Letters To The Editor For July 2007

June 7, 2007
Apple debate wages on.

Re "Apple Inc.: Strategic Misstep, Or Supreme Confidence?" May 17, 2007.

Just read your article about Apple Inc.'s "strategic misstep." You seem to feel that Apple, and in particular Steve Jobs, announced the iPhone too early.

It might be that you missed the part of Mr. Jobs' keynote where he mentioned that he was announcing it because it was being submitted for FCC approval.

Once submitted, the information about the iPhone would become public domain.

In order to retain his thunder, Mr. Jobs announced it early rather than have someone discover it through the FCC and release details as well as speculate and invent imaginary features (either included or excluded).

Apple did what it did to remain in control of the situation, rather than being controlled.

Keith McQueen
senior software engineer
Technology Service Corp.
Colorado Springs, Colo.

There is one issue that I believe Apple understood very well -- most of their potential market is currently under a mobile contract.

What the keynote presentation of the iPhone did, in effect, was to provide time for the potential market to develop. For the group on a one-year contract this means that about 50% will be clear of their contract and "available" to buy an iPhone. For the group under a two-year contract you get about 25% build up by product launch and that doubles by the time the holiday buying season rolls around in November and December.

For me, the goal of Steve Jobs' keynote was getting the potential consumer to wait until the iPhone was out before signing a new contract. He did a very good selling job in that area. It also appears that he has influenced some potential iPod buyers to wait, but considering the margins on the iPhone, I doubt if Steve is too upset with the interim reduction in iPod sales.

So in the end, Apple wasn't worried about the iPhone becoming public knowledge when the FCC application was made. They are focused on expiring contracts and getting potential customers to wait before renewing or buying an iPhone. It's a subtle factor, but critical for Apple over the next 18 months.

Ken McLaughlin
retired consultant

Editor's Note: To read Associate Editor Brad Kenney's response to the feedback on his "Apple Inc.: Strategic Misstep, Or Supreme Confidence?" article, please visit: My Leadership Insight: Not So Insightful?

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