Converging on Microsoft

Mitchell Ashley

Previous Article Next Article

iPhone 2.0 Upgrade Will Backfire On Apple

By Mitchell Ashley on Thu, 06/12/08 - 4:22am.

Keep the iPhone you already have - here's why. I had an interesting "iPhone 3G debate" over drinks this evening with a passionate, but less than thrilled, iPhone user. I'll call him "Don". Don, like every other iPhone owner, was debating whether to upgrade to the new iPhone 3G or stick with the iPhone he already had. Don's verdict? Keep the current iPhone. The reason? Freedom of choice of cell phone carriers, and iPhone 2.0 software works fine on his existing iPhone.

What you say? Freedom of choice for which carrier to use with the iPhone? Yes. Don balked at the high cost of AT&T's broadband data plan (for the EDGE network) and had opted to unlock his iPhone and use a cheaper (and slower) data plan from T-Mobile. Don purchased his iPhone over the Web and immediately unlocked it and got service with T-Mobile rather than the more expensive AT&T service.

So, why not get the iPhone 3G and do the same thing? AT&T requires that you purchase a two-year plan from it at the same time you buy an iPhone 3G. Only someone rich enough to throw away a few thousand dollars would get the iPhone 3G and a two-year AT&T plan, unlock it, and then pay another carrier again for what they already paid for at AT&T. That's the behavior AT&T and Apple are of course discouraging. AT&T wireless seems to be taking a page right out of Apple's lock-in strategy. Too bad, because at least in this one case (and likely many, many others), existing customers are faced with signing up for another two-year stint with AT&T. Not providing a choice of carriers will continue to torque wanna be iPhone users. But wait, there's more.

Apple's limited hardware improvements and the 2.0 iPhone software upgrade may both be strong deterrents and cause users to stick with their current iPhones. Why?

To begin with, the iPhone 3G only brings three significant hardware benefits: 1) 3G capabilities (faster data downloads, more international networks), 2) built-in GPS, and 3) increased storage capacity. The first two are very valid reasons to go out and get a new iPhone 3G, provided you need those capabilities. The third, more storage, isn't as big an issue yet, at least until downloadable iPhone apps become available and start to gobble up storage capacity. Barring a need for any one or a combination of these three hardware upgrades, there's no significant hardware benefits to the new iPhone 3G. The original iPhone's more than adequate for doing basic e-mail and Web page downloads, and running soon to be released iPhone apps through the App Store.

That, along with being able to upgrade to the iPhone 2.0 software, users get the much needed Exchange integration, improvements to Contacts search, Office and iWorks document viewing, remote wipe and other new 2.0 software benefits. So unless you really need one of those hardware benefits, most iPhone users will be just as happy to stay with what they've got. Apple's goal of 10 million iPhones sold this year could be in serious jeopardy unless price reductions, 3G and more storage drive are enough to drive large numbers of iPhone sales.

So unless you get your jollies over giving Apple more of your hard earned money, you might just be better off sticking with your current iPhone.

Related blog posts:

Like this? Here are some of Mitchell's recent posts.
iPhone 3G Overshadows MobileMe SaaS
Gates; Ruthless, Dominance and Respect
iPhone 3G Plays Catch Up
Blueprints for Microsoft Software-plus-Services
Microsoft - Open Source Community Is Watching
Blackberry's a Ferrari, iPhone's a DeLorean

Product Reviews:
Microsoft Live Mesh Google App Engine LiveNewsCameras.com Xobni Outlook plugin

Rock Star jobs in SaaS: SaaS Jobs

Recent Converging Network Blog Posts:
Get Ready For XaaS Everywhere Unbelievably Bad Web Password Security Back From Hiatus, Saved by Web 2.0 Technology It Takes a Village.. ah, actually, being there first and tons of hard work

Favorite Book Recommendations: The Big Switch Zero Day Attack Clear Blogging

Check out Mitchell's Converging On Microsoft Podcast. Current Podcast Episode: Security Mike Gets Serious About Security

Also visit Mitchell's personal blog The Converging Network and SSAATY Security Podcast.

Visit Microsoft Subnet for more news, blogs, opinion from around the Web.

Sign up for the bi-weekly Microsoft newsletter. (Click on News/Microsoft News Alert.)