[thought_alarm]

When you get past the author's ridiculous pooh-poohing of Apple's products, the actual analysis of the cell phone industry that he quotes is pretty well right on the mark and sadly still applies to the industry in 2012.

While the iPhone 1.0 lagged well behind established smart phones like the BlackBerry in a lot of areas, the iPhone was revolutionary in its overall quality, its user interface, and its web browser. It's often hard to predict how important those things will be. And all people had seen at that point was a demo from Steve Jobs.

But what the market research really failed to predict was that average consumers would start dumping their carriers and switch to AT&T just to get their hands on this new iPhone. That led virtually all other major carriers to jump through whatever hoops necessary to get the iPhone on their networks to avoid being left out in the cold. And the rest is history.

In an industry where it's the manufacturers who have to jump through all the hoops to get support from the carriers, this role reversal between Apple and carriers turned the industry on its head. Nobody would have predicted that in January 2007.

[InclinedPlane]

"Nobody would have predicted that in January 2007."

To be fair, plenty of people did. Plenty of people didn't, of course: http://tech.fortune.cnn.com/2008/10/22/revisiting-the-dumbes...

The fact that so many people couldn't wrap their heads around the iPhone's success is rather shameful. Sure, there's a lot of solid reasons why there was plenty of friction and many hurdles, but at the end of the day money is supreme. Is it shocking that $1400 of guaranteed revenue per phone would ultimately be embraced by the carriers regardless of their reluctance about some aspects of the process?

Ultimately what happened was that so many people fooled themselves into the idea that they understood the market and the industry better than they actually did. More so, they didn't want to admit that this development coming out of left field represented a superior understanding their their own knowledge, which was too much for their egos.

[Someone]

"Is it shocking that $1400 of guaranteed revenue per phone would ultimately be embraced by the carriers regardless of their reluctance about some aspects of the process?"

If you add "in a world where, each month, there are a zillion devices with $1000 guaranteed revenue that, if you are lucky sell well for maybe a month" : yes.

At the extreme, it can be not worthwhile to sell a product with a $1.000.000 guaranteed revenue if, in order to make that sell, you have to instruct personnel at thousands of shops, provide marketing materials for those shops, buy advertising space, etc.

It is not only that $1400 that makes the iPhone attractive, it also is the fact that you just have to put up a hand-written sign "we sell iPhones" to sell them in large quantities, not for a few months, but for over a year, without any changes to the model. That is what surprised many people.

[mattmanser]

I think it's forgiveable, the success just didn't seem obvious until you touched one of them. I remember being unimpressed by the iPhone until I actually used it. And then I opened the browser and that was it for me, that was my a-ha! moment.