I love armchair quarterbacks. Sorry, Jeffrey, I’m not predicting the absolute failure of Omnifone, but I really want to know what they bring to the market that is new. So far, they bring promises. That’s great, but every new electronic music venture has launched with great sounding promises. No, what they need is something compelling. Please tell me how asking customers to pay two to three times as much for music that they might already own, is a market winning strategy.

And so, by voicing and opinion, pro or can, all of us get to be armchair quarterbacks. From what I can read, what Omnifone brings to the market that is different is ‘ubiquity’ as mentioned before. Finally, there’s a music platform for the entire cell phone market of users, not just here and there at outrageous prices. That alone isn’t assurance of success, but it’s a start and much better than previous attempts by the carriers themselves.

Right now, there is already a very good way to load music onto your cell phone and it is much cheaper. It works like this: Take your Nokia, Motorola, Samsung or Sony-Ericsson phone and connect it to your computer. Transfer your existing mp3 files over. Unplug and enjoy. That is the easiest and simplest method for loading music onto your phone right now.

That’s not quite accurate. Some cell phones just don’t make it easy, plus, that’s a manual process which most users don’t bother to figure out. The iPod’s success is also based on iTunes which eliminates those manual steps. Create playlists, plug in iPod (eventually, iPhone) and sync. Easy. The cell phone companies haven’t figured that part out.

What does Omnifone bring to the table that is easier, cheaper and more efficient? Nothing that I can see. Everyone acts like consumers really want to buy their music over the phone networks, but the reality is that most phone networks are not getting as much traffic as they would like. Why is that? It’s because their services cost too much. Omnifone isn’t going to fix that. No, instead, they’re suggesting that you pay an additional $15-20 more per month in order to get a service that is already available to you for much cheaper. How is that a strategy for success? How is that “priced right”? With Apple or Rhapsody, I don’t have to pay any extra for the songs I’ve already purchased.

Good points, but the market makes the determination for success, not Apple, not the cell phone companies. I think the argument voiced originally isn’t that Omnifone will be any easier, it will be ubiquitous—cell phone users may not have to ante up for Apple’s expensive phone, when they can get some music, all music, for a flat fee. It’s a bullet point, but it could be more than attractive to even a small percentage of the billions of cell phone users that Apple won’t have as customers.

And sorry, Danny Boy, your Mac vs. DOS vs. Windows does not apply here. When the Mac was launched, Apple did not have a majority of the market, DOS did. The Mac was prohibitively expensive compared to several other solutions out there. In fact, the only thing the Mac had going for it was elegance and ease of use based on a metaphorical approach. In this market, iTunes is the new DOS. It’s not the best service out there, but it’s good enough. Is it elegant? Yes, but it’s not the most full-featured service. Is it easy to use, yes, much more than most of its competitors. And the iPod, iTunes, iPhone platform has one other thing going for it that didn’t exist back then, popular mindshare. The Mac was neat, but the average person in 1984 was not in the market for a computer, especially not one at the prices Apple was asking. But iPods are ubiquitous these days, not just in real life, but in popular culture. That is something that did not exist in 1984.

Stop it already. The Mac vs. DOS vs Windows argument fully applies in context (which you missed). The context had to do with Mac being better, easier, etc., but DOS and later Windows commanded the market share, though the product wasn’t a good. “iTunes is the new DOS?“ I think not. That’s laughable. DOS was hated. iTunes is loved. DOS was impossible for average users to figure out. iTunes is simple enough for Windows users.

In fact, the entire market is simply too different. There is no real grounds for your comparison between the existing online music market today and the computer market in 1984-1995.

I think that’s what was being said. Apple blew it and Microsoft won back in the 1980s, then with Windows ‘95 nearly quashed Apple. Today, Apple owns the portable music player market, flash-based and hard drive, and is trying to enter the cell phone market which is both consumer and business. To say Apple will succeed in cell phones because they succeeded in music players is the same silly argument as saying they’ll fail in music because they failed in computers.

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I can tell you why most of my friends didn’t have a lot of music on their music capable phones. That’s because the networks tried to dictate how they could put their music on, usually involving paying a second time. I knew several people that were willing to pay for a new ringtone, but most were not willing to pay for music they already owned. Most of them had both cell phones and mp3 players for that very reason. (Or they had Sony-Ericsson phones, which offer a very good music experience without even needing MusicStation.) MusicStation does not change that.

If Sony-Ericsson does OK by music, then why not other phones and carriers? If MusicStation brings a common format, and other carriers and cell phones adopt it (which many have already agreed to do), then why is that not a better recipe for success?

Will MusicStation fail? Probably not. Just as Rhapsody has not failed, and the whole Plays4Sure ecosystem has not failed. But will it be a huge success? The picture doesn’t look as good as the marketing hype from my perspective. I know that I would never use MusicStation. And I don’t even own an iPod. I have a Treo. I alredy have a free way to load my already purchase music on my phone, thank you very much.

If MusicStation/Omnifone doesn’t fail, then it probably succeeds, even if nominally, which is the original argument. You’re totally wrong about Rhapsody and PlaysForSure. Both are big failures when compared to Apple’s iTunes Store, iTunes, iPod trio—both marketshare and profits. Even Microsoft dumped PlaysForSure.

BTW - the picture never looks as good as the marketing hype, so Apple’s so-called rosy future in cell phones, so far, is mostly marketing hype.

Time will tell. Since we get to be armchair quarterbacks, this #11 (from high school), says Omnifone/MusicStation will do better than all others to date, and iPhone will not have 1/10th the success of the iPod in market share.

Benny Logan - 17 February 2007 03:12 PM

Time will tell. Since we get to be armchair quarterbacks, this #11 (from high school), says Omnifone/MusicStation will do better than all others to date, and iPhone will not have 1/10th the success of the iPod in market share.

I love ‘lies, damned lies, and statistics.‘ And PowerPoint. I agree that Omnifone MusicStation whatever it is, will probably do better than all others today, and as I said, could well topple Apple’s dominance and do better with cell phones that play music. Now, as to the prediction that the “iPhone will not have 1/10th the success of the iPod in market share“, I will agree with you.

Hmmm. Let’s see. The iPod’s market share is around 70% or so, so 1/10th of that would be 7% and Apple is only targeting 1% by the end of 2008, so that’s a safe bet to make. Based on that prediction, if the iPhone did 5% of the market, 5 times Apple’s ambitious target, it would still be a failure.

I love numbers.

Jeffrey Mincey - 17 February 2007 03:39 PM

Benny Logan - 17 February 2007 03:12 PM

Time will tell. Since we get to be armchair quarterbacks, this #11 (from high school), says Omnifone/MusicStation will do better than all others to date, and iPhone will not have 1/10th the success of the iPod in market share.

I love ‘lies, damned lies, and statistics.‘ And PowerPoint. I agree that Omnifone MusicStation whatever it is, will probably do better than all others today, and as I said, could well topple Apple’s dominance and do better with cell phones that play music. Now, as to the prediction that the “iPhone will not have 1/10th the success of the iPod in market share“, I will agree with you.

Hmmm. Let’s see. The iPod’s market share is around 70% or so, so 1/10th of that would be 7% and Apple is only targeting 1% by the end of 2008, so that’s a safe bet to make. Based on that prediction, if the iPhone did 5% of the market, 5 times Apple’s ambitious target, it would still be a failure.

I love numbers.

If Apple did 5% of the cell phone market by 2008 as you suggest, that would be a little under 50 million iPhones, more than half of the total number of iPods Apple has sold (approx. 89 million to date), and would put it in a tie with Sony Ericsson in the mobile phone maker rankings, all in it’s first year as a phone maker.

One other variable to toss into the mix is the iPhone is not a cell phone. It’s not even just a cell phone, video iPod, and Internet Communicator. It’s far more than all of that combined. It’s going to be all the functionality + the ease of use + the X factor that Apple understands so well. The WOW factor.

The first generation iPhone is going to have some limitations. But by the 3rd or 4th, it’s going to be killer. Especially if it’s compatible with all the major carriers. What could ruin it is the other costs - the plans - being perceived as low value for the $. No one I know uses the internet features of their phones because they are screwed royally by the cell phone companies for everything they do.

Since Apple is not in control of this VERY IMPORTANT chunk of the pie, it makes me nervous and conservative about its 1st or 2nd year success. If Apple was able to hammer out some good deals that bring ample talk time and usage for reasonable fees, then the iPhone should take off like the iPods.

Look how passionate and excited everyone is just from seeing a demo. Wait till we get these things in our hands and try them out.

One word: Upgrade.

Many iPod users have purchased multiple iPods as new features have come to the line. If we look at the iPhone as an extension of the iPod line, where the phone and other new capabilities are added features that work with the existing iPod docking connectors, we are looking at a huge market ready to go.

Add to that the fact that #2 in the online music market is fine, but it is a far distant second, and people who have been using the iTunes Store for downloads will want a smart phone that can handle those downloads, without the additional steps of circumventing the DRM. You can sell all the DRM-free music you want from the #2 position and throw in a phone that will handle it, but you still won’t have a phone that will handle what people already own. DRM systems stink, it’s true, but they are serving Apple well right now, and entries that can’t compete with Apple’s products capable of playing DRMed content are just not going to work for the people who want it.

Finally, we need to look at the strong growth Apple is seeing in the computer market, most notably the laptop scene (the fastest growing sector), where Apple’s growth is staying signioficantly ahead of overall growth. Throw the iPhone in the mix and let a few non-Mac people play with the Mac OS UI, and we will see even more growth in computer sales, a sort of sympathetic halo effect.

I have no doubt that a serious competitor has arrived, but I am far from convinced that it is a threat to Apple’s hegemony in the digital content arena or a threat to the growth of the iPhone. As with anything in the cell phone market, much of the success will rely upon the timing of upgrades. Two-year contracts typically allow for hardware upgrades after one year, provided the customer signs a new two-year deal. The consumer side has already demonstrated, by purchasing iPods in staggering numbers, that it is willing to pay a premium for ease of use and for the Cool Factor. Can Omnifone really compete in these areas? Go ahead: ask a teen or twenty-something.