I’ve enjoyed reading Wade Roush’s astute dissection of the argument put forward by The Wall Street Journal and, most recently, Business Week, that cell phones pose a grave threat to the future success of the iPod. Roush doesn’t think that’s going to happen.
For the last eight months, I’ve been arguing that it will. Taking Roush’s points one by one, here’s why the cell phone will emerge as a serious alternative to standalone MP3 players.
Roush: Smart phones are good at many things, but excel at none.
I agree, but I’ll even take it one step further: Cell phones don’t even get the one thing they’re designed to do – facilitate voice communications – very well. Calls drop out all time.
Even with that fundamental flaw, cell phones have become the ubiquitous device. The consumers’ perceived benefits of carrying a phone outweigh the obvious problems with the devices. Consumers are also more than happy to pay for low-quality additional features if the perceived need is high enough
“To take album-quality pictures, they don’t use camera-phones,” Wade argues. “They use dedicated digital cameras.”
This is true, but that doesn’t change the fact that camera phones are one of the fastest-selling devices ever introduced. In fact, the number one vendor of cameras – period – in 2004, was Nokia.
Research firm Strategy Analytics says that 257 million camera phones were shipped worldwide last year, while only 68 million standalone digital cameras sold. When it comes to cell phones, people are willing to trade quality for convenience, a truism that maps to music just as well as it does photos.
Roush: The iPod isn’t just a music player, it’s an identity statement.
Phones, though, are increasingly become identity statements as well, as proven by the runaway success of Motorola’s slim RAZR phone, a model that “greatly exceeded sales expectations” according to the company’s last earnings announcement.
That doesn’t even touch on ringtones, which give people a relatively cheap way to personalize a commodity device.
Roush: When you have an iPod, you’re dealing with one trusted middleman: Apple.
This point won’t resonate with consumers. Most of the multiple-vendor relationships that Roush argues consumers will have to navigate will all be done in the background. Multiple vendor relationships haven’t stopped people from downloading ringtones from different sites. If, say, a consumer buys the soon-to-be-released Motorola iTunes phone, she will simply plug the phone into her computer and upload songs from iTunes. Before any music-enabled phone launches, vendors will make sure the consumer doesn’t have to jump through hoops to get songs.