January 15, 2007
iPhone, Apple TV, and Social Networks for Switching Contracts

Of course, the big news of the end of the week that I have yet to focus on is the major announcement, or at least the one that's gotten major press, from Apple as to the new iPhone and Apple TV.

For those who haven't heard about the new products, the iPhone is a mobile phone that has video capability, with the screen being both touch-activated and a place to view video content. Meanwhile, Apple TV, is a wireless device that will link televisions to the Internet, which has been talked about since September, when it was called iTV.

The iTV announcement was one of three major news items back in September from an Apple press conference, along with plans for the iPod to branch further into casual gaming and plans for movies on iTunes. At the time, I wrote that the iTV plans had the Internet most abuzz, with plans for users to be able to transfer television and film content from iTunes to their TV sets wirelessly. Apple TV, which costs the projected $300, has generated a new round of buzz now that the product has been officially announced. Back in September, I wrote about Arik Hesseidahi's story in BusinessWeek that "provides a comprehensive account of what this means for transferring digital content to the television and both why Apple is leading this initiative and why it is a benefit to have a company like Apple leading the way, considering their phenomenal track record in this regard."

At the time, questions about digital rights management were at the forefront of user concerns, including questions about how DRM might affect the technology and also questions about how such a service might provide the groundwork for a legitimate challenge to cable television and satellite subscriptions, particularly VOD, with shows purchased on-demand and then streamed to the television.

The folks at Macworld provided further easy-to-read information about the technology back in September.

As for the iPhone, this provides a challenge for the Verizon V CAST we've written about before, which explains why this is Cingular's retaliation. However, I'm most interested in the product right now as a gated device, since the phone will only be available for Cingular subscribers. Definitely a coup for Cingular, but what is the dangers for Apple being exclusively linked to one provider? I'm a Cingular and T-Mobile customer, but won't be buying a new phone anytime soon since I just recently got a BlackBerry Pearl and my wife a Treo. However, what about the millions of Verizon customers or a variety of other service providers. Has anyone heard if Apple will be expanding the iPhone availability to other services as well?

I've written in the past about the dangers of gated content, but a phone isn't really content. Do you think there is any damage to the makes of a phone in linking their product exclusively with one service? Since Cingular is the nation's largest cell service provider, I guess this would be the one to link your phone with if you had to have exclusivity, but I'm always surprised at deals that limit the distribution of a phone solely to one provider. Guess it's just the way the business works, but Apple has made its reputation for being user-focused, which probably makes for a lot of unhappy Apple fans with Sprint.

Of course, there are services to deal with this. Has anyone read about Cellswapper? The new site is a place for users to connect and switch their cell phone contracts for whatever reason. As Svetiana Gladkova writes at profy, the site could be considered a pragmatic social network, helping users avoid fees to get out of their contract early, since you can swap your contract with someone else.

Svetiana writes, "I believe that CellSwapper's popularity will gather momentum by June when geeks willing to buy the new iPhone will need to terminate their current cell phone contracts. At least, this will bring sellers to the website. But it is still vague if they manage to bring enough buyers here." It will be interesting to see if this prediction becomes true. Will viewers care about a phone enough to switch services? Will there be enough non-Cingular users willing to switch with these people if they do? After all, you can only swap a cell if there's just as many people headed in the other direction.



After reading the blogs and checking the specs on these new "revolutionary" devices...I'll pass. Apple is releasing 2 more crippled devices for way too much money. The ATV doesn't even stream divx/xvid which a ton of people use. sorry, try again


Matt, no doubt there are plenty of concerns people have about these devices, and you're not even bringing up questions about DRM. The thing about it is, from a perception standpoint, Apple's release of a device is, in some ways, the tipping point into the public conscious. So, even if you are unhappy with the product, there is still no denying that this is a major event, even if the devices themselves are not to your liking.


Hi Sam! Thank you for quoting me in your very interesting post. I do understand that my prediction may prove wrong after all. But with so many bloggers willing to switch to iPhone (Michael Arrington from TechCrunch and Profy CEO included) I think the demand will be quite high. But sure it does not mean that they will all go to Cellswapper to find buyers for their contracts. And anyway buyers will need a reason to go their - and I do not see any reason so obvious for them.