OK, by now most of us have product lust for the new Apple iPhone and many folks will buy it but the real impact of the iPhone will be in its transformative power to create—finally—a unified ecosystem among the cell phone carriers that delivers a great experience to people. Just like MP3 players before the iPod, the cell phone market is fractured among different carriers who thrive on delivering their own bad service. This is why innovation in cell phones has shifted to Asia and Europe. The cell phone experience in Korea and Japan, and much of China, is simply superior to that in the US thanks to the dastardly deeds of the carriers.
The iPhone is perhaps the best shot at changing all that and bringing innovation back to the US. But that will happen only if Steve Jobs can pull off in telephony what he’s pulled off in music. He needs to go beyond just one carrier, Cingular, to bring Verizon and others into a partnership. For example, Cingular doesn’t have its own music service but Verizon and others have big plans to make money from downloading music directly to their cells—only their cell phones. How is Jobs going to persuade them to change their minds? How will he persuade the Asian and European carriers (he’ll need them to meet his goal of getting 1% of the global cell phone market by 2008). Will they use iTunes? Will Apple change iTunes and permit music to be downloaded directly into cell phones? And how will the revenue be apportioned?
The iPhone is a cool product. But it can be revolutionary only if it becomes a cool ecosystem.
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