The iPhone Is Cool--But Is It An Ecosystem?

Posted by: Bruce Nussbaum on January 10, 2007

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.

Reader Comments

Steve Portigal

January 10, 2007 3:25 PM

Another simple, direct, and excellent point. It's provocative thought exercise, too. What will the first hot seller on iPhoneLounge.com be?

I'm headed to MacWorld on Friday (my first time) to see a client's product launch - it's an accessory for a video iPod. And I can expect to see thousands of such products there, so just for fun, I'll try to imagine the booths and products in a year or two and what they could or should be.

Meanwhile I'm sure some zany entrepreneur designers are already getting tooling costs on their new accessories :)

John Zapolski

January 11, 2007 10:55 AM

I think Jobs is thinking about disintermediating the cell phone carriers entirely and aiming at a VoIP wi-fi phone. Carriers have too much power in dictating and delivering the user experience, and Jobs won't and never has stood for that.

Until we have ubiquitous wi-fi in another year or two, he needs cellular service to make the phone viable. Cingular got the pick. But once wi-fi everywhere ("everyware") is here, Jobs can build on Apple's iChat AV software (if he doesn't want a Skype partnership) to have all the calls route over the internet rather than clunky cellular networks.

I for one can't wait to get rid of the cell carriers and their cumbersome contracts and awful customer service.

Steve Portigal

January 11, 2007 4:12 PM

I'm with John, partly, at least, in that one of the takeaways is just how broken the current carrier situation is. We all knew that, but Jobs has made it impossible to deny.

Maybe all the user-unfriendly companies could be bought by the (relatively speaking) user-centered monsters. Google buys Verizon. Yahoo buys Comcast.

At the same time, I wonder if it's a case of "meet the new boss, same as the old boss" - is it possible at this stage in the game to reinvent those organizations to be less corrupt, broken, frustrating, and dissatisfying?

Bala Iyer

January 15, 2007 2:27 PM

An interesting question to ask is-- does great user experience only come from a unified ecosystem? A key aspect of Apple's ecosystem is their control of what ultimately goes on the product and impacts user experience. In fact, Cingular has made some changes to its infrastructure to accommodate features that Apple wanted to include as part of its voice mail service. Unlike this, in the PC ecosystem, complementors use standards to interface their stand-alone components with core products and no one player "approves" what gets on the product.

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Want to stop talking about innovation and learn how to make it work for you? Bruce Nussbaum takes you deep into the latest thinking about innovation and design with daily scoops, provocative perspectives and case studies. Nussbaum is at the center of a global conversation on the growing discipline of innovation and the deepening field of design thinking. Read him to discover what social networking works—and what doesn’t. Discover where service innovation is going and how experience design is shaping up. Learn which schools are graduating the most creative talent and which consulting firms are the hottest. And get his take on what the smartest companies are doing in the U.S., Asia and Europe, far ahead of the pack.

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