Tech Features

iPhone could remake Apple, cell-phone market

By Andy Goldberg Jan 10, 2007, 12:01 GMT

Apple Inc. (new name) CEO and co-founder, Steve Jobs introduces the new Apple iPhone during his keynote at the Macworld Expo in San Francisco, California Tuesday, 09 January 2007. The new iPhone, incorporates iTunes, phone, and internet device running Mac OS X. The device goes from vertical to horizontal by just turning the device either way. EPA/JOHN G. MABANGLO

San Francisco - Iconic companies like Apple Computer Inc don't change their names on a whim.

After all, this was the outfit that pioneered user-friendly computing with its Macintosh operating system and revolutionized music habits with its iPod. For 25 years, Apple Computer has stood for everything cool about cutting-edge technology.

But none of that history could stand in the way of Steve Jobs, the company's legendary co-founder and chief executive, announced Tuesday that from now on Apple Computer Inc would now be known simply as Apple Inc.

Most people have for years been calling the company just that. The official change recognizes that the iconic Silicon Valley outfit could be on the verge of one of the biggest opportunities in tech history.

Jobs announced the name change after unveiling the company's revolutionary iPhone. This slim, handheld gadget is the first device to deliver on the Holy Grail of the tech industry: a converged gadget that fits in your pocket and can phone calls, take pictures, do email and function as a mobile computer, all in an easy and intuitive manner.

The device starts selling in June in the US market, and analysts expect that as the iPhone is rolled out, it will become the must-have device in the global cellphone market, which last year saw sales of 1 billion units.

Getting even a small slice of that pie will dwarf the revenue generated by the 70 million iPods that Apple has sold since the first model was introduced five years ago.

But Apple is aiming even higher. It sees the iPhone and its planned successors as the essential tool that people will use in the fully mobile, always-on digital world that is just around the corner.

'The iPhone is a disruptive technology that could revolutionize the market,' said Carmi Levy of the InfoTech Research Group. 'It's the most compelling converged device we've seen so far. Apple is hoping that when you leave the house, the one device that you'll carry will be the iPhone.'

You can be sure that the current titans of mobile telephony - Nokia, Motorola, Sony and Samsung - were paying close attention to Jobs' iPhone presentation. The last thing any of them want is a fancy new competitor who takes away their best customers and makes them look like technology laggards.

The financial markets were also paying close attention. Though rumours of the iPhone had been swirling for months and had presumably been built into Apple's high-flying stock price, Job's announcement sent the company's shares soaring Tuesday by 7.5 per cent.

At the same time, shares of Research in Motion, which makes the Blackberry - currently the most popular smartphone - went into a 6 per cent nosedive at news of its intimidating new competition.

While the iPhone has the potential to remake Apple into a consumer-electronics superpower, some people might be troubled by a disturbing sense of deja vu. When Apple launched the revolutionary Macintosh operating system in 1984, the graphical user interface was vastly superior to any of competing computers.

But the company failed to turn the Mac into a mass-market device - preferring the higher short-term profits of a high-end niche - and ended up as a trendy but ultimately marginalized, bit player in technology for the next 20 years, as Bill Gates and Microsoft dominated the industry.

Levy believes that Apple is unlikely to repeat the Macintosh mistakes, which centred on a refusal to licence the technology to other companies.

This time, Apple is partnering with US mobile-phone giant Cingular, and also with Google and Yahoo, to make sure that the iPhone fulfils its undoubted potential. That's a smart move according to Levy.

'The handset market is a massive market,' he says.

'The iPhone will not immediately displace conventional cellphones from the buckles of the nation, but it points the direction. If Apple converts on the promise of the iPhone, Apple today and Steve Jobs will become much larger and more iconic. It's going to be an interesting ride.'