THE IPHONE

Knowledge, Innovation and Learning - The iPhone

Knowledge, Innovation and Learning - The iPhone

Introduction

On the 26 June 2007, the share price of Apple fell by 2 per cent on the face of it a fairly trivial event except that it was about to launch (exclusively in the USA) the arguably most-hyped mobile device in history known as the iPhone. The iPhone is a variant of what are generally categorised as smart phones, although your average handset is now so smart compared to even two years ago that the term is becoming outdated. As smart phones go, the iPhone was not unduly expensive at $499 for the entry level model, nor was the scale of monthly service charges which were set between $60 and $100 in conjunction with a two-year contract. But the Apple shareholders were edgy: the value of Apple had risen by $34 billion since the iPhone had been announced to the world and they stood to lose much of their gains if the iPhone proved to be a one-week wonder. This paper will attempt to shed light on iPhone's history, followed by a presentation of a market review and the subsequent presentation of predictions regarding the future of the iPhone.

Discussion & Analysis

The iPhone first surfaced at the MacWorld trade show in January 2007 when Steve Jobs announced that, having previously changed the music industry via the launch of the iPod, Apple now intended to do the same for the mobile communications industry via the iPhone (Edwards 2010). The curious aspect of this was that the device in question was, by the standards of the time, fairly expensive, relatively large, on the heavy side, lacking a keyboard, short on memory and would initially at least be launched over a so-called 2.5G network rather than one capable of 3G speeds the sort of attributes that would leave the reputation of any “normal” handset manufacturer in tatters.

But not that of Apple because it had set out to address the fundamental flaw in existing handset design, namely the inherently user-unfriendly nature of the beast. Anyone working their way through a lengthy series of drop-down menus or trying to type accurately on a tiny keyboard finds the experience frustrating, and may also be unable to access parts of the Internet (Snell 2010). What Apple set out to do was to give the user unrestricted access to the Internet via an operating system (OS) comparable to that found on most desk-top computers as well as to simplify the process of making voice calls, listening to music and managing contact lists. That was achieved by replacing the keyboard with a touch-screen that could immediately replace one set of button functions with another according to whether the user wanted to make a voice call, send an e-mail or whatever.

So why were shareholders edgy? In the first place, with the iPod market reaching maturity, Apple effectively had a large chunk of its future profitability resting on the success of the ...