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Apple iPhone Will Fail in a Late, Defensive Move (2007)

123 points by JoeCortopassi 13y ago

asharpe 13y ago
Wow - how could they be so wrong. I especially like the incumbents: Nokia and Motorala ... where are they now?
- D9u 13y ago
  You took the words right out of my fingers! It just goes to show how accurate and prescient many "news" organizations really are.
  - VintageCool 13y ago
    Not to mention those IT Research firms like Forrester and Gartner that put their finger to the wind and try to guess which way the wind will blow, then announce it the trade magazines.
  - haukilup 13y ago
    This is an opinion piece by one writer. You may have a valid point, but this article doesn't support your claim whatsoever.
    - SG- 13y ago
      It wasn't just one writer or person in the industry saying this at the time. I'm not sure why this article got posted here today, but I think it's likely to make us reflect at how terrible some of these analysts and firms are even today.
  - asharpe 13y ago
    I actually worked at Bloomberg when this article came out (in product). While he was writing this in the news organisation, we were busy providing one of the launch apps for the iPhone under strict confidentiality. Also, 5 of my colleagues queued up for hours to buy them on the first day ... one actually bought two - one to keep as a collectors' item.
- WoodenChair 13y ago
  It's not a "they", it's a "he". This is one dude's perspective who obviously lacked some vision. Most people who played with the iPhone when it came out knew it was going to be huge. It was just so much better than anything on the market. My guess is the writer had a bit of an anti-Apple bias based on the tone of his early paragraphs.
  - Retric 13y ago
    This is not a blog post, there was far more than one person behind this article. Which is why ignoring the browser and only saying "as well as having wireless Internet access for e-mail" vs "as well as having wireless Internet access for e-mail and web browsing" was a huge mistake. About the January 9th demo: It worked fine if you sent an e-mail and then surfed the Web. http://gizmodo.com/the-iphones-first-demo-was-buggy-as-hell-1441324523 http://gizmodo.com/the-iphones-first-demo-was-buggy-as-hell-... Note gizmodo is talking about the actual devices the demo worked fine but at the time it was far from being ready to be released.
- Navarr 13y ago
  Motorola just finished launching their what appears to be fairly successful Motorola X and G lines under the Google name (after being purchased by Google) and is being sold to Lenovo. Motorola is making the best phone I've used to date. Nokia is making amazing camera phones with Microsoft. In my world it's "where is apple now?" None of my coworkers were super pumped about the new iPhone. Before they left the company they were pumped about iOS 7 but just barely ("thank god they got rid of skeumorphism"). To me, despite how wrong this article was, the headline itself looks like it'll be coming true. Apple has been playing defense these last two or three years. Immense props for their initial creation, but the movement it spawned will end up much more wildly successful than Apple will. And the iPhone will fail in a late, defensive move.
  - SG- 13y ago
    I haven't seen the new moto phone anywhere myself or heard it make any news other than Verge type site reviews, so what does "fairly" successful mean? Nokia isn't making anything amazing these days, i suppose they are making the phone with the highest megapixels and phoney ads pretending it was shot on the phone.
    - Gigablah 13y ago
      > Nokia isn't making anything amazing these days Uh, what? I ditched my Nokia a while ago (I hated the ecosystem) but the Nokia Windows phones are undeniably rock solid hardware.
      - SG- 13y ago
        I'm not saying the Nokia Windows phones are good or bad, but they aren't amazing and rocking the market right now. But your comment brings up another point, it's not just about the hardware these days like it used to be for phones, software is just as important.
  - Nashhhh 13y ago
    Exactly! When I saw the headline, that is what I thought it would be about: how apple has been playing defense and is destroying itself. They have been innovation free since the iphone 4 and it shows. Unfortunately, they made the wrong call on screen size and it's taken them 4 years to catch up. They also really need to drop this one-model-per-year schedule. Competition is too strong now. They need to release their BS "s" models midyear.
krisgee 13y ago
>The mobile-phone industry is becoming a cozy cartel between the network operators and a limited range of manufacturers. It could certainly use a fresh blast of competition from an industry outsider. HA! Yeah that really worked out eh?
- IBM 13y ago
  It certainly did but only for Apple. Everyone else doesn't have the market position to make the same demands on carriers.
  - adventured 13y ago
    Has worked out extraordinarily well for Samsung. They're making $30 billion a year in profit now, a drastic increase from five years ago. They have as much clout as Apple does these days, if not more given their position in manufacturing components.
coreymgilmore 13y ago
Apple stock when this came out: ~$94.00. Gains to date: ~456%. Doesn't look to bad to me! Now lets look at the cash hoard Apple has: it is enough to buy Nokia and Motorola numerous times over. Now if only the author of the article would have written about 'apps'. Would he have labeled them as niche as well? I would have loved to see an argument in 2007 for the multi-billion valuation developers are getting now.
- craigc 13y ago
  When the iPhone first came out there were no native apps. Only web apps. There is no way people would be making this much money if Apple hadn't opened up the platform.
  - arrrg 13y ago
    In fact, I seem to remember that people were pretty much immediately complaining that there was no (official) way to bring third party apps to the iPhone (except for web apps). If I remember this was also a major criticism: Some other phones at the time could install third party software, the iPhone could not. However, despite the ability of installing third party apps existing in many phones, that never really took off before the iPhone SDK came out. (Also, the iPhone did have a relatively slow start. It sold well and along with what Apple was publicly stating as its goal, but it took a generation before the phone really did take off like a rocket.)
    - abruzzi 13y ago
      I've heard some claims recently (perhaps true) that Jobs didn't want third party apps, but at the time the interface was so obviously suited for apps that I assumed that they simply hadn't had time to put together what was needed for third parties to build apps. At the time they talked about web apps, but it felt like stalling, then a year later the app store launches.
      - Nashhhh 13y ago
        It's true (apple fanboy here, I remember it well). He was adamantly against them. If you look around, he did a whole keynote where he tried to present web apps as just as good as native apps-- it was ridiculous. He'd been dead wrong before as well: just a few years before the iphone, when people wanted to see an ipod with video capability, he said nobody would ever want to watch video on a mobile device. It really bugs me that apple makes these "nobody would ever want" proclamations and then reverses itself without saying, "we goofed". The next one coming is 5+ inch screens for the iphone. They'll make no mention of the fact that they criticized large screen phones before ("look, my thumb goes from corner to corner!"). Oh well.
discordance 13y ago
I'm curious as to why this doesn't affect the credibility of the writers that publish this sort of garbage? Matthew Lynn, the author, has continued on over the years to publish stories for the WSJ and HuffPost.
- qq66 13y ago
  Credibility or marketability? The publications only want pageviews. Articles like these get them, whether they end up being right or wrong.
- dear 13y ago
  The general public has short memory. The 'analysis industry' take advantage of that.
- drawkbox 13y ago
  At the time they may have been right, but the truth involves a time element. At closer look, it shows how immensely popular and desired what Apple was bringing to market was to overcome opinions like that. Back then that was the reality. I think when you go back and look at changes, many time it focuses on mainstream people who were wrong. But it was really everyone in the industry was wrong at that time, and shows how amazingly time and innovation through research and development can unseat the current reality. I know I realized how big it was the moment I read OpenGL ES and the announcement of the SDK at the Keynote in that it was a new handheld gaming market. However I thought it would be a smaller market like the current social/casual game market at the time. It turned into engulf and change the entire thing and has the biggest player population of all now while putting the other companies in defensive positions (Nintendo/Sony/Microsoft).
- deleted 13y ago
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- djur 13y ago
  Do you expect to get fired from your job if you make a single wrong decision or prediction? I can't speak to this particular writer but a lot of very intelligent, insightful people have been very wrong about important things and still managed to maintain their credibility by being right about other things (and for being wrong for credible reasons). The big thing that helped the iPhone take off, the App Store, wasn't out yet. Things changed rapidly.
keeptrying 13y ago
Great Quote: "Don't let that fool you into thinking that it matters. The big competitors in the mobile-phone industry such as Nokia Oyj and Motorola Inc. won't be whispering nervously into their clamshells over a new threat to their business." Nokia and Motorola and clamshells ... :)
outside1234 13y ago
What he didn't foresee then was the app store (it hadn't been invented yet). That is really what changed everything.
- t1m 13y ago
  Well, the iTunes store came online in 2003. Not much of a stretch to foresee a marketplace for apps much like the marketplace for music. Whether it would be successful or not is another thing.
  - fvrghl 13y ago
    I disagree; apps were never a guarantee. Steve was adamant about not having 3rd party apps on the iPhone for a long time. However, with 20/20 hindsight it's easy to see.
    - guywithabike 13y ago
      Steve was also adamant about not doing a phone in the first place, not doing a tablet, etc. The point being that Steve always publicly denied wanting to do something that privately he was already investing significant resources in doing.
      - bluthru 13y ago
        From what I've read it's much simpler than that. Steve would argue passionately for both sides of an issue before reaching a conclusion.
    - megablast 13y ago
      Despite Steve, there was already apps on the iPhone 1.
  - bduerst 13y ago
    If you had said "App" in 2007, nobody would have even known what you were talking about. http://www.google.com/trends/explore#q=apps%2C%20mobile%20apps&cmpt=q http://www.google.com/trends/explore#q=apps%2C%20mobile%20ap...
NaOH 13y ago
It's easy to say this writer and those cited in the article were wrong. More broadly, reading this reminds me of an Economist article from a couple years ago discussing how Fuji and Kodak took different paths when digital cameras took off, and the choices made then led to the companies' positions today (one defunct, one doing well). What I took from that Economist piece wasn't just the history lesson, but the reminder that what looks wise in the near term (what Kodak did) isn't necessarily best in the long term, and vice versa. In fact, Kodak likely sowed the seeds of its demise when they took the lead position in the digital camera space. So re-reading this iPhone piece merely reminds me how difficult it is to prognosticate, and that’s an important lesson for those of us in guiding roles, both personally or professionally. http://www.economist.com/node/21542796 http://www.economist.com/node/21542796
- babesh 13y ago
  True but I bet some people are better at predicting than others. Would be interesting to collect and analyze peoples predictions. Example stock market.
- 3327 13y ago
  Correct easy to point the finger after the fact however this is not a one of case, specially of now it all wallstreet firms and analysts. The source evades me but there have been more than one bloomberg articles brushing of a new technology as a small stint and "fan club". And i think it is fair to rub it into the faces of firms like bloomberg and economist whom have a "mater of fact" stance/tone.
- cclogg 13y ago
  P.s. speaking of Kodak, I give them +1 for still producing film stock (and continually improving it!).
  - lostlogin 13y ago
    I give them -10 for their medical imaging equipment. Its god awful. They sold it off, but the invention of it just kills me. Try logging in with a long password on a software keyboard when the touch targets and display image are off. http://www.blockimaging.com/items/kodak-directview-cr-825-cr-14825/kodak-carestream-cr-825-2 http://www.blockimaging.com/items/kodak-directview-cr-825-cr...
dbroockman 13y ago
The author subsequently scored a gig at the WSJ with multiple columns.[1] Funny how the ability to accurately comment on industry is not a useful qualification for being employed to comment on industry. :) (Written somewhat tongue-in-cheek obviously, I'm sure he has gotten lucky before with predictions before too.) [1] https://twitter.com/mattlynnwriter https://twitter.com/mattlynnwriter
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kin 13y ago
I remember this time. I, like many others, hated the iPhone. The app store was young. There was no basic functionalities like copy & paste. There was no multi-tasking between apps. You only had the option of one carrier (AT&T). The list goes on. I stuck with the Blackberry. Then, Apple executed. It delivered on hardware, and the app store blew up.
- ekianjo 13y ago
  Multi-tasking is still not really working like real multi-tasking works usually.
- mark_integerdsv 13y ago
  I never understood you guys. Blackberry had no apps so interoperability and copy and paste barely had any use cases. The other smart phones of the day were Windows powered bricks like the i-Mate line which were so dog slow,and hideously unreliable that frankly I might as well not have had a phone for the two years I used a K-Jam. iPhone came on the scene and it was like for the first time it made sense to lug around a larger device. Best iPod ever on that thing. Big screen for videos, real browser and everything it did do worked. Not like the Windows phones which had tech spec as long as your arm but crashed if you tried to perform a most if the functions. Seriously, I remember having to remove the battery to reboot my device after simply trying to connect via Bluetooth to a samsung flip phone. I didn't care if the iPhone couldn't do that because I knew that the others couldn't even if they said they could. Caveat: I'm from South Africa and we never got the Palm phones this side.
  - easong 13y ago
    I was a big iPhone hater at the time. Still kind of am. 1. It was really, really expensive when it first came out - there was a several hundred dollar price drop before it really took off, IIRC. 2. I had a windows mobile (HTC TyTN II) which was actually sweet. 2a. The slideout keyboard was way more accurate than the software keyboard on the iPhone, and Apple hadn't entirely figured out autocomplete (I think their keyboard is still poor compared to swipe etc, tbh). 2b. It was durable - it never died after being thrown off stairs, slammed on the ground, crushed in backpacks, stepped on, getting dropped in a river, etc etc. Towards the end of its lifepan, when I wanted to get an Android phone, I found that I couldn't easily kill it even if I tried. On the other hand, my friend shattered their iPhone by bumping their pocket into the corner of a table. 2c. 3g, and ATT only. 2g is basically unusable for browsing the desktop web, and ATT sucks. 2d. Anybody could, and many people did, publish whatever apps you wanted. I was able to download a full offline database of German public transit schedules and navigate flawlessly in cities I had never been to (which was a big deal), SSH into servers in emergencies (using the aforementioned full-size keyboard), full offline GPS of the continental US (something that's difficult to come by even today!) and so on and so on. The iPhone on launch was basically an expensive consumer toy, had no allowances for third-party developers, and Steve was telling everyone that they were better off without them. In an expansion of my last point, myself (and a lot of other people) didn't so much think that the iPhone was going to fail as dread its success. The iPhone, and really Apple, represent and drive the trend of consumerization and broader locking down of computing. And I think that we were right to do so - the broader population largely thinks of their handheld general-purpose computers as texting and passive content consumption devices, because that's all they're allowed to be. And that's sad.
nulagrithom 13y ago
I love that this article wasn't just wrong, it was _spectacularly_ wrong. I remember thinking many of these same things at the time. This especially would've rung true: Will your accounts department stump up for a fancy new handset just so you can listen to Eminem on your way to a business meeting? At the time? Of course not! Today? Standard equipment.
downandout 13y ago
The best quote in the article: "The iPhone will not substantially alter the fundamental structure and challenges of the mobile industry," Charles Golvin, an analyst at Forrester Research Inc., said in a report this month. There are three reasons that Apple is unlikely to make much of an impact on this market -- and why it is too early to start dumping your Nokia shares. This is comedy gold, but is also a good reality check about the mainstream news we read today. Not all predictions made by supposed experts will be accurate.
- morcheeba 13y ago
  This was one of the easiest things they could have gotten right. A phone you buy from the manufacturer instead of the carrier? That was revolutionary ... Verizon sold gimped versions of the RAZR and then charged you a monthly fee to ungimp them!
  - tricolon 13y ago
    That wasn't the only factor; all my Nokia phones I purchased from Nokia directly.
    - runn1ng 13y ago
      This. In Europe, carrier and manufacturer were decoupled for some time before iPhone, so it was not revolutionary in that regard.
      - crwll 13y ago
        Were they actually generally ever coupled in Europe in the first place? In Finland they weren't.
- burritofanatic 13y ago
  And I bet Charles Golvin now has an iPhone, probably two of them.
  - 13y ago
markb139 13y ago
I worked (contracted) in the Nokia world at this time. The big game changer the iPhone bought and I think was missed by Nokia and others was the inclusive and easy to use data. In the uk data on phones was very expensive and in some cases you had to configure the apn yourself. iPhone changed all that virtually overnight
poopsintub 13y ago
I read similar articles when the Z10 by Blackberry was being release a year or so ago. You had opinions of flops/world domination swinging both ways.
ChuckMcM 13y ago
This is one of the fascinating things I think folks born in the 90's are really going to regret. So much of what they say and opine about has become embalmed in the amber that is the Internet that as time passes and looking back reveals how little they knew in spite of their ardor to the contrary is going to start haunting them and become a modern albatross[1]. When I think about the some of the really silly things I believed when I was in college to be absolute truths, only to find in the passage of time they were simply projections of my dreams and fears on to the events of my day. It seems to me there is a particularly vulnerable group there in the middle somewhere, too early to recognize what things like Google would do to data retention, but late enough that their thoughts and views made it into those archives. Ouch. According to his LinkedIn page[2] Matthew Lynn has continued to be fairly successful as a strategist so perhaps for him it is a non-issue. [1] http://en.wikipedia.org/wiki/Albatross_(metaphor) http://en.wikipedia.org/wiki/Albatross_(metaphor) [2] http://www.linkedin.com/profile/view?id=3770629&authType=NAME_SEARCH&authToken=z62X&locale=en_US http://www.linkedin.com/profile/view?id=3770629&authType=NAM...
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aneeskA 13y ago
He almost says the reason why it will be a hit (the-best-of-all-world!) "Instead of lugging around a phone for making calls, an MP3 player for listening to music, and a Blackberry for checking your e-mail, you can do all three on one device. Even better, you only need one charger." But failed to understand it!
quanticle 13y ago
As one of the people who fiercely defended Nokia on Hacker News when the iPhone launched, I'm entirely willing to say I was wrong here. I drastically underestimated how quickly Android powered smartphones would become cheap enough to eat into Nokia's marketshare and profits, and I totally overestimated Nokia's leadership's ability to pivot and deal with the situation.
- pavlov 13y ago
  I'm in the same boat. I believed that Nokia's market power would let them react quicker and outgun everyone else on price when necessary. I thought that Apple would treat the iPhone like the Mac, relegating it to a profitable high-end niche with 3-5% marketshare. Nokia was killed by their incompetence in software. Symbian was originally a lightweight OS designed for constrained devices... But somewhere along the way it got turned into a "worst of all worlds" operating system with enormous code bloat, useless desktop-style features and several half-hearted touch UI layers all rolled into one big ball of fail. It seemed like nobody at Nokia noticed this. I guess the middle managers were either afraid to pass the bad news up the chain, or more likely, they were totally clueless about the ongoing code gangrene.
dalek2point3 13y ago
I like the byline: (Matthew Lynn is a Bloomberg News columnist. The opinions expressed are his own.) How he wished this was different ...
__david__ 13y ago
Failed predictions are very humorous to read in hindsight. This one is up there with: No wireless. Less space than a nomad. Lame.
scrrr 13y ago
Another example that shows that humans are not very good at predicting the future.
atmosx 13y ago
Actually, I shouldn't blame the guy too much, except from the fact that he is getting paid to state opinions at Bloomberg, so he should be way more careful in the future. I was sure the iPhone would be disruptive and the 6 month-early presentation (if I recall correctly) was enough to show an interface that was like 30 years ahead of Symbian. That said, I was plain wrong on the iPad... It was way more disruptive than I initially thought. But to me, creating content is important, that's why a tablet would always lack something for me. But others apparently appreciate the intuitive interface and ease of use in every day life.
- pjmlp 13y ago
  Except Symbian had a touch screen UI in the form of Nokia 7710 a few years before the iPhone, but Nokia killed it shortly after releasing it.
  - pavlov 13y ago
    Nokia wasn't the first. There were Symbian touchscreen phones with a full-size display as early as 2000: http://www.gsmarena.com/ericsson_r380-195.php http://www.gsmarena.com/ericsson_r380-195.php The Sony Ericsson P800 is probably the best-remembered in this category. (I think I read somewhere that Steve Jobs once mentioned the P800 as an inspiration for the iPhone -- basically he told his staff: "Let's do this kind of device, but better.") Anyway, the Symbian touchscreen devices were more like Pocket PCs than iPhones. They didn't really manage to break out of the desktop UI mold. Apple was the first with capacitive multitouch. They also invented the modern mobile web browsing experience, where the window size is separated from the viewport and you can zoom/pan around with realtime feedback. This seems obvious now, but think back to what it was like to use the mobile web in 2006...
    - pjmlp 13y ago
      Yep, I forgot about Sony devices. I used the mobile web since the early GPRS days. Remember WML? Although they lacked capacitive multitouch, Symbian devices before 2006 already had zoom capabilities. My N70 could already zoom in for content, if I remember correctly.
Kesty 13y ago
As much as people like to bash everyone who said in 2007 that the iPhone was nothing more than an expensive toy has to remember that the iPhone didn't have an application store (other than the jailbreak version) until July 2008. And without the app store it was a great pice of engineering but if you didn't saw a jailbreaked version it was a big phone (for the time) where you can play music, watch videos and go to a completely non mobile friendly web with a crappy browser. Add to that how expensive it was compared to other phones how low the battery lasted and how fragile it was you can see why not everyone was that impressed. It's too easy to say 7 years later, look at this fool he was wrong.
avaku 13y ago
It's easy for us to judge now. But if you read this article when it came out, you wouldn't be so sure. This is the reason why not many analysts publish reports that are contrary to "common" opinion. Because if everyone is wrong, then it's fine, but if it's just that analyst - that's not good for them. We should appreciate that this analyst tried to have a critical point of view.
LeicaLatte 13y ago
Of course no one saw it coming. Especially the media. But "Will Fail"? Please. That stands as a terrible headline, no matter what.
cdooh 13y ago
"The mobile-phone industry is becoming a cozy cartel between the network operators and a limited range of manufacturers. It could certainly use a fresh blast of competition from an industry outsider." This statement is still true unforunately despite what ever else the article says
curiouslearn 13y ago
Thanks for sharing. This is an awesome read!
jawaddeo 13y ago
With hindsight it's almost funny how the author has managed to write this nonsense with such self-assured tone, but at the time this view was quite prevalent. Working at the time for Symbian, I remember meetings where Apple were openly mocked by senior managers and technical leaders. The only competition that mattered was from Microsoft and Android. The iPhone it was believed, would never be sold beyond the niche high-end market. The most silly, almost insincere, part of these beliefs was the fact that one could walk down the street from our offices and pick up an iPhone at a price fractionally higher than an average Symbian phone (with a contract of course). There were many other reasons for the demise of Symbian as a platform (the leadership was naïve, but had the most inflated egos in the whole of industry due to their earlier success in 'scoring' Nokia), but the bottom line was that they had no idea what consumers wanted. Boring old men still nostalgically carrying their Psion 5s, whom I respected then and respect now for their technical expertise, but not for their business or even technological vision. A small minority that I was part of tried quite hard to convince our peers that Apple were a serious threat. Everyone laughed at us, we were called Apple fanboys and were never taken seriously. I left soon after in a state of disillusion, but had to watch from the sidelines one of the most promising British 'startups' disintegrate into absolute irrelevance. The managers who ran this company into ground when it was the only one in leadership of that industry should hang their heads in shame. Nothing to take away from great designers at Apple and from the leadership of Steve Jobs, Apple owe a lot to the incompetence of Symbian leadership.

123 points by JoeCortopassi 13y ago

asharpe 13y ago

Wow - how could they be so wrong. I especially like the incumbents: Nokia and Motorala ... where are they now?

D9u 13y ago
You took the words right out of my fingers! It just goes to show how accurate and prescient many "news" organizations really are.
- VintageCool 13y ago
  Not to mention those IT Research firms like Forrester and Gartner that put their finger to the wind and try to guess which way the wind will blow, then announce it the trade magazines.
- haukilup 13y ago
  This is an opinion piece by one writer. You may have a valid point, but this article doesn't support your claim whatsoever.
  - SG- 13y ago
    It wasn't just one writer or person in the industry saying this at the time. I'm not sure why this article got posted here today, but I think it's likely to make us reflect at how terrible some of these analysts and firms are even today.
- asharpe 13y ago
  I actually worked at Bloomberg when this article came out (in product). While he was writing this in the news organisation, we were busy providing one of the launch apps for the iPhone under strict confidentiality. Also, 5 of my colleagues queued up for hours to buy them on the first day ... one actually bought two - one to keep as a collectors' item.
WoodenChair 13y ago
It's not a "they", it's a "he". This is one dude's perspective who obviously lacked some vision. Most people who played with the iPhone when it came out knew it was going to be huge. It was just so much better than anything on the market. My guess is the writer had a bit of an anti-Apple bias based on the tone of his early paragraphs.
- Retric 13y ago
  This is not a blog post, there was far more than one person behind this article. Which is why ignoring the browser and only saying "as well as having wireless Internet access for e-mail" vs "as well as having wireless Internet access for e-mail and web browsing" was a huge mistake. About the January 9th demo: It worked fine if you sent an e-mail and then surfed the Web. http://gizmodo.com/the-iphones-first-demo-was-buggy-as-hell-1441324523 http://gizmodo.com/the-iphones-first-demo-was-buggy-as-hell-... Note gizmodo is talking about the actual devices the demo worked fine but at the time it was far from being ready to be released.
Navarr 13y ago
Motorola just finished launching their what appears to be fairly successful Motorola X and G lines under the Google name (after being purchased by Google) and is being sold to Lenovo. Motorola is making the best phone I've used to date. Nokia is making amazing camera phones with Microsoft. In my world it's "where is apple now?" None of my coworkers were super pumped about the new iPhone. Before they left the company they were pumped about iOS 7 but just barely ("thank god they got rid of skeumorphism"). To me, despite how wrong this article was, the headline itself looks like it'll be coming true. Apple has been playing defense these last two or three years. Immense props for their initial creation, but the movement it spawned will end up much more wildly successful than Apple will. And the iPhone will fail in a late, defensive move.
- SG- 13y ago
  I haven't seen the new moto phone anywhere myself or heard it make any news other than Verge type site reviews, so what does "fairly" successful mean? Nokia isn't making anything amazing these days, i suppose they are making the phone with the highest megapixels and phoney ads pretending it was shot on the phone.
  - Gigablah 13y ago
    > Nokia isn't making anything amazing these days Uh, what? I ditched my Nokia a while ago (I hated the ecosystem) but the Nokia Windows phones are undeniably rock solid hardware.
    - SG- 13y ago
      I'm not saying the Nokia Windows phones are good or bad, but they aren't amazing and rocking the market right now. But your comment brings up another point, it's not just about the hardware these days like it used to be for phones, software is just as important.
- Nashhhh 13y ago
  Exactly! When I saw the headline, that is what I thought it would be about: how apple has been playing defense and is destroying itself. They have been innovation free since the iphone 4 and it shows. Unfortunately, they made the wrong call on screen size and it's taken them 4 years to catch up. They also really need to drop this one-model-per-year schedule. Competition is too strong now. They need to release their BS "s" models midyear.

krisgee 13y ago

>The mobile-phone industry is becoming a cozy cartel between the network operators and a limited range of manufacturers. It could certainly use a fresh blast of competition from an industry outsider. HA! Yeah that really worked out eh?

IBM 13y ago
It certainly did but only for Apple. Everyone else doesn't have the market position to make the same demands on carriers.
- adventured 13y ago
  Has worked out extraordinarily well for Samsung. They're making $30 billion a year in profit now, a drastic increase from five years ago. They have as much clout as Apple does these days, if not more given their position in manufacturing components.

coreymgilmore 13y ago

Apple stock when this came out: ~$94.00. Gains to date: ~456%. Doesn't look to bad to me! Now lets look at the cash hoard Apple has: it is enough to buy Nokia and Motorola numerous times over. Now if only the author of the article would have written about 'apps'. Would he have labeled them as niche as well? I would have loved to see an argument in 2007 for the multi-billion valuation developers are getting now.

craigc 13y ago
When the iPhone first came out there were no native apps. Only web apps. There is no way people would be making this much money if Apple hadn't opened up the platform.
- arrrg 13y ago
  In fact, I seem to remember that people were pretty much immediately complaining that there was no (official) way to bring third party apps to the iPhone (except for web apps). If I remember this was also a major criticism: Some other phones at the time could install third party software, the iPhone could not. However, despite the ability of installing third party apps existing in many phones, that never really took off before the iPhone SDK came out. (Also, the iPhone did have a relatively slow start. It sold well and along with what Apple was publicly stating as its goal, but it took a generation before the phone really did take off like a rocket.)
  - abruzzi 13y ago
    I've heard some claims recently (perhaps true) that Jobs didn't want third party apps, but at the time the interface was so obviously suited for apps that I assumed that they simply hadn't had time to put together what was needed for third parties to build apps. At the time they talked about web apps, but it felt like stalling, then a year later the app store launches.
    - Nashhhh 13y ago
      It's true (apple fanboy here, I remember it well). He was adamantly against them. If you look around, he did a whole keynote where he tried to present web apps as just as good as native apps-- it was ridiculous. He'd been dead wrong before as well: just a few years before the iphone, when people wanted to see an ipod with video capability, he said nobody would ever want to watch video on a mobile device. It really bugs me that apple makes these "nobody would ever want" proclamations and then reverses itself without saying, "we goofed". The next one coming is 5+ inch screens for the iphone. They'll make no mention of the fact that they criticized large screen phones before ("look, my thumb goes from corner to corner!"). Oh well.

discordance 13y ago

I'm curious as to why this doesn't affect the credibility of the writers that publish this sort of garbage? Matthew Lynn, the author, has continued on over the years to publish stories for the WSJ and HuffPost.

qq66 13y ago
Credibility or marketability? The publications only want pageviews. Articles like these get them, whether they end up being right or wrong.
dear 13y ago
The general public has short memory. The 'analysis industry' take advantage of that.
drawkbox 13y ago
At the time they may have been right, but the truth involves a time element. At closer look, it shows how immensely popular and desired what Apple was bringing to market was to overcome opinions like that. Back then that was the reality. I think when you go back and look at changes, many time it focuses on mainstream people who were wrong. But it was really everyone in the industry was wrong at that time, and shows how amazingly time and innovation through research and development can unseat the current reality. I know I realized how big it was the moment I read OpenGL ES and the announcement of the SDK at the Keynote in that it was a new handheld gaming market. However I thought it would be a smaller market like the current social/casual game market at the time. It turned into engulf and change the entire thing and has the biggest player population of all now while putting the other companies in defensive positions (Nintendo/Sony/Microsoft).
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djur 13y ago
Do you expect to get fired from your job if you make a single wrong decision or prediction? I can't speak to this particular writer but a lot of very intelligent, insightful people have been very wrong about important things and still managed to maintain their credibility by being right about other things (and for being wrong for credible reasons). The big thing that helped the iPhone take off, the App Store, wasn't out yet. Things changed rapidly.

keeptrying 13y ago

Great Quote: "Don't let that fool you into thinking that it matters. The big competitors in the mobile-phone industry such as Nokia Oyj and Motorola Inc. won't be whispering nervously into their clamshells over a new threat to their business." Nokia and Motorola and clamshells ... :)

outside1234 13y ago

What he didn't foresee then was the app store (it hadn't been invented yet). That is really what changed everything.

t1m 13y ago
Well, the iTunes store came online in 2003. Not much of a stretch to foresee a marketplace for apps much like the marketplace for music. Whether it would be successful or not is another thing.
- fvrghl 13y ago
  I disagree; apps were never a guarantee. Steve was adamant about not having 3rd party apps on the iPhone for a long time. However, with 20/20 hindsight it's easy to see.
  - guywithabike 13y ago
    Steve was also adamant about not doing a phone in the first place, not doing a tablet, etc. The point being that Steve always publicly denied wanting to do something that privately he was already investing significant resources in doing.
    - bluthru 13y ago
      From what I've read it's much simpler than that. Steve would argue passionately for both sides of an issue before reaching a conclusion.
  - megablast 13y ago
    Despite Steve, there was already apps on the iPhone 1.
- bduerst 13y ago
  If you had said "App" in 2007, nobody would have even known what you were talking about. http://www.google.com/trends/explore#q=apps%2C%20mobile%20apps&cmpt=q http://www.google.com/trends/explore#q=apps%2C%20mobile%20ap...

NaOH 13y ago

It's easy to say this writer and those cited in the article were wrong. More broadly, reading this reminds me of an Economist article from a couple years ago discussing how Fuji and Kodak took different paths when digital cameras took off, and the choices made then led to the companies' positions today (one defunct, one doing well). What I took from that Economist piece wasn't just the history lesson, but the reminder that what looks wise in the near term (what Kodak did) isn't necessarily best in the long term, and vice versa. In fact, Kodak likely sowed the seeds of its demise when they took the lead position in the digital camera space. So re-reading this iPhone piece merely reminds me how difficult it is to prognosticate, and that’s an important lesson for those of us in guiding roles, both personally or professionally. http://www.economist.com/node/21542796 http://www.economist.com/node/21542796

babesh 13y ago
True but I bet some people are better at predicting than others. Would be interesting to collect and analyze peoples predictions. Example stock market.
3327 13y ago
Correct easy to point the finger after the fact however this is not a one of case, specially of now it all wallstreet firms and analysts. The source evades me but there have been more than one bloomberg articles brushing of a new technology as a small stint and "fan club". And i think it is fair to rub it into the faces of firms like bloomberg and economist whom have a "mater of fact" stance/tone.
cclogg 13y ago
P.s. speaking of Kodak, I give them +1 for still producing film stock (and continually improving it!).
- lostlogin 13y ago
  I give them -10 for their medical imaging equipment. Its god awful. They sold it off, but the invention of it just kills me. Try logging in with a long password on a software keyboard when the touch targets and display image are off. http://www.blockimaging.com/items/kodak-directview-cr-825-cr-14825/kodak-carestream-cr-825-2 http://www.blockimaging.com/items/kodak-directview-cr-825-cr...

dbroockman 13y ago

The author subsequently scored a gig at the WSJ with multiple columns.[1] Funny how the ability to accurately comment on industry is not a useful qualification for being employed to comment on industry. :) (Written somewhat tongue-in-cheek obviously, I'm sure he has gotten lucky before with predictions before too.) [1] https://twitter.com/mattlynnwriter https://twitter.com/mattlynnwriter

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kin 13y ago

I remember this time. I, like many others, hated the iPhone. The app store was young. There was no basic functionalities like copy & paste. There was no multi-tasking between apps. You only had the option of one carrier (AT&T). The list goes on. I stuck with the Blackberry. Then, Apple executed. It delivered on hardware, and the app store blew up.

ekianjo 13y ago
Multi-tasking is still not really working like real multi-tasking works usually.
mark_integerdsv 13y ago
I never understood you guys. Blackberry had no apps so interoperability and copy and paste barely had any use cases. The other smart phones of the day were Windows powered bricks like the i-Mate line which were so dog slow,and hideously unreliable that frankly I might as well not have had a phone for the two years I used a K-Jam. iPhone came on the scene and it was like for the first time it made sense to lug around a larger device. Best iPod ever on that thing. Big screen for videos, real browser and everything it did do worked. Not like the Windows phones which had tech spec as long as your arm but crashed if you tried to perform a most if the functions. Seriously, I remember having to remove the battery to reboot my device after simply trying to connect via Bluetooth to a samsung flip phone. I didn't care if the iPhone couldn't do that because I knew that the others couldn't even if they said they could. Caveat: I'm from South Africa and we never got the Palm phones this side.
- easong 13y ago
  I was a big iPhone hater at the time. Still kind of am. 1. It was really, really expensive when it first came out - there was a several hundred dollar price drop before it really took off, IIRC. 2. I had a windows mobile (HTC TyTN II) which was actually sweet. 2a. The slideout keyboard was way more accurate than the software keyboard on the iPhone, and Apple hadn't entirely figured out autocomplete (I think their keyboard is still poor compared to swipe etc, tbh). 2b. It was durable - it never died after being thrown off stairs, slammed on the ground, crushed in backpacks, stepped on, getting dropped in a river, etc etc. Towards the end of its lifepan, when I wanted to get an Android phone, I found that I couldn't easily kill it even if I tried. On the other hand, my friend shattered their iPhone by bumping their pocket into the corner of a table. 2c. 3g, and ATT only. 2g is basically unusable for browsing the desktop web, and ATT sucks. 2d. Anybody could, and many people did, publish whatever apps you wanted. I was able to download a full offline database of German public transit schedules and navigate flawlessly in cities I had never been to (which was a big deal), SSH into servers in emergencies (using the aforementioned full-size keyboard), full offline GPS of the continental US (something that's difficult to come by even today!) and so on and so on. The iPhone on launch was basically an expensive consumer toy, had no allowances for third-party developers, and Steve was telling everyone that they were better off without them. In an expansion of my last point, myself (and a lot of other people) didn't so much think that the iPhone was going to fail as dread its success. The iPhone, and really Apple, represent and drive the trend of consumerization and broader locking down of computing. And I think that we were right to do so - the broader population largely thinks of their handheld general-purpose computers as texting and passive content consumption devices, because that's all they're allowed to be. And that's sad.

nulagrithom 13y ago

I love that this article wasn't just wrong, it was _spectacularly_ wrong. I remember thinking many of these same things at the time. This especially would've rung true: Will your accounts department stump up for a fancy new handset just so you can listen to Eminem on your way to a business meeting? At the time? Of course not! Today? Standard equipment.

downandout 13y ago

The best quote in the article: "The iPhone will not substantially alter the fundamental structure and challenges of the mobile industry," Charles Golvin, an analyst at Forrester Research Inc., said in a report this month. There are three reasons that Apple is unlikely to make much of an impact on this market -- and why it is too early to start dumping your Nokia shares. This is comedy gold, but is also a good reality check about the mainstream news we read today. Not all predictions made by supposed experts will be accurate.

morcheeba 13y ago
This was one of the easiest things they could have gotten right. A phone you buy from the manufacturer instead of the carrier? That was revolutionary ... Verizon sold gimped versions of the RAZR and then charged you a monthly fee to ungimp them!
- tricolon 13y ago
  That wasn't the only factor; all my Nokia phones I purchased from Nokia directly.
  - runn1ng 13y ago
    This. In Europe, carrier and manufacturer were decoupled for some time before iPhone, so it was not revolutionary in that regard.
    - crwll 13y ago
      Were they actually generally ever coupled in Europe in the first place? In Finland they weren't.
burritofanatic 13y ago
And I bet Charles Golvin now has an iPhone, probably two of them.
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markb139 13y ago

I worked (contracted) in the Nokia world at this time. The big game changer the iPhone bought and I think was missed by Nokia and others was the inclusive and easy to use data. In the uk data on phones was very expensive and in some cases you had to configure the apn yourself. iPhone changed all that virtually overnight

poopsintub 13y ago

I read similar articles when the Z10 by Blackberry was being release a year or so ago. You had opinions of flops/world domination swinging both ways.

ChuckMcM 13y ago

This is one of the fascinating things I think folks born in the 90's are really going to regret. So much of what they say and opine about has become embalmed in the amber that is the Internet that as time passes and looking back reveals how little they knew in spite of their ardor to the contrary is going to start haunting them and become a modern albatross[1]. When I think about the some of the really silly things I believed when I was in college to be absolute truths, only to find in the passage of time they were simply projections of my dreams and fears on to the events of my day. It seems to me there is a particularly vulnerable group there in the middle somewhere, too early to recognize what things like Google would do to data retention, but late enough that their thoughts and views made it into those archives. Ouch. According to his LinkedIn page[2] Matthew Lynn has continued to be fairly successful as a strategist so perhaps for him it is a non-issue. [1] http://en.wikipedia.org/wiki/Albatross_(metaphor) http://en.wikipedia.org/wiki/Albatross_(metaphor) [2] http://www.linkedin.com/profile/view?id=3770629&authType=NAME_SEARCH&authToken=z62X&locale=en_US http://www.linkedin.com/profile/view?id=3770629&authType=NAM...

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aneeskA 13y ago

He almost says the reason why it will be a hit (the-best-of-all-world!) "Instead of lugging around a phone for making calls, an MP3 player for listening to music, and a Blackberry for checking your e-mail, you can do all three on one device. Even better, you only need one charger." But failed to understand it!

quanticle 13y ago

As one of the people who fiercely defended Nokia on Hacker News when the iPhone launched, I'm entirely willing to say I was wrong here. I drastically underestimated how quickly Android powered smartphones would become cheap enough to eat into Nokia's marketshare and profits, and I totally overestimated Nokia's leadership's ability to pivot and deal with the situation.

pavlov 13y ago
I'm in the same boat. I believed that Nokia's market power would let them react quicker and outgun everyone else on price when necessary. I thought that Apple would treat the iPhone like the Mac, relegating it to a profitable high-end niche with 3-5% marketshare. Nokia was killed by their incompetence in software. Symbian was originally a lightweight OS designed for constrained devices... But somewhere along the way it got turned into a "worst of all worlds" operating system with enormous code bloat, useless desktop-style features and several half-hearted touch UI layers all rolled into one big ball of fail. It seemed like nobody at Nokia noticed this. I guess the middle managers were either afraid to pass the bad news up the chain, or more likely, they were totally clueless about the ongoing code gangrene.

dalek2point3 13y ago

I like the byline: (Matthew Lynn is a Bloomberg News columnist. The opinions expressed are his own.) How he wished this was different ...

__david__ 13y ago

Failed predictions are very humorous to read in hindsight. This one is up there with: No wireless. Less space than a nomad. Lame.

scrrr 13y ago

Another example that shows that humans are not very good at predicting the future.

atmosx 13y ago

Actually, I shouldn't blame the guy too much, except from the fact that he is getting paid to state opinions at Bloomberg, so he should be way more careful in the future. I was sure the iPhone would be disruptive and the 6 month-early presentation (if I recall correctly) was enough to show an interface that was like 30 years ahead of Symbian. That said, I was plain wrong on the iPad... It was way more disruptive than I initially thought. But to me, creating content is important, that's why a tablet would always lack something for me. But others apparently appreciate the intuitive interface and ease of use in every day life.

pjmlp 13y ago
Except Symbian had a touch screen UI in the form of Nokia 7710 a few years before the iPhone, but Nokia killed it shortly after releasing it.
- pavlov 13y ago
  Nokia wasn't the first. There were Symbian touchscreen phones with a full-size display as early as 2000: http://www.gsmarena.com/ericsson_r380-195.php http://www.gsmarena.com/ericsson_r380-195.php The Sony Ericsson P800 is probably the best-remembered in this category. (I think I read somewhere that Steve Jobs once mentioned the P800 as an inspiration for the iPhone -- basically he told his staff: "Let's do this kind of device, but better.") Anyway, the Symbian touchscreen devices were more like Pocket PCs than iPhones. They didn't really manage to break out of the desktop UI mold. Apple was the first with capacitive multitouch. They also invented the modern mobile web browsing experience, where the window size is separated from the viewport and you can zoom/pan around with realtime feedback. This seems obvious now, but think back to what it was like to use the mobile web in 2006...
  - pjmlp 13y ago
    Yep, I forgot about Sony devices. I used the mobile web since the early GPRS days. Remember WML? Although they lacked capacitive multitouch, Symbian devices before 2006 already had zoom capabilities. My N70 could already zoom in for content, if I remember correctly.

Kesty 13y ago

As much as people like to bash everyone who said in 2007 that the iPhone was nothing more than an expensive toy has to remember that the iPhone didn't have an application store (other than the jailbreak version) until July 2008. And without the app store it was a great pice of engineering but if you didn't saw a jailbreaked version it was a big phone (for the time) where you can play music, watch videos and go to a completely non mobile friendly web with a crappy browser. Add to that how expensive it was compared to other phones how low the battery lasted and how fragile it was you can see why not everyone was that impressed. It's too easy to say 7 years later, look at this fool he was wrong.

avaku 13y ago

It's easy for us to judge now. But if you read this article when it came out, you wouldn't be so sure. This is the reason why not many analysts publish reports that are contrary to "common" opinion. Because if everyone is wrong, then it's fine, but if it's just that analyst - that's not good for them. We should appreciate that this analyst tried to have a critical point of view.

LeicaLatte 13y ago

Of course no one saw it coming. Especially the media. But "Will Fail"? Please. That stands as a terrible headline, no matter what.

cdooh 13y ago

"The mobile-phone industry is becoming a cozy cartel between the network operators and a limited range of manufacturers. It could certainly use a fresh blast of competition from an industry outsider." This statement is still true unforunately despite what ever else the article says

curiouslearn 13y ago

Thanks for sharing. This is an awesome read!

jawaddeo 13y ago

With hindsight it's almost funny how the author has managed to write this nonsense with such self-assured tone, but at the time this view was quite prevalent. Working at the time for Symbian, I remember meetings where Apple were openly mocked by senior managers and technical leaders. The only competition that mattered was from Microsoft and Android. The iPhone it was believed, would never be sold beyond the niche high-end market. The most silly, almost insincere, part of these beliefs was the fact that one could walk down the street from our offices and pick up an iPhone at a price fractionally higher than an average Symbian phone (with a contract of course). There were many other reasons for the demise of Symbian as a platform (the leadership was naïve, but had the most inflated egos in the whole of industry due to their earlier success in 'scoring' Nokia), but the bottom line was that they had no idea what consumers wanted. Boring old men still nostalgically carrying their Psion 5s, whom I respected then and respect now for their technical expertise, but not for their business or even technological vision. A small minority that I was part of tried quite hard to convince our peers that Apple were a serious threat. Everyone laughed at us, we were called Apple fanboys and were never taken seriously. I left soon after in a state of disillusion, but had to watch from the sidelines one of the most promising British 'startups' disintegrate into absolute irrelevance. The managers who ran this company into ground when it was the only one in leadership of that industry should hang their heads in shame. Nothing to take away from great designers at Apple and from the leadership of Steve Jobs, Apple owe a lot to the incompetence of Symbian leadership.