- A new model of iPhone, a price drop for the old device, and the ship date for the updated software. The new model, arriving in two memory configurations (16 and 32 GB) is called the iPhone 3GS. The phone is faster (in terms of processor, graphics, and wireless connectivity), has more memory, a better camera (now 3 megapixels), a compass, and enables a series of new features (e.g., video recording and voice control of many device capabilities). The subsidized prices of the two models in the US (only on AT&T's network) is $199 and $299 -- and those subsidies only apply when a customer signs up for a two-year plan (and is eligible for subsidized phone discounts).
Instead of creating a low-end 3GS model, the company has chosen to continue a single memory configuration of the current 3G model (8 GB). The good news is that the older technology phone will only cost $99 upfront (again, with a two year contract and subsidy eligibility).
The final important iPhone announcement was the official shipping date of the iPhone and iPod touch operating system update, iPhone OS 3.0. The updated code will be available Jun 17. As with other OS upgrades, there is no charge for iPhone owners but a $9.95 charge for touch owners (due to accounting issues).
A key point to remember is that first- and second-generation iPhones (and touch models) will not be able to take advantage of all of the features in the 3.0 upgrade (e.g., the new MMS capability, which enables sending photos via texting, will only work on 3G and 3GS models). This should not be a shock, as first-generation phones do not support GPS, so any app that relies on this feature won't work on early devices. In addition, enhanced capabilities, such as the improved graphics chip in the new 3GS model, means that some of the 50,000 and growing apps will not work across models (e.g., a game coded to take advantage of the OpenGL ES 2.0 standard will only work on the latest models). We are still looking at Apple for a simple chart that notes the available feature set for each device.
Read the Apple press release about iPhone updates here. - The shipping date, some additional details, and the cost of the upgrade to its desktop operating system, Mac OS X. Not to be forgotten is that before the iPod and iPhone success, Apple was mainly a computer company. Its flagship computer software is the Mac OS, software that comes in only two flavors -- desktop and server (as opposed to Microsoft and its many versions of Windows desktop and server). The next version, 10.6.x, is called Snow Leopard, and it will replace the current version (10.5.x Leopard). Apple says it will ship in "September 2009."
With most of its enhancements "under the hood," pundits were wondering if Apple could charge its traditional $129 for the new OS. It turns out that for anyone now running Leopard, Apple will make 10.6 available for only $29 ($129 for anyone on a version older than 10.5). This low cost will put pressure on arch-rival Microsoft. That company is launching an OS upgrade of its own this fall, Windows 7, that is seen largely as an improvement over the much-maligned Vista (see the official Windows 7 page here). Given that Microsoft recently spent millions on marketing the cost advantage of choosing PCs (running Windows) over Apple hardware, it will be interesting to see how Microsoft executives respond to this slap of the pricing gauntlet. If they do nothing, they risk being ridiculed for looking like the high-priced alternative they said they were not; if they react, they are letting Apple dictate the terms of their pricing. Neither may be a fair assessment, but in the court of public opinion (read: online forums, tech blogs, etc.), reality is usually irrelevant and the fanboy flames will burn brightly.
Read the Apple press release about Mac OS Snow Leopard here. Read about many of its details on its official landing page here. - An updated notebook line and the official release of its next-generation browser. The other two announcements that Apple hyped but that generated less PR and community reaction are updates to its line of notebooks (and the rationalization of the naming) and the official release of Safari 4.0, the browser for modern Mac OS systems.
The notebook changes essentially eliminated products without the Pro in their name (or, for the time being, minimized them; there is still one MacBook model left built around a white plastic shell) and gave the 17-, 15-, and 13-inch (screen size) models the same look and feel (aluminum "unibody design" construction, illuminated keyboard, etc.; other minor and major differences depend on each model and the various configurations available). The most controversial change is that now all three Pro models (and the Air, which received some price cuts as well) feature a built-in battery that is not user-replaceable. While Apple claims this technology allows for "up to 40% longer batter life," some buyers may be put off by the inability to carry a second battery (e.g., for long flights) or replace, on their own, one that has lost its ability to fully charge.
As for Safari, that announcement is not very interesting in that the beta has been available since February of this year, so many users (running Mac OS or Windows) are already familiar with the changes (though some last minute modifications, such as how the tabs work and a revamped progress bar, did come as a surprise). But still, the release is important. Version 4.x not only improves the overall browsing experience for its users, but its also means that Apple's next-generation browser, like Microsoft's (the Internet Explorer 8 browser), have both been officially released (and, note, prior to either of the major OS upgrades).
Read the official Apple press release about the notebook changes here and the Safari release here.
Nothing earth shattering, but Apple is forcing the competition -- whether bigger or smaller -- to react
Nothing announced at the WWDC keynote was earth shattering (from a PR or market perspective), partially because Apple has not been able to plug leaks recently and partially because the company has seeded much of its new software in public or near-public beta releases (e.g., iPhone OS 3.0 and its SDK and Safari 4). However, everything that was trumped accomplishes three important tasks:
- Provides a solid upgrade that is defensible against encroaching competition or narrows the gap between Apple and market leaders. With the new feature set of the iPhone 3GS and the iPhone OS 3.0 (hardware and software), Apple has addressed most of the major complaints leveled by the media and tech watchers. It has also raised the bar in terms of some unique features and the overall value of the devices (see the pricing bullet below). And, of course, Apple's wildly successful App Store is a massive differentiator and remains a major PR driver (among other things, it creates consumer confidence in buying into the platform.).
Similarly, the Snow Leopard OS update also address some deficiencies in that offering (e.g., being 64-bit for all "key system applications," having deep Microsoft Exchange support, and delivering some advanced security features) while laying the groundwork for exploiting Windows with some of its new capabilities (e.g., Grand Central and OpenCL support). - Forces competitors to respond to aggressive pricing. Palm, basking in only two days of relative exclusivity of PR due to its Saturday launch of the Pre smart phone, suddenly finds that its offering does not compare well on paper (see note on the launch here). The 8 GB Pre, the only model available, is $199 after a $100 mail-in rebate and with a two-year Sprint contract. In contrast, there is an 8GB second-generation iPhone for $99 and a 16GB third-generation device for $199 -- with no rebate hassle, either (same two-year lock-in, but with AT&T). Yes, there are significant differences in voice and data plans that give the Pre an advantage, but many consumers will overlook those and focus on the device price (and AT&T may respond, eventually, and drop its plan prices to a more Sprint-like level). Also, it's not only Palm that must respond to Apple. RIM's BlackBerry Storm also looks overpriced in the wake of the WWDC announcements.
On the PC/Mac front, as mentioned above, Apple has put pressure on Microsoft to reexamine its upgrade pricing for Windows 7. In addition, the price cuts on the Apple notebooks mean that Microsoft's much-discussed "bargain hunters" advertising campaign now is somewhat out-of-date (watch the ads here while you still can). At the very least, if Microsoft does not update its marketing in this area, expect Apple to hit back with more "I'm a Mac, I'm a PC" spots that point these issues out. - Keeps the PR beast well fed. Apple keeps people talking about its products and services by not only delivering offerings customers enjoy or long for, but also by tweaking competitors and fans of competing technology. Get Microsoft and its supporters mad and talking about Apple? Check -- bash Vista. Get Palm and its Pre supporters mad and talking about Apple? Check -- bash the Palm App Catalog and pretend the iPhone is way ahead of competitors even when some features are years late to market compared to alternative devices (e.g., copy & paste functionality, MMS support, a 3 megapixel camera, etc.).
Aggressive, over the top, and "take no prisoners and feel no shame" executive speeches and marketing ensures that Apple customers feel they are getting the best products, company supporters have ammunition to promote Apple products in countless flamewars online, and the media -- mainstream and tech-centric, including community sites and bloggers -- can never ignore the company and its offerings. Apple knows it won't convince the majority of rabid Microsoft, Palm, and other supporters to embrace the Mac and iPhone/iPod experience, but it can keep them talking about Apple and its offerings.
By: Tom Rhinelander
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