Apple iPhone Will Fail in a Late, Defensive Move (2007) | Hacker News Reader

Apple iPhone Will Fail in a Late, Defensive Move (2007)

bloomberg.com

123 pointsJoeCortopassi125 comments

The best quote in the article:

"The iPhone will not substantially alter the fundamental structure and challenges of the mobile industry," Charles Golvin, an analyst at Forrester Research Inc., said in a report this month.

There are three reasons that Apple is unlikely to make much of an impact on this market -- and why it is too early to start dumping your Nokia shares.

This is comedy gold, but is also a good reality check about the mainstream news we read today. Not all predictions made by supposed experts will be accurate.

And not all purported experts are even experts (no surprises here, I'm sure).

I don't know anything about the analyst referenced in the article, but there are two factors contributing to these types of prediction errors.

1. Most analysts don't have prior industry experience in their field before becoming an analyst. Although they (usually) pick up enough as they go along to understand the terms and major issues, they have little depth and are unable to reason from first principles. I work for one of these large analyst firms and my estimate is that less than 10% of our analysts have relevant industry experience. We are not unexeptional in this.

2. Vendors invest heavily in analyst relations. While this helps to better inform the analysts, it also pushes the vendor's world view. Invites to conferences and events, access to senior execs, early access to information, etc. also help reinforce the bond between the vendor and the analyst. So, not only are analysts biased towards that which they know best, it is also harder to write something negative about a company/product where you personally know the people involved.

From what I understand, it doesn't matter so much if an analyst's forecasts are wrong, so long as they keep their bank's high-touch clients in the loop with vendors (trade commissions). Clients value this kind 'soft' information more than they would over some dodgy EPS figure.

""The iPhone will not substantially alter the fundamental structure and challenges of the mobile industry," Charles Golvin, an analyst at Forrester Research Inc., said in a report this month."

I'd actually argue that the quote above is substantively correct (in the US).

2006: Phones are sold largely on contract, by various retailers, including the manufacturer; churn is driven largely on pricing, network performance, and network-effect factors.

2014: Phones are sold largely on contract, by various retailers, including the manufacturer; churn is driven largely on pricing, network performance, and network-effect factors.

The iPhone changed the experience of using the mobile phone, and what we did on our mobile phones - not how we buy them, nor did the change the base reason people switch carriers - not in the long game anyhow, people still switch because of dissatisfaction with their existing provider, or that the grass appears greener on the other side.

Data became significantly more important.

We went from being nickel and dimed on minutes and SMS with unlimited data to being nickel and dimed on data with unlimited minutes and SMS.

And before the iPhone data charges where horrific, £/$/€'s per MB (not GB). If you were only nickel and dimed you were doing well. To get the initial exclusive iPhone contracts the telcos had to offer unlimited data which made a smartphone useful in a way that the earlier models weren't.

That is how the iPhone changed the market for the better at least in the UK and even if you don't have one. Competitive pressure may have caused it to happen eventually but we can all thank Steve Jobs for speeding up that important change.

It has significantly increased the challenges for telco's in they are increasingly a dumb pipe (e.g iMessenger) and limiting their ability to value add or profit take.

And for manufactures it opened the way for software to overtake hardware as defining feature of a phone, a massive structural shift in the industry IMO.

You're cherry picking a small part of the industry. The carriers. For the broad mobile industry, the changes have been fundamental.

Feature phones are Dead. Traditional Phone Manufactures are on life support. Blackberry is dead, Nokia is losing their shirt, they are losing money. Samsung and Apple together are taking 103% of the profits in the industry. Hey, that doesn't add up? Well, because the competitors are at -3%.

The app ecosystem has paid out $15B+ in revenue to developers. This is a fundamental market shift for phone application developers.

These are fundamental and important shifts in the mobile industry.

This is telco, not mobile industry.

You cannot possibly legitimately believe this claim. You must have fallen far, your type of correctness is utterly naive.

If I've learnt nothing else over the last 25 years, I've at least learnt that 99.99% of analysts couldn't find their arse if you not only gave them a map but stapled the map to their hands, their hands to their arse, and pointed at it shouting "IT'S THERE! THERE! THERE!"

I wish I could get paid to spout nonsense all day long with no repercussions on the accuracy.

And I bet Charles Golvin now has an iPhone, probably two of them.

For a mere $199 you can get his thoughts on the latest iPhone models.

http://www.forrester.com/Apple+Doubles+Down+On+Its+Premium+B...

I love this one http://www.youtube.com/watch?v=eywi0h_Y5_U - Balmer, I miss you.. there will never be someone so clueless as you.

Ballmer and others were not wrong to laugh about the iPhone because it was just a bad smartphone compared to what was available at that time for someone that wanted to do more than browse the web. Until iOS 5 and 4S one would be making significant sacrifices when choosing an iPhone.

Thanks to playing their cards right and arrogance and stupidity on part of Nokia they won, but it wasn't always clear it would be like that.

>Ballmer and others were not wrong to laugh about the iPhone because it was just a bad smartphone compared to what was available at that time for someone that wanted to do more than browse the web.

That's totally untrue. It destroyed everything of the time -- I know, I had smartphones since 2000, Sony stuff, Nokia stuff etc.

Same here, I've been using WinMo for quite a few revisions and prior to that I had two Treos. The iPhone was an excellent smartphone that was as usable, if not more, than the others for day to day use.

It was bad in many ways, but extremely good in (at that time) unexpected ways. I remember I held off from buying the first one when it came out because of the bad things (the camera, for one), but from the moment the iPhone was unveiled I knew I would buy one as soon as these things improved. I think many others thought the same thing.

iPhone 1, the one without appstore and 3G destroyed everything? :) I would say a phone like e90 or P1i let you do much more than the iPhone allowed you to, it was barely smart in any way.

I don't understand why people like to rewrite history. At the behinning the fight wasn't at all decided.

I'm not sure you remember what smartphones were like circa 2007. http://cellphones.techfresh.net/lg-env-smartphone-hits-veriz... I know I do.

I used to have this bad boy http://www.asus.com/Mobile_Phone/P535/ and as hard to believe as it might sound, there is nothing current smart phones can do that it could not.

My iPhone experience started with the 3G. It did everything I had previously used a "smart" phone for, in addition to the tasks I had for my iPod and Palm V: contacts, calendar, appointment alarms, phone calls, music, email, web browsing.

That's pretty much the core of what I still use a smartphone for. My iPhone is sitting here next to me playing me music as it has done all day, keeping me in touch with my partner who is interstate, reminding me that I have to put the bins out tonight, and otherwise staying out of my way.

What else did a smartphone need to do that the iPhone couldn't?

Until the 2008 (3G) here wasn't an app store. If you didn't saw what was possible in a jailbreaked version and belive that Apple will fix some of the biggest problem it actually was a fairly expensive toy.

and there's nothing my MBP can do that a ZX80 couldn't.

I got on board with the 3GS and IOS 3.0. I can't say that your complaints are justified. The web experience was pretty good because you would 'zoom' in on the part of the page you were reading. It had enough memory to run 1 app at a time but each app worked smoothly. I also jail broke mine and was using ssh to login to my home PC while on the bus to work and it was pretty epic at the time. No other phone could do that kind of thing and now I guess the rest is history.

I also jail broke mine and was using ssh to login to my home PC while on the bus to work and it was pretty epic at the time. No other phone could do that kind of thing

PuTTY has been supported on Nokia phones since 2004: http://s2putty.sourceforge.net/news.html

I didn't use it, but I did have a Python interpreter running on my E65 (with APIs for camera, GPS, calling, etc) before the iPhone 1 was even released.

There was no SSH client for Windows Mobile? Or the Nokia N? Or go back even further to the Danger Sidekick? Not saying the iPhone wasn't a smoother experience but other phones could do "that kind of thing".

I used my clamshell feature phone to login to my home pc via ssh. Granted, the typing experience was pretty painful, but it did work. People seem to forget that 'app stores' have been around a lot longer than the iphone. It's just that the earlier versions of app stores, carrier decks, were managed by carriers who cared a lot more about preventing apps from interfering with their business than they did about providing their customers with good, useful apps. And they ran on operating systems that were customized or custom written by carriers who saw them primarily as a marketing tool useful for pushing their more expensive services.

http://www.midpssh.org/

>People seem to forget that 'app stores' have been around a lot longer than the iphone

And they rightly forget them -- they were awful, over-expensive crap. $10 for some BS casual game, $30 for a TODO app etc. And don't get me started on the Java ME crap.

I think that more importantly they were either run by carriers or crippled by carriers.

iPhone changed the whole carrier/manufacturer/customer dynamic for the better (this is coming from a diehard BlackBerry user).

Tell me, which sacrifices did I have to make with iOS 4 and my old iPhone 4? Because I remember jailbreaking, installing SSH servers, custom apps, and stuff like that. It was the most full-featured phone at the time.

At the time of the video I think this is a very good response. It didn't take until the 3GS to sway me over to the iPhone, because of simple things that Apple didn't get right first time, such as limiting satnav apps, no copy and paste, the infancy of the app store.

And he's right about price. The iPhone was not cheap, and there is a market for cheap smartphones. I think what they missed is what was happening with Android as that is what stole the market he was aligning Microsoft towards.

Not once did he say it wouldn't work for Apple. He reaffirmed their vision at the time and concluded saying "lets see what happens".

What Microsoft failed to do is innovate on their own products hard enough. And sadly for Microsoft, their consumer brand is just not as cool as Apple and probably never will be.

This was one of the easiest things they could have gotten right. A phone you buy from the manufacturer instead of the carrier? That was revolutionary ... Verizon sold gimped versions of the RAZR and then charged you a monthly fee to ungimp them!

That wasn't the only factor; all my Nokia phones I purchased from Nokia directly.

This.

In Europe, carrier and manufacturer were decoupled for some time before iPhone, so it was not revolutionary in that regard.

Were they actually generally ever coupled in Europe in the first place? In Finland they weren't.

It reminds me of stuff like these:

> Crytek jumps on Steam Machine hype train, announces Linux support[1]

[1]: http://arstechnica.com/gaming/2014/03/crytek-jumps-on-steam-...

Scary thing is, he is now Principal Analyst at Forrester Research.

"Lead analyst covering all aspects of consumer mobility and the digital home. Responsible for a continuous stream of research and strategic advice to leaders at Fortune 1000 companies."

It's easy to say this writer and those cited in the article were wrong. More broadly, reading this reminds me of an Economist article from a couple years ago discussing how Fuji and Kodak took different paths when digital cameras took off, and the choices made then led to the companies' positions today (one defunct, one doing well).

What I took from that Economist piece wasn't just the history lesson, but the reminder that what looks wise in the near term (what Kodak did) isn't necessarily best in the long term, and vice versa. In fact, Kodak likely sowed the seeds of its demise when they took the lead position in the digital camera space. So re-reading this iPhone piece merely reminds me how difficult it is to prognosticate, and that’s an important lesson for those of us in guiding roles, both personally or professionally.

http://www.economist.com/node/21542796

I generally agree that hindsight is 2020, and its hard to tell who's wise vs just throwing darts.

However, not all types of prognostications are created equal. A big part of identifying trends and devising strategies is being able to sort out what's worth getting on top of, just watching, or dismissing outright. Same for journalism.

This article was a typical counter-hype pageview driver pounded out for a deadline. The writers job was to make a plausible-sounding story for the opposite side.

Its the plausible-sounding story part thats tripping people up here. Here's what he did: * He says everyone is going gaga over it * He gives a bunch of reasons why they'll have a tough time in the market * He cites a random analyst * He muses his personal take on its market feasibility and makes a strawman argument about it being a 'defensive product' that he summarily knocks down * He concludes, decisively, that nothing is going to change

We've all read this article. Its like the 5 paragraph essay from grade school. And like the 5 paragraph essay, it can be graded for how much it makes sense.

Just on cursory view, he clearly hasn't done his homework on Apple or consumer trends. Namely, he doesn't address the success factors and relevant details of the iPod.

1. He cites price as an issue (but the iPod was almost the same price, anchoring high end value before dropping in price to get mass market scale).

2. He mentions people really excited about the iPhone but later muses he doesn't know who its targeted at (how does he think Apple sells things? tech specs?).

3. He suggests the playing field is level against competing models (ignoring the demonstrated ecosystem power of iTunes, the fact that no ecosystem exists in phones, and of course, ignoring the holyshit demo that showed iPhone's superior usability).

4. He says at the end an outside player may come provide competition but they'd have to bring some new tech or different user experience (ignoring the decades of R&D groundwork and IP portfolio that Apple laid for the iPhone, all the way back to tech demos in the 80s and the Newton in the 90s).

In other words, he's probably dodging the issue or doesn't know anything. This quote is great:

"Likewise, who is it pitched at? The price and the e-mail features make it look like a business product. But Apple is a consumer company."

He's grappling aloud with a square peg in a round hole of his own making. Like the rest of the article, nowhere in there is the author demonstrating an ability to imagine something that does not exist today - the basic skill required to understand the history of technology.

To a reader without any industry knowledge, at the very least the context of what type of article this is (a counter-hype story), the logical inconsistencies within the arguments, and the complete lack of imagination would raise a flag about how valid this piece is.

To a reader with industry knowledge, they'd see points 1-4 not covered and think this guy shouldn't have his job.

-- Now to your example, I don't think these are the same type of prediction.

That the iPhone would be a general market success was an easy prediction, because the playbook and success of the iPod was right there, and it was easy to see that phones were going to be like the iPhone once it was shown, because it was that much better.

The Fuji vs Kodak is a hard prediction, because those companies are having their core business models threatened by an external change looming over them. The change here isn't about the success or failure of a product, it's about whether companies can manage a transformation. Transformations are hard and messy, and hard to predict.

I see the 'its hard to predict the future' argument as more than a little bit similar to "correlation is not causation" that seems to pop up here occasionally. Yes, correlation is not causation, but it can imply it, depending on the circumstances, measurements, R^2, etc. Similarly, the conditions for a future prediction depend on what information we have, what the context is of change, what we're trying to predict, etc.

The only thing I think where the iPhone prediction was difficult was just how crazy a success it was. But whether it was going to be a general success or general failure? For anyone who knew a bit about the iPod, that should have been answered the moment they saw the demo.

EDIT: All this said, I definitely agree with the important lesson to balance short/long term and not try to over-predict the future, especially when it comes to the path individuals are on. I think thats what you were getting at at the end. Wisdom of this kind is important in this (young) community.

A lot of people saw the potential but in 2007 there still were worries. Apple whould have been crazy not to let people develop app for the device but it wasn't possible until july 2008. Also many programmers were worried on how who apple would run their store as soon as they annunced it on march 2008 soon.

And I would say that at least until iOS4 (2010) the jailbroken version was still better than what apple was doing.

Correct easy to point the finger after the fact however this is not a one of case, specially of now it all wallstreet firms and analysts. The source evades me but there have been more than one bloomberg articles brushing of a new technology as a small stint and "fan club". And i think it is fair to rub it into the faces of firms like bloomberg and economist whom have a "mater of fact" stance/tone.

P.s. speaking of Kodak, I give them +1 for still producing film stock (and continually improving it!).

I give them -10 for their medical imaging equipment. Its god awful. They sold it off, but the invention of it just kills me. Try logging in with a long password on a software keyboard when the touch targets and display image are off. http://www.blockimaging.com/items/kodak-directview-cr-825-cr...

True but I bet some people are better at predicting than others. Would be interesting to collect and analyze peoples predictions. Example stock market.

The main thing I take away is: don't be so sure. Your ability to predict what's going on five years from now is probably not great.

Insert tired Gretzky quote about skating to where the puck is going....

The author subsequently scored a gig at the WSJ with multiple columns.[1] Funny how the ability to accurately comment on industry is not a useful qualification for being employed to comment on industry. :) (Written somewhat tongue-in-cheek obviously, I'm sure he has gotten lucky before with predictions before too.)

[1] https://twitter.com/mattlynnwriter

I love that this article wasn't just wrong, it was _spectacularly_ wrong. I remember thinking many of these same things at the time. This especially would've rung true:

Will your accounts department stump up for a fancy new handset just so you can listen to Eminem on your way to a business meeting?

At the time? Of course not! Today? Standard equipment.

I'm curious as to why this doesn't affect the credibility of the writers that publish this sort of garbage? Matthew Lynn, the author, has continued on over the years to publish stories for the WSJ and HuffPost.

Do you expect to get fired from your job if you make a single wrong decision or prediction? I can't speak to this particular writer but a lot of very intelligent, insightful people have been very wrong about important things and still managed to maintain their credibility by being right about other things (and for being wrong for credible reasons).

The big thing that helped the iPhone take off, the App Store, wasn't out yet. Things changed rapidly.

They don't get paid to be correct, they get paid to get hits on the site. At the time a computer company making a phone was a very easy thing to look at and say it wasn't going to work.

Credibility or marketability? The publications only want pageviews. Articles like these get them, whether they end up being right or wrong.

At the time they may have been right, but the truth involves a time element. At closer look, it shows how immensely popular and desired what Apple was bringing to market was to overcome opinions like that. Back then that was the reality.

I think when you go back and look at changes, many time it focuses on mainstream people who were wrong. But it was really everyone in the industry was wrong at that time, and shows how amazingly time and innovation through research and development can unseat the current reality.

I know I realized how big it was the moment I read OpenGL ES and the announcement of the SDK at the Keynote in that it was a new handheld gaming market. However I thought it would be a smaller market like the current social/casual game market at the time. It turned into engulf and change the entire thing and has the biggest player population of all now while putting the other companies in defensive positions (Nintendo/Sony/Microsoft).

The general public has short memory. The 'analysis industry' take advantage of that.

Apple stock when this came out: ~$94.00. Gains to date: ~456%.

Doesn't look to bad to me! Now lets look at the cash hoard Apple has: it is enough to buy Nokia and Motorola numerous times over.

Now if only the author of the article would have written about 'apps'. Would he have labeled them as niche as well? I would have loved to see an argument in 2007 for the multi-billion valuation developers are getting now.

When the iPhone first came out there were no native apps. Only web apps. There is no way people would be making this much money if Apple hadn't opened up the platform.

In fact, I seem to remember that people were pretty much immediately complaining that there was no (official) way to bring third party apps to the iPhone (except for web apps).

If I remember this was also a major criticism: Some other phones at the time could install third party software, the iPhone could not.

However, despite the ability of installing third party apps existing in many phones, that never really took off before the iPhone SDK came out.

(Also, the iPhone did have a relatively slow start. It sold well and along with what Apple was publicly stating as its goal, but it took a generation before the phone really did take off like a rocket.)

> If I remember this was also a major criticism: Some other phones at the time could install third party software, the iPhone could not.

> However, despite the ability of installing third party apps existing in many phones, that never really took off before the iPhone SDK came out.

To be fair, though, the iPhone was also being compared against the PDA market of the time, where 3rd party apps had existed for a decade or more. In that regard, the iPhone was a partial step backwards (at the time). It gave all the connectivity a PDA user could want, but none of the apps that they were accustomed to. The PDA use-case was also why people thought it couldn't work without a stylus. For 15 years that's what PDAs had and it worked pretty well. The change in UI was significant for people making comparisons to that market, and not just the Blackberry market (which, at least all the ones I ever saw, relied more on the built-in keyboard than a stylus, did they ever have a model that used a stylus?).

I've heard some claims recently (perhaps true) that Jobs didn't want third party apps, but at the time the interface was so obviously suited for apps that I assumed that they simply hadn't had time to put together what was needed for third parties to build apps. At the time they talked about web apps, but it felt like stalling, then a year later the app store launches.

It's true (apple fanboy here, I remember it well). He was adamantly against them. If you look around, he did a whole keynote where he tried to present web apps as just as good as native apps-- it was ridiculous.

He'd been dead wrong before as well: just a few years before the iphone, when people wanted to see an ipod with video capability, he said nobody would ever want to watch video on a mobile device.

It really bugs me that apple makes these "nobody would ever want" proclamations and then reverses itself without saying, "we goofed". The next one coming is 5+ inch screens for the iphone. They'll make no mention of the fact that they criticized large screen phones before ("look, my thumb goes from corner to corner!"). Oh well.

> It really bugs me that apple makes these "nobody would ever want" proclamations and then reverses itself without saying, "we goofed".

Apple doesn't like to tell people what it's doing. So if they say "We're not doing X", it might mean they're not doing it. Or, it might mean that they are doing it, and don't want anybody to know yet.

With the iPod Video, they ixnayed it in public up to a few weeks before they released it.

In the case of the App Store, it seems pretty obvious that Apple intended to let developers write apps for it, but the APIs weren't stable enough to have 3rd party developer depend on them. So they stalled for a year, depending on superior hardware to keep momentum going until the OS settled down some.

You're right.

I see that differently. Designer Steve didn't want to make things that didn't work nicely, and salesman Steve always sold what he had.

If the original iPhone had supported apps, it probably would have run them a bit better than most most other phones of the time, but it still would have run them badly.

[IIRC, there also was the issue that time to market meant there was no SDK at the time; it wasn't even clear how apps would be kept separate from the OS. Even if there were a clear idea about it, I somewhat doubt Steve would have allowed apps on version 1. The risk of apps interfering with the user experience on that hardware was just too great]

Whatever the reason(s), there was no support for apps at release. So, salesman Steve sold the idea that users wouldn't want apps, just like he sold the idea that users wouldn't want to look video on their iPod. And both were, when he said it, not untrue for the average consumer (that video would have been a low-contrast postage stamp that you would have to transfer to your iPod at home. Sure, some people would do that, but it wasn't ready for the masses yet). Nowadays, he would probably say nobody wants Google Glass, too.

Are you sure about that? Sounds like something Apple would say about a product they don't offer, right up until they offer it. Just like they mocked non-iPad sized tablets until they released the iPad Air.

It doesn't mean Apple or Jobs believed any of it, just that they'd say anything to pretend competitors were clueless. It seems very un-Apple to say "yes, X feature is a good idea, our competitors have it but we weren't able to deliver it for this product cycle".

My first iPhone was a 3GS. I don't remember its predecessors as being especially compelling. In fact, I bought a Treo likely after the original iPhone was available. It's also worth noting that the iPod, for all its seeming inevitability in retrospect, was just another MP3 player until about the 4th generation. In general, the ecosystem aspect of Apple was underappreciated by most because the concept just didn't exist in mobile (or, for that matter, consumer) devices at the time.

Also when he wrote "it is too early to start dumping your Nokia shares." they were about $20 so losses to date ~62%. Still investing would be easy if you could travel back in time.

What he didn't foresee then was the app store (it hadn't been invented yet). That is really what changed everything.

An an original iPhone user (before the App Store launched), I strongly disagree. The original iPhone was awesome on its own and changed my life more than having additional apps have. Having a large high quality responsive touch screen interface with excellent UI/UX of a real web browser, email, calendar, maps, etc. was a huge thing.

I also strongly suspect that many app store apps could be replicated as web apps given no alternative, and that mobile web progress (both browsers and frameworks) would have also moved much faster and be in a significantly more mature state had not most of the focus shifted toward native apps.

If Apple hadn't launched the app store, it's quite possible we'd not even miss it and happily discuss whether apple's iPhone (sans app store) is better or worse than the other now touch-based phones (also without an app store).

Indeed, the iPhone damn impressive & shiny but a bit rough to justify. I remember thinking "If they'd just let people write apps for it, this thing could be absolutely amazing..." but even then, it it was apparent iPhone wasn't just a phone. When Apple announced the App Store, I dumped my Verizon contract shortly after and picked up an iPhone 3G.

Often, I'd be willing to bet that the naysayers never used first hand an iPhone. I don't think I've ever been more awed by a single piece of technology. Not even my first laptop, a G3 500 MHz PowerBook in 1999 that had an AGP ATI Rage 128 Mobility, Firewire and a DVD Drive left me that blown away. Everything about the iPhone 3G was amazing, with most intuitive user interface for something so foreign. It immediately changed the way viewed information, my friends would joke "Ask the godpod!"

It was one of those things that despite the absolutely absurd amount of press coverage and hype, was justified and even then it might have been short.

Well, the iTunes store came online in 2003. Not much of a stretch to foresee a marketplace for apps much like the marketplace for music. Whether it would be successful or not is another thing.

I disagree; apps were never a guarantee. Steve was adamant about not having 3rd party apps on the iPhone for a long time. However, with 20/20 hindsight it's easy to see.

Steve was also adamant about not doing a phone in the first place, not doing a tablet, etc. The point being that Steve always publicly denied wanting to do something that privately he was already investing significant resources in doing.

From what I've read it's much simpler than that. Steve would argue passionately for both sides of an issue before reaching a conclusion.

Despite Steve, there was already apps on the iPhone 1.

If you had said "App" in 2007, nobody would have even known what you were talking about.

http://www.google.com/trends/explore#q=apps%2C%20mobile%20ap...

There were already app stores for Symbian, J2ME, PocketPC and Psion devices.

They just weren't as integrated as iTunes.

Linux had centralized package management for like a decade before the iPhone. The App Store was hardly novel, just gorgeous and very successful. But I still use apt-get daily…

You're comparing a command-line package manager for free software with a GUI/touchscreen store for paid software. They're only barely related.

Thats nice, but apt-get is still brittle, breaks often and doesn't support a payment system.

This is one of the fascinating things I think folks born in the 90's are really going to regret. So much of what they say and opine about has become embalmed in the amber that is the Internet that as time passes and looking back reveals how little they knew in spite of their ardor to the contrary is going to start haunting them and become a modern albatross[1]. When I think about the some of the really silly things I believed when I was in college to be absolute truths, only to find in the passage of time they were simply projections of my dreams and fears on to the events of my day. It seems to me there is a particularly vulnerable group there in the middle somewhere, too early to recognize what things like Google would do to data retention, but late enough that their thoughts and views made it into those archives. Ouch.

According to his LinkedIn page[2] Matthew Lynn has continued to be fairly successful as a strategist so perhaps for him it is a non-issue.

[1] http://en.wikipedia.org/wiki/Albatross_(metaphor)

[2] http://www.linkedin.com/profile/view?id=3770629&authType=NAM...

Great Quote: "Don't let that fool you into thinking that it matters. The big competitors in the mobile-phone industry such as Nokia Oyj and Motorola Inc. won't be whispering nervously into their clamshells over a new threat to their business."

Nokia and Motorola and clamshells ... :)

As much as people like to bash everyone who said in 2007 that the iPhone was nothing more than an expensive toy has to remember that the iPhone didn't have an application store (other than the jailbreak version) until July 2008.

And without the app store it was a great pice of engineering but if you didn't saw a jailbreaked version it was a big phone (for the time) where you can play music, watch videos and go to a completely non mobile friendly web with a crappy browser. Add to that how expensive it was compared to other phones how low the battery lasted and how fragile it was you can see why not everyone was that impressed.

It's too easy to say 7 years later, look at this fool he was wrong.

I remember this time. I, like many others, hated the iPhone. The app store was young. There was no basic functionalities like copy & paste. There was no multi-tasking between apps. You only had the option of one carrier (AT&T). The list goes on. I stuck with the Blackberry. Then, Apple executed. It delivered on hardware, and the app store blew up.

I never understood you guys.

Blackberry had no apps so interoperability and copy and paste barely had any use cases.

The other smart phones of the day were Windows powered bricks like the i-Mate line which were so dog slow,and hideously unreliable that frankly I might as well not have had a phone for the two years I used a K-Jam.

iPhone came on the scene and it was like for the first time it made sense to lug around a larger device.

Best iPod ever on that thing. Big screen for videos, real browser and everything it did do worked. Not like the Windows phones which had tech spec as long as your arm but crashed if you tried to perform a most if the functions.

Seriously, I remember having to remove the battery to reboot my device after simply trying to connect via Bluetooth to a samsung flip phone. I didn't care if the iPhone couldn't do that because I knew that the others couldn't even if they said they could.

Caveat: I'm from South Africa and we never got the Palm phones this side.

I was a big iPhone hater at the time. Still kind of am.

1. It was really, really expensive when it first came out - there was a several hundred dollar price drop before it really took off, IIRC.

2. I had a windows mobile (HTC TyTN II) which was actually sweet.

2a. The slideout keyboard was way more accurate than the software keyboard on the iPhone, and Apple hadn't entirely figured out autocomplete (I think their keyboard is still poor compared to swipe etc, tbh).

2b. It was durable - it never died after being thrown off stairs, slammed on the ground, crushed in backpacks, stepped on, getting dropped in a river, etc etc. Towards the end of its lifepan, when I wanted to get an Android phone, I found that I couldn't easily kill it even if I tried. On the other hand, my friend shattered their iPhone by bumping their pocket into the corner of a table.

2c. 3g, and ATT only. 2g is basically unusable for browsing the desktop web, and ATT sucks.

2d. Anybody could, and many people did, publish whatever apps you wanted. I was able to download a full offline database of German public transit schedules and navigate flawlessly in cities I had never been to (which was a big deal), SSH into servers in emergencies (using the aforementioned full-size keyboard), full offline GPS of the continental US (something that's difficult to come by even today!) and so on and so on. The iPhone on launch was basically an expensive consumer toy, had no allowances for third-party developers, and Steve was telling everyone that they were better off without them.

In an expansion of my last point, myself (and a lot of other people) didn't so much think that the iPhone was going to fail as dread its success. The iPhone, and really Apple, represent and drive the trend of consumerization and broader locking down of computing.

And I think that we were right to do so - the broader population largely thinks of their handheld general-purpose computers as texting and passive content consumption devices, because that's all they're allowed to be. And that's sad.

I remember the original introduction and a few things stuck out to me: visual voicemail, downloadable OS updates, the look and feel of the phone versus the other options at the time.

That's all it took for me. I was willing to be stuck with 2G, AT&T (still am), no physical keyboard, etc. for just a few awesome features that seemed life-changing to me.

Multi-tasking is still not really working like real multi-tasking works usually.

I worked (contracted) in the Nokia world at this time. The big game changer the iPhone bought and I think was missed by Nokia and others was the inclusive and easy to use data. In the uk data on phones was very expensive and in some cases you had to configure the apn yourself. iPhone changed all that virtually overnight

>The mobile-phone industry is becoming a cozy cartel between the network operators and a limited range of manufacturers. It could certainly use a fresh blast of competition from an industry outsider.

HA! Yeah that really worked out eh?

It certainly did but only for Apple. Everyone else doesn't have the market position to make the same demands on carriers.

Has worked out extraordinarily well for Samsung. They're making $30 billion a year in profit now, a drastic increase from five years ago. They have as much clout as Apple does these days, if not more given their position in manufacturing components.

With hindsight it's almost funny how the author has managed to write this nonsense with such self-assured tone, but at the time this view was quite prevalent. Working at the time for Symbian, I remember meetings where Apple were openly mocked by senior managers and technical leaders. The only competition that mattered was from Microsoft and Android. The iPhone it was believed, would never be sold beyond the niche high-end market. The most silly, almost insincere, part of these beliefs was the fact that one could walk down the street from our offices and pick up an iPhone at a price fractionally higher than an average Symbian phone (with a contract of course). There were many other reasons for the demise of Symbian as a platform (the leadership was naïve, but had the most inflated egos in the whole of industry due to their earlier success in 'scoring' Nokia), but the bottom line was that they had no idea what consumers wanted. Boring old men still nostalgically carrying their Psion 5s, whom I respected then and respect now for their technical expertise, but not for their business or even technological vision.

A small minority that I was part of tried quite hard to convince our peers that Apple were a serious threat. Everyone laughed at us, we were called Apple fanboys and were never taken seriously. I left soon after in a state of disillusion, but had to watch from the sidelines one of the most promising British 'startups' disintegrate into absolute irrelevance. The managers who ran this company into ground when it was the only one in leadership of that industry should hang their heads in shame. Nothing to take away from great designers at Apple and from the leadership of Steve Jobs, Apple owe a lot to the incompetence of Symbian leadership.

It's easy for us to judge now. But if you read this article when it came out, you wouldn't be so sure. This is the reason why not many analysts publish reports that are contrary to "common" opinion. Because if everyone is wrong, then it's fine, but if it's just that analyst - that's not good for them. We should appreciate that this analyst tried to have a critical point of view.

I read similar articles when the Z10 by Blackberry was being release a year or so ago. You had opinions of flops/world domination swinging both ways.

Wow - how could they be so wrong. I especially like the incumbents: Nokia and Motorala ... where are they now?

Motorola just finished launching their what appears to be fairly successful Motorola X and G lines under the Google name (after being purchased by Google) and is being sold to Lenovo.

Motorola is making the best phone I've used to date.

Nokia is making amazing camera phones with Microsoft.

In my world it's "where is apple now?" None of my coworkers were super pumped about the new iPhone. Before they left the company they were pumped about iOS 7 but just barely ("thank god they got rid of skeumorphism").

To me, despite how wrong this article was, the headline itself looks like it'll be coming true. Apple has been playing defense these last two or three years. Immense props for their initial creation, but the movement it spawned will end up much more wildly successful than Apple will. And the iPhone will fail in a late, defensive move.

I haven't seen the new moto phone anywhere myself or heard it make any news other than Verge type site reviews, so what does "fairly" successful mean?

Nokia isn't making anything amazing these days, i suppose they are making the phone with the highest megapixels and phoney ads pretending it was shot on the phone.

> Nokia isn't making anything amazing these days

Uh, what? I ditched my Nokia a while ago (I hated the ecosystem) but the Nokia Windows phones are undeniably rock solid hardware.

I'm not saying the Nokia Windows phones are good or bad, but they aren't amazing and rocking the market right now. But your comment brings up another point, it's not just about the hardware these days like it used to be for phones, software is just as important.

Exactly! When I saw the headline, that is what I thought it would be about: how apple has been playing defense and is destroying itself. They have been innovation free since the iphone 4 and it shows. Unfortunately, they made the wrong call on screen size and it's taken them 4 years to catch up. They also really need to drop this one-model-per-year schedule. Competition is too strong now. They need to release their BS "s" models midyear.

> And the iPhone will fail in a late, defensive move.

Any day now, any day...

Didn't Google just sell Motorola for $3B after acquiring it for $12B?

It's not a "they", it's a "he". This is one dude's perspective who obviously lacked some vision. Most people who played with the iPhone when it came out knew it was going to be huge. It was just so much better than anything on the market. My guess is the writer had a bit of an anti-Apple bias based on the tone of his early paragraphs.

This is not a blog post, there was far more than one person behind this article. Which is why ignoring the browser and only saying "as well as having wireless Internet access for e-mail" vs "as well as having wireless Internet access for e-mail and web browsing" was a huge mistake.

About the January 9th demo: It worked fine if you sent an e-mail and then surfed the Web. http://gizmodo.com/the-iphones-first-demo-was-buggy-as-hell-... Note gizmodo is talking about the actual devices the demo worked fine but at the time it was far from being ready to be released.

You took the words right out of my fingers!

It just goes to show how accurate and prescient many "news" organizations really are.

Not to mention those IT Research firms like Forrester and Gartner that put their finger to the wind and try to guess which way the wind will blow, then announce it the trade magazines.

I actually worked at Bloomberg when this article came out (in product). While he was writing this in the news organisation, we were busy providing one of the launch apps for the iPhone under strict confidentiality. Also, 5 of my colleagues queued up for hours to buy them on the first day ... one actually bought two - one to keep as a collectors' item.

This is an opinion piece by one writer.

You may have a valid point, but this article doesn't support your claim whatsoever.

It wasn't just one writer or person in the industry saying this at the time. I'm not sure why this article got posted here today, but I think it's likely to make us reflect at how terrible some of these analysts and firms are even today.

Actually, I shouldn't blame the guy too much, except from the fact that he is getting paid to state opinions at Bloomberg, so he should be way more careful in the future.

I was sure the iPhone would be disruptive and the 6 month-early presentation (if I recall correctly) was enough to show an interface that was like 30 years ahead of Symbian.

That said, I was plain wrong on the iPad... It was way more disruptive than I initially thought. But to me, creating content is important, that's why a tablet would always lack something for me. But others apparently appreciate the intuitive interface and ease of use in every day life.

Except Symbian had a touch screen UI in the form of Nokia 7710 a few years before the iPhone, but Nokia killed it shortly after releasing it.

Nokia wasn't the first. There were Symbian touchscreen phones with a full-size display as early as 2000:

http://www.gsmarena.com/ericsson_r380-195.php

The Sony Ericsson P800 is probably the best-remembered in this category. (I think I read somewhere that Steve Jobs once mentioned the P800 as an inspiration for the iPhone -- basically he told his staff: "Let's do this kind of device, but better.")

Anyway, the Symbian touchscreen devices were more like Pocket PCs than iPhones. They didn't really manage to break out of the desktop UI mold.

Apple was the first with capacitive multitouch. They also invented the modern mobile web browsing experience, where the window size is separated from the viewport and you can zoom/pan around with realtime feedback. This seems obvious now, but think back to what it was like to use the mobile web in 2006...

Yep, I forgot about Sony devices.

I used the mobile web since the early GPRS days. Remember WML?

Although they lacked capacitive multitouch, Symbian devices before 2006 already had zoom capabilities.

My N70 could already zoom in for content, if I remember correctly.

Sure but I don't think having a touchscreen compares with the iPhone experience, at all.

As one of the people who fiercely defended Nokia on Hacker News when the iPhone launched, I'm entirely willing to say I was wrong here. I drastically underestimated how quickly Android powered smartphones would become cheap enough to eat into Nokia's marketshare and profits, and I totally overestimated Nokia's leadership's ability to pivot and deal with the situation.

I'm in the same boat. I believed that Nokia's market power would let them react quicker and outgun everyone else on price when necessary. I thought that Apple would treat the iPhone like the Mac, relegating it to a profitable high-end niche with 3-5% marketshare.

Nokia was killed by their incompetence in software. Symbian was originally a lightweight OS designed for constrained devices... But somewhere along the way it got turned into a "worst of all worlds" operating system with enormous code bloat, useless desktop-style features and several half-hearted touch UI layers all rolled into one big ball of fail.

It seemed like nobody at Nokia noticed this. I guess the middle managers were either afraid to pass the bad news up the chain, or more likely, they were totally clueless about the ongoing code gangrene.

Failed predictions are very humorous to read in hindsight. This one is up there with:

No wireless. Less space than a nomad. Lame.

"The mobile-phone industry is becoming a cozy cartel between the network operators and a limited range of manufacturers. It could certainly use a fresh blast of competition from an industry outsider." This statement is still true unforunately despite what ever else the article says

He almost says the reason why it will be a hit (the-best-of-all-world!)

"Instead of lugging around a phone for making calls, an MP3 player for listening to music, and a Blackberry for checking your e-mail, you can do all three on one device. Even better, you only need one charger."

But failed to understand it!

Of course no one saw it coming. Especially the media.

But "Will Fail"? Please. That stands as a terrible headline, no matter what.

I like the byline:

(Matthew Lynn is a Bloomberg News columnist. The opinions expressed are his own.) How he wished this was different ...

Another example that shows that humans are not very good at predicting the future.

Thanks for sharing. This is an awesome read!

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