iPhone and MobileMe: First Thoughts

June 9th, 2008

Nothing was particularly shocking about this keynote — rumors made sure of that. We knew MobileMe and iPhone 3G were coming, and we knew most of the details, but that does not mean there isn’t anything interesting to discuss.


First, besides the all-plastic back, iPhone 3G does not look much different — and I am happy it does not. The original iPhone’s front side was simply stunning. Because the screen and casing are similar in color, and the front is covered in a layer of glass, it looks like the screen covers the entire device. It has a certain elegance that is hard to describe.

Which is why I hoped that Apple would not change the iPhone’s front. The design is too good to change.

The all-black backside, and the black front combine to make iPhone 3G seem even more subtle than the first.

iPhone is also a bit thicker now, too, at 12.3mm, but that increase appears to be imperceptible because the edges are thinner. It will likely look and feel like it is thinner, even though it is not.

Pricing, though, is the biggest news here. Apple dropped the 8GB model to $199, which is $400 less than when it debuted last year.

Jacqui Cheng at ArsTechnica just reported that Apple and AT&T have dropped their revenue-sharing agreement.

Some are speculating that while the iPhone now costs $199 for the 8GB or $299 for the 16GB, AT&T is actually paying Apple $399 or $499 for each iPhone sold in return for dropping the revenue-sharing agreement, which would amount to a subsidized iPhone.

I will be providing more thought on this Wednesday (along with an announcement), but in any case, the aggressive pricing and dropping of the revenue-sharing agreement signals that Apple is moving full-out to gain cell phone market share.

Which is an abrupt change in Apple’s business model. With Macs, Apple’s goal is not to take a significant chunk of market share from their competitors, but rather to sell high-end Macs with a strong profit margin.

Up until today, the iPhone followed a similar strategy.1 Apple would sell iPhone at a high-end price, and only wanted to take 1% market share by the end of 2008.

A $199 iPhone, while still too expensive for most phone users, puts it within reach of much more consumers. Perhaps most interestingly, though, and most tellingly, the iPhone now sells for $100 less than the iPod Touch, which reverses their order. Apple is aiming for dominance.

It is only unfortunate that we must wait a month to purchase it. I sold my original iPhone last week in anticipation of iPhone 3G, so I will be in the dark ages until then. Moving from an iPhone to a Motorola V557 is quite a bit like having your BMW replaced with a Flinstones’ mobile, and getting kicked in the nuts. No exaggeration.


Last Monday, I detailed what I hoped MobileMe would be, and we saw most of it. The only thing Apple did not include was iPhone access to iDisk, but that was more speculation on what it could become.

MobileMe is what .Mac should have been — a service which synchs your devices seamlessly, and gives you web access to your mail, calendar, and contacts that is at least as nice as desktop applications, if not better.

Synching between any of your computers and your iPhone is great, but what surprised me the most was the web applications Apple created. Mail is great — I especially love the quick reply function.

The calendar of all things, though, made me say “wow” out loud. First, it looks excellent, at least as nice as iCal on the desktop. But here is the best part: to create an event, you click on the calendar at the correct day and time, and then drag down to set how long the event is. For example, if you have a date tonight, you would click on Monday at 7PM, and drag down until, say, 12AM (or however long your date goes — results may vary), and then release. If you need to change which calendar this event belongs to, you just drag it onto the appropriate calendar and drop. Done.

That does not sound like much to be surprised by — and that is why it is so great. The UI looks simple and effortless to use, like it is a desktop application. But it is all through a browser, using web standards. Apple is truly pushing the bounds here with what can be done in HTML/CSS/Javascript, and it is incredible to see. Hats off to the MobileMe development team.

MobileMe is not being positioned just for Mac users.2 The MobileMe page prominently shows a Windows PC, and the walkthrough video shows MobileMe synching with Outlook.

This all has to do with how Apple is positioning MobileMe — Exchange for the rest of us. Not Exchange for Mac users, but for everyone.

The iPhone, with MobileMe, will also compare quite strongly against the Blackberry. To receive data on your Blackberry, you must also subscribe to a Blackberry data plan. Currently on AT&T, the lowest Blackberry data plan is $30 a month, or $360 per year.

A full year of iPhone data, plus MobileMe, is $3403 — cheaper than the Blackberry’s plan, with much more: you get push email, calendar and contacts, the best online access of any service, photo galleries, and 20GB of online storage.

That is a rather convincing comparison for me. Cheaper, and more features.

Update: Well, my reasoning for the iPhone+MobileMe comparing favorably to the Blackberry was just invalidated in record time. Gizmodo is now reporting that the iPhone 3G will require a $30 data plan, and must be activated in the store. I am not happy about this news at all, especially the last part.

  1. Although it was somewhat-dilluted when Apple reduced iPhone prices to $399 and $499. This reduced their profit margins, but as far as I can tell, they were still strong. []
  2. As unfortunate as that is, because it means we lose @mac.com. I am going to have a hard time getting over it. []
  3. $20 per month for the data plan, which is $240/year, plus $99/year for MobileMe. I would assume you will be able to reduce this further by purchasing MobileMe on Amazon, if it works the same way as .Mac. []