Tuesday, June 19, 2007

Why the iPhone Will Fail / Why the iPhone Will Be a Big Success

Why the iPhone Will Fail
Convergence Devices Have a Frequent History of Failure
By Al Ries


In the gold rush of 1849, prospectors checked their finds with Aqua Regia, a mixture of hydrochloric and nitric acids.
The iPhone may be another convergence device destined for failure.

If a sample passed the acid test, it was the real thing.

When Apple introduces its iPhone this month, will it pass the acid test?

In my opinion, no.

Prediction No. 1: The iPhone will be a major disappointment.

The hype has been enormous. Apple says its iPhone is "literally five years ahead of any other mobile phone." A stock-market analyst says, "The iPhone has the potential to be even bigger than the iPod."

I think not. An iPod is a divergence device; an iPhone is a convergence device. There's a big difference between the two.

In the high-tech world, divergence devices have been spectacular successes. But convergence devices, for the most part, have been spectacular failures.

The first MP3 players (the Diamond Rio, for example) were flash-memory units capable of holding only 20 or 30 songs. The first iPod, on the other hand, had a hard drive and could hold thousands of songs. Now there were two types of MP3 players, a classic example of divergence at work.

Every high-tech device has followed a similar pattern. The first computer was a mainframe computer, followed by the minicomputer, the desktop computer, the laptop computer, the handheld computer, the server and other specialty computers. The computer didn't converge with another device. It diverged.

When the cellphone was first introduced, it was called a "car phone" because it was too big and heavy to lug around. You might have thought it would eventually converge with the automobile. It did not. Instead it diverged and today we have many types of cellphones.

Every Best Buy and Circuit City is filled with a host of other divergence devices that have been enormously successful: the digital camera, the plasma TV, the wireless e-mail device, the personal video recorder, the GPS navigation device.

What convergence device has been a big success? Not many, although there have been a lot of convergence failures.
The computer/phone. AT&T, Motorola and others introduced combination products. Few were ever purchased.
The computer/TV. Apple, Gateway, Toshiba, Philips and others tried to market combination products with little success.
Interactive TV. Microsoft spent $425 million to buy WebTV and then poured more than half a billion dollars into the venture. That didn't work, so it moved on to Ultimate TV, which didn't work either.
Cellevision. Everybody is talking about the third screen, watching TV on your cellphone, but relatively few people do. (The real action in TV is the booming market for divergence products such as big-screen plasma and LCD sets.)
Media-center PCs. Everybody was going to run everything in their homes from personal computers. It never happened.

Prediction No. 2: The media will blame the execution, not the concept.

Suppose the iPhone is a major disappointment. Will another convergence failure convince the high-tech industry of its folly? Highly unlikely.

Once a concept like convergence grips the imagination, it seldom dies.

A convergence failure is never seen as a "conceptual" failure; it's always seen as an "execution" failure. "The concept was sound; they just didn't do it right."

Hope springs eternal.

~ ~ ~
Al Ries is the author or co-author of 11 books on marketing, including his latest, "The Origin of Brands." He and his daughter Laura run the Atlanta marketing-strategy firm Ries & Ries.

Why the iPhone Will Be a Big Success
Apple's Marketing Touch Creates Passion Beyond Reason
By Jonah Bloom


The reality won't match the hype; it was rushed to market and will be buggier than Florida in September; the battery will have the longevity of a mayfly; the touch-screen keyboard will be more irritating than a mosquito bite. It won't hold enough music; the big glass screen will crack;
The iPhone has a lot of expectations to meet, but it will probably succeed regardless of how well it meets them.

the big glass screen will be smeared with unsightly fingerprints; it'll be incompatible with other software makers' applications; forcing users onto iTunes is too restrictive; at $500 it'll be too expensive; and now, from branding expert and fellow Ad Age columnist Al Ries, it'll fail because convergence devices fail.

There are hundreds of pundits who expect the iPhone to flop, and they've come up with a plethora of perfectly plausible reasons why it will sink like Motorola's Pebl in the overcrowded sea of mobile devices.

It's tempting to add a couple more cautionary notes to the list. For example, Apple usually makes complicated stuff feel simple and approachable (one-button mouse, drag-and-drop files and folders, plug-and-play devices), but in this case it's making what used to be a fairly simple device quite complicated. Even TBWA's TV commercials, while beautifully executed and better than 99% of the dreck between shows, feel a touch educational -- as if Apple feels the need to explain itself with this one -- and lack the memorable, one-message simplicity of "Think Different," "1,000 Songs in Your Pocket" or "Get a Mac."

Worse, the ads are deceptive, because they suggest a speed of mobile web surfing that surely won't be available no matter how good the iPhone is. Based on my own experience with my BlackBerry and Razr, both of which rely on AT&T for service, you'd need to buy a 60-second spot just to show one link opening.

But for all of these criticisms and despite the fact that some will prove valid, the iPhone will be a runaway success -- selling as many units as Apple can ship through 2008 and taking at least a 1% share of the market.

Why? Because it looks great, because it is made by Apple, because its high price point will prove an asset while it's being targeted at affluent influencers, because it'll be a badge of honor, because it epitomizes an increasingly mobile world. Because, in short, it will inspire irrational consumer lust.

Indeed, anyone who ever uttered the word "brand" in anger, or in a new-business pitch, should wish it success. Companies such as Apple, one of the few that can still create passion beyond logic for its products, remind us that marketing is more than computer science. Not that there's anything wrong with computer science. Indeed, it's making the ad game a lot less laughable in the C-suite. But isn't it nice to know the entire business of connecting with the consumer can't be successfully outsourced to the machines just yet?

The fact that Apple's rivals in the mobile space are such a bunch of inept followers will help too. There might be a sea of offerings, but most of them are mediocre for devices people spend their entire lives attached to. Amazingly, aside from the possible exception of the Pearl, with its cute little rollerball, there's been nothing to inspire phone pride since the Razr, which has been decidedly unsexy ever since everyone got one. Then there's the cellphone manufacturers' marketing, or mystifying lack of it. Too much of it still is left to the networks.

Al makes a really interesting case against convergence. As comedian Ricky Gervais recently put it in one of his stand-up routines, we don't need to be able to take a piss in the washing machine because we've already got toilets. Yet, every time I pack my iPod, phone, BlackBerry and laptop into my travel bag, along with all their various chargers, I find myself wishing I had one mobile device. Call me irrational, but I'm willing to believe the iPhone might be the one.

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