Convergence
Since the introduction of the Palm Pilot, back in 1996, most of us have carried at least two electronic devices attached to our belts. The iPod has only made things worse. Consumer electronics companies have seen a business opportunity consisting in developing a device that combines multiple functions previously only available in separate devices. This trend is called convergence.
Today most phones include a digital camera and most consumer level products also play songs. On the high-end, phones are more PDA like, with small keyboards that allow business users to access their e-mail and back-end systems.
From what we have heard so far, it seems that if Apple releases the long rumored iPhone, it will be a consumer phone, with emphasis on providing a good camera, decent games and a great music player. The scroll-wheel (which the device is likely to inherit from the iPod) is perfect for s music player but it is not a good input device for capturing long messages. So, while the rumored device should be a competitive phone in the consumer market, it is not likely to be the product that everyone is looking for. With the rumored feature set, and smaller production volumes than competitors that are better positioned globally, the iPhone is not likely to be the cheapest. It will have to compete at the high-end with PDA style devices and at the low end with cheaper phones that can be purchased almost everywhere and are backed by the telcos.
Even so, in the U.S. Apple should be able to leverage it’s retail stores to reach a large amount of customers. If Apple can grab even a small amount of customers from Motorola, Nokia and Sony Ericsson, it could translate into an incredible growth for Apple. This is a once in a lifetime opportunity.