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Dvorak: Apple should abandon iPhone

updated 10:40 am EDT, Thu March 29, 2007

Dvorak: abandon the iPhone

Technology columnist John C. Dvorak believes Apple should pull the plug on the iPhone before it's too late. "What Apple risks here is its reputation as a hot company that can do no wrong," Dvorak writes. "If it's smart it will call the iPhone a 'reference design' and pass it to some suckers to build with someone else's marketing budget. Then it can wash its hands of any marketplace failures," he suggests. "It should do that immediately before it's too late. Samsung Electronics might be a candidate. Otherwise I'd advise you to cover your eyes. You're not going to like what you'll see." The columnist compares the mature cellular handset market to the segmented and unfocused MP3 player business prior to Apple's entry in 2001, noting that Apple played a very different game back then with a fresh new playing field.

"This is not an emerging business. In fact it's gone so far that it's in the process of consolidation with probably two players dominating everything, Nokia and Motorola."

Such a late phase in the market offers extremely thin margins, which force smaller competitors and newcomers to lose lots of money.

"There is no likelihood that Apple can be successful in a business this competitive," Dvorak writes. "Even in the business where it is a clear pioneer, the personal computer, it had to compete with Microsoft and can only sustain a 5 percent market share."

The advertising and pricey marketing required of companies in the handset business is nothing like what Apple has experienced, according to the columnist: "It's a buzz saw waiting to chop up newbies."

"The problem here is that while Apple can play the fashion game as well as any company, there is no evidence that it can play it fast enough. These phones go in and out of style so fast that unless Apple has half a dozen variants in the pipeline, its phone, even if immediately successful, will be passť within 3 months."

Apple survives in the computer business due to high margins, but those margins cannot exist in the mobile phone business for "more than 15 minutes," according to Dvorak.




by MacNN Staff

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Comments

  1. sixcolors

    Joined: Dec 1969

    0

    tool

    this guy has no clue what he is talking about

  1. Smurfman

    Joined: Dec 1969

    0

    Don't click his link!!!

    He's just trying to get hits! Don't go to his original article.

    If he were actually serious, he should get checked into the psych ward for all the crazy stories he writes.

    Dvorak is more of a fiction/fantacy writer than tech journalist.

    What a goob.

  1. garmonbosia

    Joined: Dec 1969

    0

    I thought...

    that everyone was just being overly critical of this guy, but my Gods, he's George Bush stupid!

  1. nativeNYer

    Joined: Dec 1969

    0

    hits are low

    I guess Dvor-jerk's site has low hits this month, so he writes something he obviously pulled out of his @ss to get hits. What a complete moron this guy is.

  1. tsmelker

    Joined: Dec 1969

    0

    Oh, great...

    So a man who has consistently never been right about anything concerning Apple is advising Apple to abandon the iPhone. Who's surprised here? Did the folks at PC magazine forget Dvorak's rant about Apple's supposed plan to abandon the Mac OS and put MS WinBlows on their Intel Macs instead? How often does Steve Jobs take what Dvorak says to heart? I'm guessing none. How this guy is still employed by any serious computer publication is beyond me- maybe he should go work for The Star.

    Q: How can you tell that John Dvorak is about to make a fool of himself again? A: When his mouth is moving.

  1. pysan

    Joined: Dec 1969

    0

    Crazy dribble...

    The part Dvorak is missing is his entire take on Apple's strategy. If Apple were into fighting w/ price and features like everyone else, then sure, they would be up against a big fight against the likes of Nokia and Motorola. However, Apple may only have 5%, but that is a profiitable 5% in the computer market. The same as Steve has compared in the past to BMW. Consumers are much less price-sensitive at the higher end where Apple plays.

    So not only can they be profitable in the higher end phone space, but that is not all. Unlike any manufacturer before it, Apple is in the business of shifting the phone paradigm to where it is in control of the whole experience.

    I mean, how well would landlines and internet have worked had everything you could do w/ the internet had been provided by your ISP, not very well. Verizon/Spring/Cingular/T-Mobile have controlled everything as the wireless networks. But I think Apple is in the midst of resigning the wireless carriers into the wireless ISPs and phone companies they should be, where they provide the bandwidth, and the consumer is left to do whatever they want, and download songs/ringtones/msging from where ever they want.

    So far Moto/Nokia have been willing to play the wireless carriers game, but Apple is not willing to go that route. So while they are entering a crowded market, they are changing the market, thus making them a pioneer again, and where the stalwarts are at risk of being left behind in their own market.

    To say nothing of Apple needing to get in and defend their iPod position against the encroachment of music playing phones, which must be done, if only to give an alternative w/in the Apple camp.

    ------------------------ www.itfinanceguy.com

  1. fsauer1

    Joined: Dec 1969

    0

    You've Got To Be Kidding!

    John is a columnist writing on technology, yet doesn't seem to get it that it is the creative invention/use of technology that allows innovative business success. Every success, Apple or otherwise, risks the company's reputation. If it didn't, then it wasn't that creative. Look at Xerox, who wouldn't risk its reputation on its PARC creations (I know, I was there and somewhat involved) I don't know if the iPhone will be a success, but just reading news articles, it has already changed the industry's thinking about the importance of and the thinking about what it has to do toward easing the user's experience with cell phones. That is a success in and of itself.

    Besides, I keep looking at the iPhone and keep thnking: just a few changes and Apple has an Einstein ( my name for the successor to the Newton)

  1. burger

    Joined: Dec 1969

    0

    This just in

    ..Dvorak is new CEO of Apple! Click my link to read the full story. No link, just making a shock journalist attempt.

  1. cmoney

    Joined: Dec 1969

    0

    1 good point

    His point that the phone may be successful initially but out of fashion after 3 months is somewhat valid. Fashion phones typically are hot for about that time period. BUT he forgets to mention price in relation to fashion/hotness.

    Witness the razr, lg chocolate, etc. They were initially hot fashion phones and commanded a high price. Once the buzz died down, the price started dropping and the masses kept buying more. The razr was on the market for how many years before it was even revised?

    I think Apple priced the iphone at a good point. It allows for some exclusivity at the outset and once the buzz dies down (if it ever does) it gives some leeway for price drops to keep demand up.

    One thing to worry about though is that Apple doesn't drop pricepoints. They increase functionality but keep the same price.

  1. migs647

    Joined: Dec 1969

    0

    Dvorak never stops...

    This guy is FAMOUS for trolling in Mac users. All he wants is hits on his website. It's what keeps him going as a journalist. He says something totally abrasive to mac users and somehow they are all forced to click his link. Don't be fooled. He hardly ever reveals what he's really thinking. I'm certain he writes the opposite of what he truly feels.

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