ASIA!

Would you buy a new mobile phone today if you knew Apple was introducing its first-ever mobile phone sometime next year, maybe as early as March?

This is the burning question facing Nokia, Motorola, Samsung and other mobile-phone makers. After years of denial and months of intense speculation, it seems that Apple is finally ready to hit the market with a phone.

Steve Jobs, the charismatic founder and chairman of Apple, is notoriously obsessed — some might say anal to the point of psychotic — with keeping new products under wraps. Jobs is a showman at heart, and he has worked to great effect unleashing new products on an unsuspecting public. Anyone who saw a grinning Jobs pulling a razor-thin white iPod Nano out of his pocket in September last year is aware of his love of drama.

But for the iPhone (not the official name), the showman has been defeated by globalisation. Unlike the iPod family of products, which are basically MP3 music players (with the exception of the iPod Video, which plays video), the iPhone is a mobile phone. And one cannot produce a mobile phone in large numbers without going to Taiwan and/or China.

Apple did go to Taiwan. To Hon Hai/Foxconn, the world’s largest contract manufacturer of electronic products. Hon Hai has been a key supplier of the Mac family of computers to Apple for many years. By all accounts, Hon Hai kept mum about the iPhone deal. But no secret can be kept for long in Taiwan. By November, enough details of the iPhone had leaked out to convince the market that its launch was imminent.

Industry talk is that the iPhone will be white, like the iPod. It will be a combination of phone, MP3 player and camera (initially two megapixels). And like the iPod, it will have a trackwheel for users to quickly negotiate between menus. On some models, in fact, there will be no number pad, just a simple trackwheel on the front. Apple has placed an order with Hon Hai to make 12 million iPhones, and analysts think it should be able to sell up to 4 million in the first year. The selling price will be around US$300.

Each year the world consumes about 600 million new mobiles. At 4 million, Apple will not even take away 1% of the market. So why are its would-be rivals — including Motorola, which made the Rokr mobile phone incorporating a truncated form of the iPod — worried?

Apple has always managed to punch above its weight class. And its products, a marriage of clean design and superb technology, have always set the tone for the market niches they occupy. For personal computers, the Mac family has perhaps 3% of the market. Yet it consistently forces Microsoft, which has a stranglehold of over 90%, to play catch-up in design and features.

Mobiles have become highly personalised products, and no one appeals to consumers on a personal level better than Apple. The introduction of the iPhone, if the experience of the iPod Nano is anything to go by, will change the market fundamentally.

Phone makers are worried there will be an explosion of demand for the iPhone similar to the one for the iPod. For the fourth quarter of this year, analysts expect Apple to sell 17.7 million iPods and 1.8 million Mac computers, somewhat higher than the estimates made by Jobs a few months ago. If the iPhone takes off, it could be a serious competitor for Nokia and other manufacturers.

Rumours of an impending phone from Apple have been hitting the market regularly. But this time, talk is backed by substance. It appears Apple had filed a patent in August for a device that combines a cellphone with an iPod. This product will score a double first: it will be the first cellphone introduced by Apple, and the first product that offers iPod music playing wirelessly.

In late November, Microsoft, desperately trying to catch up with Apple in the fast-growing MP3 market, introduced its first player, Zune, which also has wireless functions. So far demand for Zune is respectable, but not hitting the iPod killer status that Microsoft had predicted. The introduction of the iPhone – which could be as early as January 9 at the annual Mac show, though the actual product will come later – could undermine demand for Zune.

 

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