iPhone follow-up
Posted by Frugal on January 24th, 2007
Read a couple of negative articles recently on iPhone. Tim Cook commented that Cisco’s suit is “silly”:
On the earnings conference call, Apple Chief Operating Officer Tim Cook said Cisco’s suit is “silly” and that ‘we’re confident we’ll prevail” in the matter.
Now, I don’t know who is silly here. In the USA, the trademark laws are very well-defined. I think Apple has really gotten over its head and being too arrogant. Initially, I thought Apple will simply pay some money to acquire iPhone trademark. Looks like it’s not going to happen. Besides, such unfriendly attitude is simply bad for business, if not now, maybe in the future. Such action and comment are always unwise.
Not only Cisco, Apple has probably pissed off Microsoft, and has never been friendly towards its chip suppliers. Arrogance is never good.
Besides all those, the most negative “news” is that such touch screen phone has already existed in Europe by a company called Neonode. I don’t think every one of those 200+ patents will hold, especially given a precedent existing product. In fact, the easiest way to defeat iPhone is to make very similar products but much cheaper, but let the patent lawsuits dragged for years, which may or may not uphold anyway. Similar scheme has happened in the DVD market. Apex came out with very cheap DVD, and simply kept selling and selling, and let the lawsuits dragged. After all, a corporate bankruptcy does not equal to a personal bankruptcy of the executives.
Consumers will obviously benefit from such price competitions. Monopoly is never good.
I think Apple will still retain its appeal to consumers. Normal consumers will not care about anything above. As long as they will pay up and buy Apple’s products, then Apple can keep milking money.
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January 27th, 2007 at 6:09 am
You think Apple has a monopoly? Maybe on innovation… but thats because everyones think “lets just copy something cheaper” rather than tries to come up with good products.
the amazing thing is, apple can innovate and still not charge much for its products. (If you think the iPhone or a Mac is cheap, you aren’t familiar with the market, you’re going on the commony myth that apple is “overpriced” put forth by people who prefer to buy ell cheapo knocoffs that don’t have the same features or build quality.)
If you wanna make a million by 33, the best book you could read is “Economics in one lesson” by henry hazlitt– its not an investing book, but I wouldn’t invest without understanding the material presented there….
January 27th, 2007 at 12:03 pm
Ok, I’ve read your website and have a better idea of where you’re comming from now.
I think you’ve got a couple misconceptions. Apple has good relations with its chip suppliers, not sure where you get the idea that they don’t. As I said earlier, Apple owns the trademark to iPhone just as much as Cisco does– eg they registered it a long time ago and have been using it as much as Cisco. There are other products in the US and in Canada that use the term.
Apple pissed of microsoft? I’m not sure why specifically- except that they are actually competing with microsoft, where as before they were not. I suspect you don’t realize it, but Microsoft is not even the number 2 OS provider for phones— Number 2 is Linux. Number one is Symbian. MS is 3rd, but only recently because they have overtaken Palm.
Apple is not an arrogant company. If you do business with them, you find them to be a company that cares very much about quality and design, and usually holds the customer in highest regard. IF you are someone who wants Apple to kiss up to you to the detriment of its customers, you might think they are arrogant…. Microsoft might say that because Apple does not dutifly get out of every business that Microsoft wants to own.
Apple isn’t a monopoly. They have less than %10 of the PC market… and they haven’t even entered the phone market yet.
Smartphones– generally with less features than the iPhone go for $500-$700. Given that much of the price of the iPhone is due to the components (8G of Flash costs a lot more than the 64MB of flash that most phones have! A large, high resolution color display is more expensive than a tiny, low resolution color display on most “smartphones” in the $500 range) and on top of that it runs a real operating system (based on Unix) and has a lot of horsepower… wheras most phones are fairly pokey and running tiny operating systems because they don’t have much resources.
From your perspective, wanting to keep your cellphone costs below $10 a month, the iphone probably doesn’t make sense.
I’m also frugal, but for me, the iPhone has a lot of potential– an iPhone is cheaper than a cellphone + ipod + laptop, and the iphone will let me do the things I primarily use all three for.
Anyway, enjoy your site, agree with your frugal savings oriented philosophy, but think you’ve missed the mark on the iphone.
Best Wishes
January 29th, 2007 at 1:26 am
Jay,
You understood me wrong, or I didn’t make it clear. My monopoly comment is more of a general comment. In Apple’s case, I meant patent-protected features, such as the music dial in iPod. I am all for patent protections, and see nothing wrong with it. But the fact is consumers will always pay higher price for it during the patent protection period(just like patent-protected drugs coming off to become generics).
I know how Apple treat their IC suppliers because I work at an IC company which supplies/potentially supplies the ICs. Definitely I wouldn’t say good relations. Probably you can say it’s good-for-Apple relationship.
On the trademark, the laws are very clear, and either Cisco or Apple is trying to bluff their way. Here is a post that says Cisco’s trademark expires. In any case, I expect a very clear ruling on the trademark. Certainly before reading the zdnet article, I thought it was quite clear that Cisco owned it.
http://blogs.zdnet.com/Burnette/?p=236