John Dvorak: “Apple Should Pull the Plug on the iPhone”

In News on April 3, 2007 at 1:01 pm


This is why I love columnists like John Dvorak. He’s not afraid to make a stand, doesn’t mince his words by trying to weasel himself out of it, and most importantly put forward an argument that makes absolute sense in this climate of Apple iPhone overhype madness. There was a loud and heated debate on the latest episode on TWiT that had me clapping and cheering in the car when I was listening to it. Yeah, so Dvorak got a million more hits on his Marketwatch column about the iPhone’s future demise, but hey, the man does make a point. He’s not an Apple hater, just someone who sees bullshit is for what it really is: marketing hype.

The hype over the unreleased iPhone has actually increased over the past month despite the fact that nobody has seen or used the device. This, if nothing else, proves the power of branding and especially the power of brand loyalty.

It’s the loyalists who keep promoting this device as if it is going to be anything other than another phone in a crowded market. And it’s exactly the crowded-market aspect of this that analysts seem to be ignoring.

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 passé within 3 months.

There is no likelihood that Apple can be successful in a business this competitive. 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% market share.

What Apple risks here is its reputation as a hot company that can do no wrong. 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.

It should do that immediately before it’s too late. Samsung Electronics Ltd. might be a candidate. Otherwise I’d advise you to cover your eyes. You’re not going to like what you’ll see.

read more | digg story


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