Apple iPhone raises the standard for handset developers

January 18, 2007

In the recent report, "iPHONE: Rising Tide Lifts Converged Media Device Emphasis," Strategy Analytics expects the iPhone launch to be a sorely needed "shot-in-the-arm" to the traditional handset markets development efforts in cellular-enabled media devices, but the lack of W-CDMA support could prevent it from hitting Apple volume projections.

David Kerr, Vice President of the Global Wireless Practice at Strategy Analytics states, "While the hype around the iPhone is reaching dangerous levels, one benefit we are already seeing is a greater emphasis from handset OEMs on improving usability and making interaction with the handset easy and intuitive for media and productivity applications. Just as the Motorola RAZR energized design innovation, Apple's strong global brand and reputation for innovation in this area will be a catalyst for change. Traditional handset OEMs must improve or face being cast aside by operators who are looking for both strong usability and brands to drive their data service initiatives."

"It is possible that the lack of 3G cellular connectivity on the phone could be a bigger issue than Apple is ready to admit," adds Chris Ambrosio, Director at Strategy Analytics. "This puts significant pressure on the iPhone to be a strong performer out-of-the gate. European operators, who are increasingly willing to offer devices that emphasize off-portal content, if it helps drive their overall branded services value, will be watching early iPhone performance closely to determine how much impact the non-WCDMA iPhone has on Cingular Wireless churn and growth metrics. This will be a key determinant of whether it is worth adding to their increasingly 3G-focused portfolios."