Friday, July 25, 2008

iPhone Predictions: A Post-Mortem

Now that we have had more than a year to assess the success of Apple's iPhone, let's see how the predictions of the marketing gurus panned out.

Laura Ries predicted that Apple would initially sell a lot of iPhones, but that ultimately the product would flop. I think it's safe to say that the iPhone has not flopped. Apple sold four million of them in a recent six month period. Ries has recently revisited her prediction.

Seth Godin predicted that the iPhone would be successful, and that Apple would sell more than two million of them in 2007. I suspect he was right about the 2007 sales.

From a marketing perspective, the most important observation about the iPhone is that it has not turned out to be so much of a convergence device. While much of Apple's initial marketing touted the iPhone's merging of music, Internet, and phone capabilities, that perception in the mind of the consumer has not taken hold. In fact, 51% of iPhone purchasers say they will use an iPod in addition to an iPhone.

If you look at the comments by Brandon and Thomas on a previous entry on iPhone predictions, you'll see that they pretty much hit the nail on the head.


Paul Young said...

Ries seems very focused on the hardware features and convergence/divergence of the iPhone; and misses the mark completely. What makes the iPhone work is the _software_, which enables an incredible platform for apps with all sorts of potential. FWIW I love browsing the web on my iPhone, even non dot mobi sites.

Paul (from my iPhone)

Roger L. Cauvin said...

Paul, to be fair to Laura Ries, she is concentrating on the marketing and branding aspects of the iPhone. In that respect, she is right to address the convergence issue.

Nevertheless, the issue from the beginning was whether the iPhone is a convergence device or creates a new product category. It's a mistake to equate convergence of technology with convergence of product categories. While Ries will be the first to tell you that what matters is the perception in the mind of the prospective and existing customer, it appears she conflated the two types of convergence in this case.

It seems the iPhone has been a success and has created a new category in the mind. What does "iPhone" mean in the mind of the customer? I'm not sure, but perhaps it means "stylish smartphone".

Mike Lunt said...

It seems like there is a much more fundamental misconception at play here. In my mind, the technology has not yet been converged between the iPhone and the iPod.

Sure, they can both play music, but once Apple came out with 80 and 160 GB iPods, many people, such as myself, could never downgrade to 4, 8, or 16 GB.

There is technology overlap but not a full convergence in this case, which makes it difficult to say whether the marketing attempts at convergence can/will succeed.

Roger L. Cauvin said...

Mike, your observation that the iPhone would be a downgraded for existing iPod owners is important. Far from being a "misconception", however, it actually strengthens the case for those who criticize convergence.

When you merge two different functions into one product, you typically end up with a product that is inferior at both functions.

Al and Laura Ries once wrote:

"Why are divergence products generally winners and convergence products generally losers? One reason is that convergence products are always a compromise."