MACWORLD - Why Apple dropped 'computer'

When its biggest news of the year is a new phone is it any wonder Apple changed its name?
  • Ryan Faas (Computerworld)
  • 12 January, 2007 10:41

Perhaps one of the most telling statements about the newly renamed Apple Inc. that CEO Steve Jobs made during his Tuesday keynote at the MacWorld Expo in San Francisco was that the company will now be referred to as simply as Apple, not as Apple Computer.

Apple has been moving away from being solely a computer maker for several years, and the new moniker was announced at the end of a keynote that -- while it included two major announcements -- had little do to with Apple's Macintosh computers or its Mac OS X operating system. While the new AppleTV device for streaming all manner of digital media from one or more computers to a television was technically Mac-related (as was Apple's announcement of 802.11n wireless connectivity under the name AirPort Extreme in the AppleTV and other products), it truly reflected Apple's identity as a diverse company that focuses on the digital media experience and digital media devices as much as it does on computers.

And it was the iPhone, a product famous long before being actually introduced -- that stole the show.

Rumors of the iPhone have been circulating for more than a year. Tuesday morning, however, all those rumors were put to rest with the unveiling of a device that is part iPod, part smart phone, part Internet appliance -- and much more than just an iPod and mobile phone combined into a single device. There truly is no better word than revolutionary to describe the device, which is slated to ship in June pending FCC approval.

Here's a quick recap of the specs and major details of the iPhone:

  • It's 4.5 in. by 2.4 in. by 0.46 in. and weighs just under five oz., making it the thinnest smart phone on the market.
  • It offers quad-band GSM support.
  • It supports Cingular Wireless's EDGE data network, as well as 802.11b/g wireless connectivity, with the ability to seamlessly switch between the two for Internet access.
  • It supports Bluetooth 2.0.
  • It features a 3.5-inn screen with a resolution of 320 x 480 at 160 pixels per inch and includes a 2-megapixel camera.
  • It reportedly delivers 16 hours of battery life when used for music playback and five hours for other uses.
Those are the basics. The iPhone, due out in June (Australia next year) after it receives approval from the Federal Communications Commission, also has sensors that allow it to automatically rotate the screen between portrait and landscape when the user turns. And it can adjust the backlight to accommodate the brightness of its surroundings and automatically turn off the backlight when it is placed next to a user's ear.

The iPhone also uses a revolutionary interface powered by Mac OS X that relies on Apple's groundbreaking new "multitouch" touch-screen technology. The use of multitouch for all user interface elements, combined with Mac OS X's robust graphics capabilities, gives the iPhone an amazingly intuitive and comfortable interface for all features. In addition, it offers all of the functions of a wide-screen video iPod, runs several widgets familiar to users of Mac OS X's Dashboard, includes full-featured versions of Apple's Safari Web browser and e-mail client -- with support for push IMAP (free from Yahoo) -- and displays Google Maps.

But, as they say in the commercials, wait, there's more. It has the ability to sync contacts and related personal information with a computer, provides automatic recognition of phone numbers in any context for easy dialing, delivers text messaging in an iChat-like interface, and displays visual voice mail that allows users to see their messages and to listen to or respond to them without needing to listen to each message.

The iPhone will be sold exclusively through Cingular for US$499 for a 4GB model and US$599 for an 8GB model. Buying the phone will require signing a Cingular service agreement.

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Probably the most revolutionary thing about the iPhone is its interface (if you haven't see it yet, check out Apple's iPhone site for QuickTime demos. The interface has all the beautifully rendered 3-D interface elements and intuitive ease of navigation that you would expect for a handheld device built on Mac OS X. The entire interface is reminiscent of Mac OS X's Dashboard, from the home location through the widgets. In fact, it will be interesting to see if Apple allows additional widgets, such as the thousands already available for Mac OS X, to be used to extend the already impressive feature set of the iPhone.

Most mobile phones, from those entry level models to the most advanced smart phones, tend to have less-than-intuitive interfaces that require you to press buttons or use a stylus. In comparison, the multitouch interface of the iPhone puts it light years ahead of any other phone on the market. Combined with Safari and the e-mail client, the interface is even more impressive. The same is true for the ease of managing contact, calendar and other personal information between the computer and the iPhone. That's something iPod users have enjoyed for years.

Speaking of the iPod, the iPhone's iPod interface is as close to that of previous iPod generations as it can be without a click-wheel -- but it's even easier. In fact, I wouldn't be surprised if future iPods end up sporting multitouch as their interface. The wide-screen feature is definitely a plus, particularly since more movies are being added to the iTunes store now that Paramount has joined Disney in selling titles through iTunes.

I could go on and on about the iPhone as a device that has leapfrogged the U.S. mobile phone industry, but its ability to revolutionize the market will depend on its ability to attract users. As advanced as the iPhone is, it does face challenges that could curb its ability to gain widespread adoption, particularly in the short term. One concern may be its price; another is Apple's decision to partner solely with Cingular.

It's true that Cingular has the largest GSM and EDGE data network in North America, along with the largest subscriber base. However, the distribution setup means that users of other providers will have to decide whether the iPhone is good enough to make them want to switch companies. That's a decision often based on a variety of factors, including customer service experience, rate plans and coverage options in specific locations. That may be of particular concern in some rural areas where GSM doesn't provide expanded coverage.

Even if users opt to switch to Cingular in order to purchase the iPhone, most will likely wait until their current contracts expire to avoid early termination fees. This may not affect iPhone adoption in the long run, but it will almost certainly have an effect during the first several months. Existing Cingular customers may also wait until their current contracts expire, depending on the final pricing and contract requirements that Apple and Cingular develop.

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The price of the iPhone and its feature set place it outside the realm of the typical music phone and more toward the higher end of the smart phone market. Jobs pointed out in his keynote that the price is about the same as the prices of a BlackBerry and an iPod combined. The big question will be whether a broad section of the market opts for a single device -- and a larger price tag -- or for different devices that can be bought at different times. The limited amount of storage available in an iPhone, which is significantly lower than, say, the 30GB or 80GB available in an iPod, is another issue buyers will likely ponder.

Placing the iPhone beyond the entry-level market for music phones may not be a bad thing. As Jaimee Minney, an analyst at market research firm M:Metrics, puts it: "The decision to design the iPhone with a smart phone orientation was a very wise yet unexpected move that puts Apple squarely against Microsoft and the Nokia N-series. Whereas the expected profusion of music-centric devices would dilute the value of an iPod-like phone, the demand for smart phones is steadily growing, and now Mac enthusiasts can finally get their hands on the seminal Apple mobile device."

Even if the iPhone doesn't secure a dominance in the marketplace, it could still be a big seller for Apple. As independent telecommunications industry analyst Jeff Kagan put it: "There are about 230 million cell phones in the marketplace. Several million iPhones will be great news for Apple, but I don't think at this point it will make a big difference to the industry competitors."

Placing the iPhone in a higher price range also offers another advantage: It separates the iPod and iPhone markets. If Apple had released a more basic iPod and mobile phone device as expected, sales of it likely would have come at the expense of the other iPods. By making the iPhone much more than an iPod/iPhone, Apple is providing a high-end smart phone device while leaving a market for people who would rather spend $199 on an iPod Nano and settle for an entry-level phone for free when signing a service agreement with a provider.

All in all, today's announcements go a long way toward explaining why the company no longer has "computer" in its corporate name. And we haven't even gotten into the ramifications of the release next month of the AppleTV.

Ryan Faas is a freelance writer and IT consultant specializing in Mac and multiplatform network design and troubleshooting. He is the co-author of Essential Mac OS X Panther Server Administration and the author of Troubleshooting, Maintaining, and Repairing Macs. For more information, visit RyanFaas.com.