iPHONE 3.0: 2 MONTHS ON, POST-HYPE

I recently bought my son a new iPhone 3G, a month after they first went on sale, and buying it then was a bit less painful than buying it the first day. The first day was like attending the premier of Batman: The Dark Knight. And as the Dark Knight has made $500M as of this writing, Apple is still selling a lot of iPhones.

So, what is the experience of the iPhone 3G, now 8 weeks later, after the initial thrill of excitement, post-hype, after the reality distortion sphere has dissipated?

Here is the good, the bad, and the ugly

The Good

This launch has been very good for Apple in terms of revenue and market share growth. “iPhone 3G had a stunning opening weekend,” said Steve Jobs, Apple’s chief executive, in a statement.

• iPhone sales statistics:

1M first weekend

3M in the first month

8M iPhones? At this time, Apple had manufactured at least 5,649,000 iPhone 3Gs. Added to the 2.4 million first-generation iPhones the company reported it had sold in the first six months of 2008, that means that Apple has manufactured more than 8 million iPhones this year. In 2007, Apple sold 3.71 million iPhones.

Overall, the experience of buying an iPhone 3G, while in high demand initially, was pleasant and made easier by Apple’s convenient iPhone availability widget.

• AppStore:

There were 60 million downloads in the first 30 days, admittedly mostly for free apps, but with about $30 million in revenue, and a runway of 3 million more new iPhones out there to run them on.

The iPhone is a small part of Apple’s business — only 5% of its overall sales in the latest quarter. Macintosh computers and iPods typically generate 75% of Apple’s revenue. But iPhones are hugely profitable. By some estimates, Apple stands to make between $100 and $400 on each new iPhone sold, depending on the model (8 or 16GB) and wireless carrier.

Although Apple has less than 1 percent of the overall cell phone market, it has 19.2 percent share in U.S. smart phones, which pack more functions. That put it ahead of Palm, which had 13.4 percent, but far behind RIM’s 44.5 percent, according to research firm IDC. And the less than successful launch of Apple’s MobileMe “cloud” offering has made predictions of the demise of RIM’s BlackBerry seem rather premature.

The Bad

• iPhone 2.0 software

While there are many new features in the long awaited 2.0 firmware update, available on the first generation iPhone as well, there seem to be a number of steps backward as well. Some of the iPhone core applications are less stable, with the Mobile Safari crashing regularly when it didn’t do that with the 1.0 software. There are still some persistent and vexing features missing: copy and paste within and across applications or global search — it’s available only in Phone/Contacts.

Additionally, core applications have shown sluggish performance, slow typing, as well as clunky scrolling and Safari rotation. The 2.0.2 version update of software has addressed some problems, but not all.

• 1.0 Apps

While there are many fine 3rd party applications available in the AppStore, they are by definition 1.0 versions. Because there is no Apple-supported universal beta or try-and-by program in the AppStore, these apps don’t have the testing that most usual applications enjoy. Some are quite immature. Many of them are unstable and crash regularly. And when they do, they can lock up the entire iPhone. Steve Jobs said he’s look into it.

• Where are the AppStore “killer apps?”

Applications that one would expect, that are common on other platforms like Palm’s Treo or Windows Mobile phones are still missing in action on the iPhone. Here are the two most obvious:

Office documents: while you can view Microsoft Office and Mac iWork documents, you can neither edit nor create them on the iPhone.

Turn-by-turn navigation: the GPS feature on the iPhone 3G is very nice — though a battery killer — and on the iPhone’s native Google Maps is wonderful to behold. But Google Maps directions are not known for their accuracy. And while it works in a pinch, it is not the same as turn-by-turn navigation. While a number of popular vendors have mentioned intentions or successful porting to the iPhone, there have been no release announcements or available products at this time.

• Suggested Apps

Here are a couple of potential Apps that I know would be immensely popular:

Typing shortcuts: the iPhone keyboard does not allow one to type as fast as on a physical keyboard like the “thumb boards” on the Treo, BlackBerry, or other smartphones. And while it does have an auto-correction feature called “keyboard dictionary”, I’d like to see the availability of an app that does either predictive typing (T9) or “macro” shortcuts — think “.sig” for your signature.

Speed navigation: moving around the iPhones apps mean a trip through the “Home” button before moving to the next app. And drilling through menus even within an application can take a lot of time. Changing email accounts takes 4 “clicks”, toggling BlueTooth or 3G on/off also takes 4, email account modifications take more. Either a gesturing system or an imaginative use of the “hard buttons” would be greatly welcomed.

The Ugly

Here are a couple of things that detracted from the huge media event of 8 weeks ago, both of which persist.

• MobileMe

This long awaited enhancement to the dusty .Mac service got off to a rocky start the first day, lifted off, crashed, was rumored to be fixed, but alas, no. Apple has as much as admitted it wasn’t ready, and no longer promotes it as it was originally stated “Exchange for the rest of us.”

Steve Jobs said in an Apple internal memo in August:

It was a mistake to launch MobileMe at the same time as iPhone 3G, iPhone 2.0 software and the App Store. We all had more than enough to do, and MobileMe could have been delayed without consequence.

This appeared to be a back-end infrastructure problem, at least on the first day during what has been called the iPocalypse. Why Apple did not take advantage of VMware Fusion technology to avoid the server meltdown earlier, is hard to understand. But MobileMe still isn’t performing as expected. iPhone updates “to the cloud” is occasionally near instantaneous, if you have “Push” turned on in Settings — another real battery killer — but synchronization with iCal/Address Book is at best 15 minutes out.

To that end, Apple has twice offered extensions to users’ annual contract, first one month, the second time two months.

• Battery Life

My personal biggest complaint is the battery life. While Steve Job’s launch said the battery in the 3G is superior to the 1st generation, that has not been my experience, nor that of most of the people I know and correspond with. While it may be the case that the battery is better than the 1st Gen when both devices are in standby mode, the new iPhone 3G has capabilities that the 1st doesn’t, and one or more of those may be the culprit. Here are some examples:

GPS radio: I’ve seen this feature run a device dry, even when plugged into a car lighter charger. I now usually leave “Location Services” off.

3G radio: AT&T’s coverage maps is, shall we say, wildly optimistic. I live in the coverage area, but only get one 1 bar. Not all locations in the country get coverage, I usually leave this off.

“Push” email: Microsoft Exchange, and even MobileMe support pushing email to the iPhone, but this can run down the battery faster. I only push Exchange.

3rd party apps: some of these are location-aware — which turns on the GPS to find your location — others apps connect to Web servers. I suspect some buggy versions are a battery culprit.

Bottom line: is it a keeper? Sure. I trust that upcoming firmware upgrades address some of these issues, more stable apps are less sloppy in their use of memory and battery, and that some killer apps do come over the horizon.

Thanks for coming along.

BillPetro.com

Christmas came a day early for iPhone Phans. They were expecting the iPhone 2.0 firmware update on July 11, but it became available for download (if you knew where) along with the new MobileMe software (ditto) and early adopters were updating their iTunes software to version 7.7 and examining the new AppStore (discussed below), which is already online.

I’m not talking about the new iPhone 3G device, which debuts tomorrow, rather the iPhone 2.0 firmware update — which will also run on the 3G by the way. iPhone 2.0 runs on today’s iPhone version 1.0 device.

AppStore

More than 550 applications are available at opening, 130 of them are free. The iPhone Phaithful began downloading these applications this morning.

• Prices: $0 – $69.99
• Free: about 25% pf apps
• $0.99 – $9.99: about 70% of apps
• Over $9.99: about 6% of apps

The selection of applications at the AppStore range from the sublime to the silly.

For the sublime, Epocrates Rx is highly valued by physicians and is indespensible in their moving from the Palm, Windows Mobile, or BlackBerry platforms — to the iPhone.

On the silly side, PhoneSaber is a little application that allows you to display a lightsabre, in your choice of color — upon your iPhone screen — and when you move and rotate your iPhone, it makes the renown Star Wars lightsabre sound. But it’s cool.

Loopt on the other hand, is one of the first of many location-based social media applications. There are over half a dozen presently on the AppStore, including MySpace, Facebook, and Twitterific (for Twitter) but this one ties in friends and location in new and innovative ways — as was shown at the Steve Jobs announcement at the recent Apple WWDC.

Remote, which has become popular in the first day, is an application that allows you to control iTunes remotely via WiFi. The iPhone is becoming a universal remote, software utility belt, and information treasury.

Applications drive volume in attracting both developers and consumers to a new platform. Windows Mobile has many applications available for smartphones, the Palm platform has thousands of applications. For Apple to jump in to this market with over 500 applications on the first day is remarkable. Many have complained that it took Apple a year to open up the platform. Those who couldn’t wait would “jailbreak” their iPhone to install 3rd party apps. But now there is a remarkably easy and attractive way to select, download, and install free or inexpensive software applications for this device. In addition to syncing from iTunes, applications can be downloaded and installed over-the-air from the AppStore application on the iPhone.

Installation

Installing the iPhone 2.0 firmware update is quite straightforward. After downloading it through iTunes — which you’ll first want to update to version 7.7 — you install the firmware update to the iPhone. You have a choice of “wiping” the iPhone clean, or installing it and retaining all your settings. I elected the former, as I wanted a pristine device. However, if you want to keep your settings, note that by using this approach you may lose your Notebook data on the iPhone and all your email account settings, along with other settings and home page bookmarks.

In this scenario, I elected to restore my Calendar and Contacts – essentially overwriting the iPhone with iCal and Address Book information.

More details in my next post.

Bill Petro
www.billpetro.com