iPhone bedlam dissected

By Phil Carson
Data is a damnable thing. It is what it is, but the devil's in the interpretation.

The same could be said for the Apple Inc. iPhone, hailed as a disruptive force that could change the handset vendor-network operator business model and pave the way for…

Well, if you want to find out where this juggernaut is headed, Compete Inc. will deliver its data on consumer shopping behavior around the device, and the implications will be debated today in a roundtable discussion at 11 a.m. in Moscone Center Room 250.

The discussion features Adam Guy, director of the wireless practice at Compete; Lee Ott, director of Yahoo Mobile Web; Cyriac Roeding, executive VP at CBS Mobile; David Ulmer, senior director of entertainment products at Motorola Inc.; and Sam Altman, CEO of loopt, a mobile social-networking startup.

“To what degree does the iPhone crack open the carrier’s deck?” Guy asked rhetorically. “Will this device put pressure on carriers to open their networks to any and all kinds of applications and devices? We want to talk to every link in the value chain and find out how the iPhone is affecting it.

“The market is ready to pay for all kinds of useful applications,” Guy added. “Our role in the conversation will be that of the consumer, as the final link in the value chain.”

The outcome, Guy suggested, is the intersection between consumer interest and what makes business and technical sense for all involved.

Compete’s findings on the iPhone led it to conclude four points: mobile handsets need to be marketed as consumer electronics devices, not as mere phones; consumers are warming to the idea of handsets’ actual, non-subsidized prices; smartphones are becoming a consumer draw; and smartphones that promise personal productivity—not just entertainment—will find a ready market.

Really? Well, Compete tracks Internet traffic to see how consumers behaved in the months before and after the iPhone’s June 29 launch, and it found a few data points that give pause.

In terms of consumer electronics, the iPhone at launch drew nearly three times the online traffic that Nintendo’s Wii gaming console did.

Online research overwhelmingly favored Apple’s Web site over AT&T Mobility’s site. Online interest in the iPhone did not translate into increased interest in AT&T Mobility’s other handset offerings. And consumers said they would pay extra for mobile services if they increased personal productivity, significantly moreso than mobile entertainment.

With data around consumer behavior from Compete and new data trickling in from other market analyst firms on the new terrain ahead, the iPhone’s impacts are the hot topic at a trade show that somehow straddles corporate productivity and entertainment.

The land between the two ends of the spectrum may well be where the new consumer animal lives, loving entertainment but needing productivity and connectivity.
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