Game Changer?

Feedback from the iPhone weekend that was...

For the functionality it can control, the iPhone gets rave (stunning is probably a better term) reviews from Scoble and Tim Bajarian. Even though it was only announced 6 months ago, in an interview Steve Jobs said they had been thinking about a mobile device for 3 years. Clearly, thought a lot. The numbers sold exceeded even the high launch expectations. The NY Times says even Asian markets which have a multi-year lead over the US in mobile functionality and deployment are taking notice.

But for the pricing it could also control, Apple has taken a significant gamble. As the NY Times article says the average US consumer has paid an average of $ 50 for their mobile device. Pricing it at 10 to 12X, will only allow it to grab 1-2% of the high-end of the global market by end of next year. In markets outside the US, as Sharad Sharma points out consumers are even more price sensitive. And vendors like Nokia and Samsung have huge installed bases. An initial teardown suggests Apple used plenty of shared iPod components. Not sure if AT&T is subsidizing the device much - as has been common in the US market to get a commitment for a 2 year contract.

For the AT&T network it cannot control, Guy Kawasaki and Paul Kedrosky summarize the negative sentiment. I just do not get AT&T. Just today it announced free WI-FI hotspot access to its broadband customers. But nothing similar for the iPhone plan in spite of its clear dependence on WI-FI till the 3G network matures. And in a USA Today interview, AT&T CEO Randall Stephenson hopes the iPhone "doesn't change (AT&T) too much"

Yes, Apple has raised the bar for devices - at the premium end of the market. The question is can it  become more mainstream? And it will raise the bar for quality and cost of our mobile networks. So, AT&T while winning the market share battle on the back of the iPhone, may lose the long term war if it "doesn't change too much". As competitors showcase their own speedier networks, and customers understand all the extra costs - texting, hotspot, roaming, others - that do not come with the 2 year deal they signed up for.

Game changer, for sure. But in some ways Apple or AT&T have not necessarily thought about.

Update: GigaOm points to some iPhone users who are already turning off AT&T