@ WWDC: Apple 3G Interview: The Real Power Is Combining Hardware, Software And Services
Following Steve Jobs’ 3G iPhone unveiling today, I was able to sit down with Apple (NSDQ: AAPL) execs Bob Borchers, senior director of iPhone product development, and Chris Saito, senior director of Internet services. Some excerpts from our conversation:
To clarify, what’s launching on July 11? Borchers: The iPhone 3G will be available in 22 countries, and the iPhone 2.0 software will be available at the same time, which will extend the exchange/enterprise features and the App store to the current iPhone customers, including the iPod Touch customers, and of course as well as the 3G customers. MobileMe will also be available in July, but push notification will be available [to developers] in September. At that time, developers will roll out push notification, so it’s not totally a consumer-facing event.
And, MobileMe will replace .Mac services? Saito: “As we launch MobileMe, which includes push email, contacts, calendar, photos, and file storing, we’ll upgrade .mac members to MobileMe, and they’ll get all the services that are included in MobileMe.”
There’s other phones that have push-email services that aren’t BlackBerry devices, how is this different? Saito: MobileMe is what we’ve built and is a really great service that works for the iPhone, the iPod Touch, and is compatible with the Mac and PC. And it works with native apps on those different devices, like iCal, or you can use with PC applications like Outlook…And we have an incredible web experience which is very Apple, and it works great…We think we have a really good and comprehensive solution that consumers will love. Borchers: I think that the complete solution is really important because it combines contacts, email, photos, etc. Because I might have push email, but how do I get my contacts? It’s all completely natively integrated. Saito: Yes, it is, and it’s easy to sign up. You just sign up for the service and then enter your username and password on the phone.
Is that going through Apple’s servers? Borchers: Yes, we have a set of servers we run, which we call the cloud. The consumer has the ability to access their information wherever they are. At home you put a phone number that’s changed, and then on the road, it’s there, and everything stays up to date automatically.”
At the SDK launch in March, you criticized the fact that RIM (NSDQ: RIMM) uses separate services because there’s an inherent security risk when things travel through another layer. How is this different? Borchers: That was more in the context of an enterprise model, and that’s one of the distinct advantage of Exchange ActiveSync because it goes directly from your servers. But for consumers, MobileMe has robust security involved. On third-party applications, like instant message and eBay alerts that you want to receive even when not running the application in the foreground, do go through an Apple server, but only the notification, not the whole message. Saito: The heavy data isn’t going through our servers.
Is there any change to the camera? Borchers: No, it’s the same, and still looks great when you view them on the 3.5 inch screen, which is one of the things we’ve heard from the consumers that they are using. Is there a flash? No.
What about 3-way video-conferencing? My cab driver said she wouldn’t buy an iPhone until it supports 3-way video-conferencing. Borchers: “3-way? Dang! Oh, man….No, we have nothing to announce today,” he said, as he picks up the 3G iPhone, and shows that there’s no front-facing camera. He adds: As you can see, the phone has a more sculpted surface. It’s a bit lighter but has about the same volume, and the headset jack is flush, which has got all the applause. It’s overall a really nice feel. And, the new power adapter is small (It looks almost like a small international adapter that converts electricity).
Are you unlocking the 3G iPhone (another request I received from the cabbie)?: Borchers: “We have nothing to announce on that front, but in terms of changes, we have sent an updated 8K today.”
Yes, I saw that and interpreted that as being a change in the business model. Borchers: “To take the words for what they are, it talks about additional revenue streams and how some of that is changing.” Does that open the door to subsidies? “I think that you’ll see market by market as things come along, in terms of pricing models, but the carriers will get involved in making those announcements. What Jobs said is the vast majority of countries would not exceed $199. Our goal is to get the iPhone out to as many people as you can.”
You see what happened with Motorola (NYSE: MOT). It had a great iconic device that became really popular, but then didn’t have anything to follow it up. Then you have Nokia (NYSE: NOK), which has amazing marketshare because of its portfolio depth. I’m wondering if you have a different approach to market, or do you see yourself continuing with one device or the depth approach? Borchers: “I can’t comment on Nokia or Motorola, but what I can say, and one of the things we believe very strongly—with the first iPhone and now with the iPhone 3G—is the power of combining all of the disciplinary approaches: the hardware, software and services. The power of the software allows you to constantly innovate and make things better. iPhone 2.0 is a good example of that. Existing iPhone customers will be able to download it for free and that gives them incredible new capabilities that allow them to reinvent the phone they’ve already had for a year. That’s just a tremendously powerful capability that we believe in and focus on. We want to make the best services, and that’s really our focus….You’ve been in this industry long enough to know that having 80 percent of your customers using more than 10 features on your device—that’s unheard of and to do that with 90 percent satisfaction—Those are pretty keen votes. We couldn’t be happier.”
What about adding some keys for hardcore emailers? Borchers: You can see the power of having a software keyboard today, in that we now support multiple languages and we can continue to improve and make more new advances on the keyboard.”
What do you think of the several iPhone knockoffs on the market? Borchers: “I think what we focus on is being as innovative as possible and continue to move the bar up higher and higher, and again I come back to to the real power, which is combining the hardware innovations with software and service innovations. And that can be a challenge to follow.”
Since AT&T (NYSE: T) is a big partner, would you consider adding MediaFlo to the iPhone? Borchers: “I think that the answer is that we don’t have anything to talk about at this point, although I will point to the mlb.com demo today, which showed the power of video and video clips. The iPhone is a great way to view and consume media, and today iTunes has TV shows and podcasts and other media, so I think TV and videos is already on the iPhone today.”
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Comments (6)
Jun 12, 2008 4:38 AM
In reality it is powerful to combine a harware software and the services. I Apple has righfully done so. What would always have the maximum value be the services that run on them.
Aug 1, 2008 7:36 PM
What I meant, I know I wasn’t clear, was if you already have a contract and you buy the phone, is it still the same price? Even if you already have a contract? And the answer is yes, you’ll have to restart your two year agreement like with the last iPhone, but you won’t get charged more(or “full price” as is the case with other phones) if you already have a contract, like they do with other phones. I hope this is clear.
So the full price of the phone is $199, that’s not the incentive price to get you to sign a contract, that’s the full price.
Aug 14, 2008 4:08 AM
Wow! Great device
Sep 18, 2008 2:32 PM
Isn’t the 3GB a lot more expensive in the long run?
Dec 3, 2008 10:25 AM
Thank you..
May 11, 2009 11:36 PM
It’s nice article…