Apple has urge to converge

Apple is taking a sharp turn toward services, mobile and consumer electronics

Steve Jobs delivered this year's Macworld Expo keynote to an over-capacity crowd. He boasted that the Mac's PowerPC-to-Intel transition had been completed in seven months, grinned about having sold half of new Macs to newcomers to the platform, and then he said "let's move on."

Brother, has Apple moved on. The company has dropped "computer" from its corporate name and is taking a sharp turn toward services, mobile and consumer electronics -- a dream Jobs has been coddling for two and a half years, he said.

As the packed exhibit floor at MacWorld indicated, the Mac is very much in ascension. But for Jobs, who thrives on the new as much as Apple observers do, Mac is, for now, a fait accompli. Now it's convergence time.

The first of Apple's two market-shaking new products is Apple TV, the first credible entry into TV over broadband. Apple TV is a set-top receiver, digital content store and wireless LAN broadcaster for Apple's iTunes.

The tiny box is neither a Mac nor a digital video recorder. The USB port is reserved for "service and diagnostics," not human interface devices, and all of Apple TV's audio and video ports are outputs. Apple TV syncs content only from Macs and PCs within Ethernet or wireless (802.11 a/b/g/n) shouting distance that are running iTunes desktop software, and it can also reach out directly to Apple's iTunes service with a touch of its gumstick remote. In other words, Apple TV turns every PC and Mac in your home or office into a tunable wireless digital television, but every channel has iTunes on.

Apple's new iPhone is the penultimate converged mobile device, bringing together a mobile phone, a widescreen iPod and an Internet communicator in a sub-12mm thin handheld that places iPhone users at three times the normal risk of plowing into oncoming traffic. iPhone has no physical keyboard; one pops up on-screen when you need it. Likewise, there is no scroll wheel, escape button, call start/end button or any tactile buttons at all except one that returns you to the application launch menu.

Inside its classy black polycarbonate chassis, iPhone has absolutely everything but a hard drive. It has a speaker, a microphone, a headphone jack, 4 or 8 GB of flash memory, a 2 mega pixel camera, Wi-Fi and Bluetooth wireless LAN, GSM/GPRS/EDGE mobile phone and data transceiver, an accelerometer that senses portrait/landscape orientation, and a proximity sensor that answers a call when you bring iPhone to your ear, and it's all managed by an embedded OS X operating system. Fantasize about what a company with unlimited time, money and imagination could do with all of that and you've got the iPhone.

Jobs' explicit mention of iPhone's OS X roots suggests that iPhone will be open to developers. If that's so, then developers salivating over the prospect of a UNIX mobile device will account for a great many sales, and their apps will bring no small number of users to iPhone and Mac clients.

As for iPhone's target market beyond the super-savvy, Steve offered a one-sentence positioning statement: "iPhone is like a Blackberry without Exchange." He wants 1 percent of the mobile market in 2007. That's a tall order for a US$500-$600 handset, especially given that the top-end mobile market is fairly well consolidated. But judging from the collective groan sent up by the Macworld Expo keynote crowd, Apple can count on at least 4,000 customers when iPhone ships in June.

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