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iPhone 3.0 an important lure for Apple, says analyst

updated 09:35 am EDT, Wed March 18, 2009

Needham on iPhone 3.0

The upcoming iPhone 3.0 firmware may serve as an essential lure for Apple, argues Needham analyst Charlie Wolf. The firmware will add a number of important software features, of which push notification and copy/paste are said to be the most critical. Such a strategy could be useful not only to Apple but to the entire smartphone industry, Wolf suggests.

Smartphones are currently enjoying double-digit growth rates, but that rate may be unsustainable without offering something to attract users of regular cellphones. In practice, a smartphone is considerably more expensive than an ordinary one, not just because of advanced technology but because of the extra data costs a user is burdened with. Many manufacturers have been attempting to compensate by making increasingly powerful hardware, for example combining features in the likes of RIM's BlackBerry Bold.

Apple's emphasis on software is a "different bet," Wolf suggests, an attempt to mimic the PC strategy of using applications to draw people in. The new iPhone OS -- alongside the over 25,000 titles at the App Store -- may theoretically be a more powerful force than hardware, though it is thought to be too early to tell which approach might win.

by MacNN Staff





  1. kerryb

    Joined: Dec 1969


    I'm the iPhone and I'm a

    I'm the iPhone and I'm a PC. Yes that little portable device which we carry around is the worlds smallest PC with an operating system that doesn't suck. I can't imagine what the competition is thinking after yesterday's preview of Mac OS X 3. We have one advanced gadget here that can't be touch for a long time.

    Comment buried. Show
  1. testudo

    Joined: Dec 1969



    Apple adding Push technology and Copy/Paste is going to transform the industry! Just imagine if other handsets had these features!

    What, you mean they did? Oh, nevermind.

  1. milkmage

    Joined: Dec 1969



    yeah. just think. the inferior feature set of the phone prior to OS3, only took them to the number 3 spot for smarphones. no where to go but up, now witness the power of this fully operational handset.

  1. Constable Odo

    Joined: Dec 1969


    iPhone lacks features

    that other smartphones have is a common cry from WinMo, Nokia, Android-OS users, etc. Feature for feature, the iPhone is still lacking. However, I guess feature usability is important to the average user.

    S. Korean and Japanese users apparently don't care at all for the iPhone feature-set and hardware, so far. So it's not the perfect handset. What is important is that Apple continue to improve the iPhone overall to keep pushing sales. It won't have to be perfect for everyone. If Apple can pull 40 to 50% of the smartphone market, we're still talking big money. Apple is trying to turn the mobile division into a goldmine for developers and content creators with the in-app purchasing model. Apple will have this stuff ready to go in a few months. That will beat hardware for developers any day of the week.

    Apple can easily put advanced hardware into their products, but the software side will not be easily duplicated by competitors because Apple has been building the iTunes Media Store model for years.

    Lack of video recording really comes up weak compared to applications that generate money. I honestly can't believe that RIMOS, Android, Symbian and WinMo have the sort of APIs that Apple is creating due to the type of hardware most of those older phones have been using. In six months, we'll see if hardware or software on the mobile platform wins out.

    I know I'm in the dark since I'm not a developer and have never seen a developer event held by other companies, so maybe I'm wrong. Maybe these are common APIs that every handset company has already built into their own SDKs. It just doesn't seem likely since they're all heavily into hardware features.

  1. Jittery Jimmy

    Joined: Dec 1969


    30 million.

    So 30 million Apple mobile devices have been sold so far to people that clearly don't think that the lack of "copy/paste" and "push notification" is a show stopper.

    So will all the other changes convince the remaining people that the iPhone is worth-while? Likely not.

    The iPhone has other perceived limitations that prevent converts. One is that some people are under contract with another provider. Secondly, corporate users are stuck with whatever their company provides. Some people don't want to spend $30 monthly for a wireless data plan. Some people just love the qualities of their existing device and wouldn't move away from it for anything. Some folks live in an area where there isn't a close by AT&T tower. Other folks buy into the marketing arguments offered by competitors. Some people simply hate Apple.

    I think iPhone 3.0's new APIs will provide new applications that will make the iPhone considerably more compelling, resulting in more converts. But none of the individual features in of themselves are likely to win many converts.

    As Apple suggested (but did not state), future iPhone sales will grow due to the next generation applications - applications that will do more things by using the new APIs. The other "user features" is nice, but not compelling enough to substantially change the mobile landscape.

  1. ff11

    Joined: Dec 1969



    It is true that there are a few common smart phone features not yet implemented by the iPhone (although there will be few such un-addressed features once the 3.0 software is released). On the other hand, there are also approaching 20,000 iPhone features not implemented by the other smart phones.

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