Apple, Operator War Averted (for now)
Why focus on the microphone? Because with a microphone in the iPod touch, users could reap most of the benefits of the iPhone – downloadable games, video, music, the ability to leverage their contacts and email – but without a carrier in the loop.
Why would this change have been huge? Because Apple’s early strategy was to share in the data revenue with operators, a strategy that has shifted with the introduction of the 3G iPhone to expanding distribution, launching new operators, and selling applications from the Apps Store.
With a microphone in the iPod Touch, Apple sells the hardware, Apple sells the apps, Apple brings itself even closer to the customer – and the operator gets relegated to second-class citizen. But wait, you say, an iPod Touch with a microphone would just work with WiFi, which would be really limiting in real-world use. Not so fast there, bucko.
I’m a multiple device kinda guy – not everyone is, but it seems there are plenty of my type out there. I’ve seen a bunch of articles, especially focused on the business crowd, where folks use their iPhone as their “pocket computer” and use a phone and/or BlackBerry as their primary communications device. As an owner of an iPod touch (one of my small armada of iPods), and having downloaded apps from the Apps Store to my iPod Touch, the potential power of the missing microphone becomes apparent. I’d rather do my email (even Exchange based) and browse on an iPod Touch than on a phone any day.
However, even without Apple’s support, folks may find, cracks are appearing, indicating the war of the future. If you have a Series 60 phone – like the Nokia Corp. (NYSE: NOK) N or E Series – you can download an application like Joikuspot, which allows your 3G Symbian device to be used as a hotspot. Then, if you Google “iPod Touch Mic” you can see there are a bunch of third parties looking to create microphone/VOIP solutions for the iPod touch and numerous YouTube Inc. videos showing users how to make them work.
I like the concept, as it seems that one could get the majority of the utility of the iPhone out of an iPod touch, without the current headaches, and without an expensive monthly subscription. Assuming, that is, Apple doesn’t try to actively kill any VOIP apps that might want to be downloaded to an iPod Touch.
Because, in my view, an iPhone 3G is not simply “twice as fast, and half the cost,” but yet another device locking people into multiyear contracts with a two-year cost of ownership of over $1,500 for a device with 8 or 16 GBytes of storage, which in reality doesn’t cut it for music and video, versus $399 for a 32-GB iPod Touch. Ouch.
As I’ve written several times in the past few months, if a policy or approach to a market is whacked, and if there are ways that a rational consumer can navigate alternatives, they will.
But – for now at least – by leaving the microphone out of the iPod Touch, Apple has averted its war with the operators.
— Jeff Belk is a principal at ICT168 Capital LLC, focused on developing and guiding global growth opportunities in the Information and Communication Technology space. He can be reached at [email protected]. Special to Unstrung