Newer, Faster, Cheaper iPhone 3G
Apple Inc.'s iPhone has been the world's most influential smart phone since its debut a year ago, widely hailed for its beauty and functionality. It was a true hand-held computer that raised the bar for all its competitors.
Context & Ripple Effects
In June, coverage had already cast the handset as the benchmark for challengers, including an imitator presented as an iPhone rival. AT&T Mobility's chief also called the incoming model a wireless game-changer, putting the carrier relationship at the center of its market impact.
The 3G model tests whether Apple can turn the original iPhone's design and software reputation into broader smartphone adoption through faster connectivity and a lower entry price.
First-order effects
- Apple gives prospective iPhone buyers a faster, lower-cost version, widening the product's appeal beyond the first generation's early adopters.
- AT&T Mobility faces greater demand for data-capable iPhone service as the new model reaches its customers.
Second-order effects
- Phone makers positioning devices as iPhone alternatives must compete more directly on handset experience and mobile-data capability, not merely on feature lists.
- Carrier plans and network quality become more visible parts of smartphone competition because the product proposition depends on faster wireless access.
Third-order effects
- If lower-priced, data-centric smartphones gain traction, handset competition shifts toward integrated devices whose software experience and carrier connection are sold as one proposition.
- The iPhone's influence points to smartphones displacing the conventional phone as the reference product for mobile computing, forcing both device makers and carriers to adapt.
The trend: Smartphone competition is moving from standalone handsets toward integrated hardware, software and mobile-data experiences, with lower prices expanding the addressable market.