prisoner of its previous success at innovation.

Apple's lucrative discovery and exploitation of online music transformed its image and its corporate prospects. But the assets it acquired in the process are now so valuable it would be corporate madness to do anything that might undermine them. And yet that is precisely what radical innovation would achieve. So Apple cannot do it.

It's a sad, but true, fact of technological life.

john.naughton@observer.co.uk">The Observer | Business | John Naughton: Why the iPhone won't rock your world: "The Networker
Why the iPhone won't rock your world

John Naughton
Sunday September 11, 2005
The Observer

The iPhone has arrived. Yawn. It was one of the worst-kept secrets of the technology world - that Apple had teamed up with Motorola to produce a mobile phone with an iPod inside. For months, Photoshopped fantasies of what the new device would look like circulated on the internet, no doubt elevating the blood pressure of Apple's CEO Steve Jobs, who is famously paranoid about the advance leaking of product details. But last week in San Francisco, Mr Jobs came clean, unveiling the Rokr (as in 'rocker', apparently).

In keeping with Motorola's recent design renaissance (see the ultra-slim Razr phone that is currently a prime cause of drooling among UK teenagers), the new device is nicely designed in two-toned silver with slightly rounded keys. Inside is a tiny 512 MB flash memory card configured to act like an iPod Shuffle. But it can hold only 100 songs at most.

Those who have used the Rokr say it's quite a good phone (with a camera, Bluetooth, speaker, voice dialling and reasonable battery life) but nothing special. And the (Motorola-designed) software is as uninspiring as that of the Razr. (Why is it that Nokia is apparently still the only company capable of designing an intuitive user interface for telephony?)

The music-player module works like an iPod - though it lacks the clickwheel that makes its big brothers function so slickly. But overall, the impression is distinctly underwhelming. The word on the streets is that far from being the revolutionary device that will bring about media 'convergence', the Rokr is, well, just the sum of its parts.

And that, it seems to me, is the most interesting thing about it.

Let me explain. The reason people were so intrigued about the idea of an iPhone is that it had the potential to make three hitherto-parallel universes converge. First, there was Apple's iTunes - the first, and still the dominant, legal online music business (which has sold half a billion songs since it opened). Then there was the mobile phone - the one modern device that has become ubiquitous in our lives. And finally, there was the iPod, the iconic gizmo that has become the Walkman de nos jours

Put these three together in a single device and - so the theory went - you had a truly revolutionary technology.

But it hasn't happened. Take, for example, the business of getting purchased tracks on to the Rokr music module. The obvious way would be to buy from iTunes and download via the phone network. But that's not the way it works: instead, you have to connect the phone to your computer (using a slow USB connection) and get songs from your iTunes music library - just as you do with a conventional iPod.

Here's another example. There's no technological reason why the music module in the iPhone couldn't hold 500 or 1,000 songs rather than the current measly 100; but if it did, then sales of existing iPod models might be undermined.

Similarly, there's no obvious reason why tunes stored on the music module couldn't be used as ringtones for the phone module. But that would undermine the mobile operators' lucrative trade in ringtones. (And, boy, is it lucrative: you can buy a Coldplay track from iTunes for 99 cents; but the same track bought at ringtone rates would cost $25.)

And as for the idea of downloading tracks directly to the phone via the mobile network - well, don't even think about it. Apple makes money from selling iPods, network-ready personal computers and online music. Using the phone network would bypass the first two of those cash cows.

I could go on, but you will get the drift. The real significance of the iPhone is the way it illustrates why companies find it hard to innovate. The difficulty stems from a simple, unpalatable fact - namely that radical innovation generally threatens your existing business model. Or, in MBA-speak, it cannibalises your core business.

The iPhone is considerably less than the sum of its parts for one reason: it was designed by a company that has become a prisoner of its previous success at innovation.

Apple's lucrative discovery and exploitation of online music transformed its image and its corporate prospects. But the assets it acquired in the process are now so valuable it would be corporate madness to do anything that might undermine them. And yet that is precisely what radical innovation would achieve. So Apple cannot do it.

It's a sad, but true, fact of technological life.

john.naughton@observer.co.uk