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November 10, 2006

Term Project Blog 5: Apple iPhone

It is believed that Apple Computer Inc. may be coming out with an "iPhone" now that they have won a patent for a speech-recognition technology. “Apple + New Patent=iPhone Speculation” discusses the patent and speculation on what Apple will be doing with the patent. It is thought that Apple will create the "iPhone," which would be a cell phone with capabilities to both field calls and play music. Apple's iPod will have potential competition upon Microsoft's release of the Zune MP3 player. Creating a new product is an opportunity for Apple to maintain overall sales for the company. Apple attempted to launch a phone with Motorola in 2005 but failed, receiving negative reviews. Their initial failure could hinder the popularity of another Apple phone.

“Another Music Phone? Yawn...” in Business Week details the possible problems Apple will face if speculations are true and they actually do launch an "iPhone." Since there has been talk of an "iPhone" for months and nothing has been produced to the public, many are doubting its existence. If it is introduced into the market, some question the success it will have. Many analysts see something different as Apple's next big product. For example, they believe a Mac preinstalled with Windows capabilities or iTV would be much more popular in the market. Analysts see the "iPhone" market as current iPod users. Also, there is already competition in the cell phones handset market. The limited target market and the introduction of a product amongst already established products, have some seeing a gloomy future with low margins for the "iPhone."

Apple needs to differentiate their product in order to attract customers. It will be difficult to persuade those that do not use an MP3 player that they need a feature to play music on their phones. Additionaly, if a consumer already owns an MP3 player, they may not find it necessary to have music playing capabilities on their cell phone. There is room in the market for Apple to make a phone that holds more songs and makes downloading these songs faster and more efficient. This could take customers away from the competition, but would not influence others that they need this type of phone. It does not seem like this product would be a huge success overall, and it will be especially difficult for a company just entering the market. If ipod is going to introduce a music phone, it should do so while some hype still exists. With all of the speculation and no answers, people will give up the idea that Apple is launching this product and it will be even more difficult for Apple to attract a consumer base. We feel that Apple does need to introduce a strong new or modified product, since iPod sales are declining. The music phone would not be something we would be too interested in and feel another product may be better for Apple's sales.

Posted by traceyja at November 10, 2006 10:23 PM


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