Apple launches iPhone, reinvents itself

By siliconindia   |   Thursday, 11 January 2007, 18:30 IST
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San Fransisco: Apple is well on its way to reinventing itself as the next consumer electronics biggie. Apple CEO Steve Jobs on Tuesday unveiled the company’s latest offering; the iPhone—a touch-screen-controlled device plays music, surfs the internet and delivers voice mail and e-mail differently than any other cell phone. What’s more, to underline it’s change in focus, Apple changed its name from Apple Computer Inc to just Apple Inc to better reflect its transition. Apple TV, a set-top box that streams video from computers to television was also launched along with the iPhone at the annual Macworld Conference and Expo in San Francisco. The Economic Times reported this today. It is to be seen though whether the iPhone, priced at $500, coupled with a few other gadgets, will help the company retain the market dominance enjoyed by iPod. For many industry watchers, the pricing of the phone itself is a bit too high. James L McQuivey, a communications technology professor at Boston University said: “Prospects for the new device are positive, but it is not a given that Apple can win against a slew of wireless providers, phone manufacturers, and Microsoft, all of whom are similarly motivated to raise their flag on the same territory.” The phone’s name too clashes with Cisco’s new iPhone line of Internet-enabled phones launched last month. Though Apple executives say their cellular phone doesn’t compete with Cisco’s internet phone, the latter is agitating for Apple to make a public statement clarifying use of the name. Cisco incidentally has owned the trademark on the name “iPhone” since 2000. The uncertainty and unavailability of Apple’s phone—it will hit the market only in June—notwithstanding, Wall Street lauded it. Apple shares jumped $7.10 to close at $92.57 on the Nasdaq Stock Market, creating about $6 billion in new shareholder wealth. The stock has traded in a 52-week range of $50.16 to $93.16. Nearly 120 million Apple shares changed hands Tuesday, more than 4 times the average daily volume. In rection to the unveiling of iPhone, shares of other smart-phone makers slid: Treo-maker Palm dropped 5.7 percent, BlackBerry’s Research In Motion lost 7.9 percent and Motorola shed 1.8 percent. Tim Bajarin, principal analyst with Creative Strategies noted, “The iPhone appears poised to revolutionize the way cell phones are designed and sold. Cell phones are on track to become the largest platform for digital music playback, and Apple needed to make this move to help defend their iPod franchise as well as extend it beyond a dedicated music environment.” Apple’s iPod since its launch has managed to hold on to about 75 percent of the market for downloaded music and portable music players. The success has catapulted iTunes, the company’s digital media store beyond Amazon.com for digital media sales. It has sold more than 2 billion songs, 50 million television episodes and more than 1.3 million feature-length films. In comparison, initial hopes for the iPhone are relatively modest. The company has targeted to sell about 10 million units in 2008. That’s roughly 1 percent of the market, considering that about 957 million cellular phones were sold in 2006. Apple TV, on the other hand, priced at $300, has a 40-gigabyte hard drive and stores up to 50 hours of videos, 9,000 songs or 25,000 photos, and will be available in the market February onwards. During the unveiling of the products, Phil Schiller, Apple’s senior vice president for worldwide marketing, sought to clarify that despite the change in name, Apple isn’t getting out of the computer business. “We sell Macintoshes and will continue to do so and are very happy with that business,” he said.

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