The iPhone continues it's march to service dominance

What’s so exciting about a new iPhone?

On the face of it: A veritable riot of possibilities.

I could sense the excitement of the community. This morning at 10am San Francisco time, the stage was set for at least 60 odd minutes of what promised to be a roller-coster ride of pure joy.

Only, it wasn’t.

And it never is.

Did you say 20 megapixel DVD quality camera? No?

A 500GB iPhone 4G, you say? No?

No. Not at all. It’s steady as she goes.

We saw a few interesting iterations and additions — but mostly, the iPhone 3GS is simply bringing the platform up to speed. Now it does Bluetooth, more or less properly. Now you can do MMS without having to buy Ed Lea’s excellent application. Now you can, GASP, cut-n-paste. Now you can… prepare yourselves… TETHER.

Yes, you too can tether your iPhone 3GS (“The S stands for speed?”) to your laptop.

And it’s got Exchange. More or less properly.

The auto-focus camera might help some users avoid carrying their camera or supplementary Sony Ericsson.

But the fact the device form factor isn’t changing at all — the fact that it’ll be really, really difficult to tell if you’re using an ‘S’ or a normal iPhone 3G as you waltz down the street, that speaks volumes.

This is an interim release. Finally the promise of 3.0 is unleashed on the salivating developers eager to get hold of the micropayment functionality. Finally hardware accessory vendors can really get their teeth stuck into the platform — and, yes, finally, developers can wallpaper over one of the iPhone’s most annoying features: No background application support. No you’ll get a mildly bollocks-looking message appear on your device prompting you to stop what you’re doing, lose everything and open one of the applications that is demanding your attention.

Those hunting for the shock and awe of Apple from yesteryear were left feeling hard done by.

In fairness, it’s not every day that you can stand up at a conference and say you’re about to change the mobile industry — before showing off a wickedly cool first generation iPhone.

We’re there, we’re done — iPhone has already had the desired effect. The behemoths have awoken. Nokia, Motorola, Google — even Palm — they’re all taking lessons from Apple’s successes and implementing them with various degrees of success.

What’s clear is that Apple is continuing to gather momentum nicely, particularly now that it’s harnessed the might of hundreds of thousands of application developers to it’s cause.

The iPhone is still the shining light in the mobile industry. It’s still showing the way, irrespective of the odd flaw. And it’s only going to increase.

How long have the other players got before Apple begins to grow it’s beachhead into a larger and larger share of the smartphone market?

The $99 price-point for new customers of AT&T (for the 8GB 2nd generation iPhone) is likely to draw more and more attention and continue to shift the devices in their low millions across this coming year.

How long before you can pick up an iPhone 3G 8GB for $49? Or free on a 2-year contract? Or free on a 12-month contract?

I’ve always maintained that if you offered an iPhone to a normob at a reasonable and competitive price, they’d snap it up. For your normob, the iPhone represents both a brilliant unification of requirements (walkman, camera, mobile, web browser, games machine) limited only by it’s cost.

Case in point: The taxi driver who took me to the Moscone Center this morning showed me his new Blackberry on T-Mobile. He loves it. Not the device but ‘it’ — the ‘service’. The fact he gets ‘unlimited’ for $50. He’s taken a look at the iPhone. Most certainly. He covets the device — he likes the possibilities it offers. But he just can’t get his mind over the device cost and then the rather annoying price plan limitations that AT&T imposes (e.g. only a few hundred minutes and texts). He’s watching the marketplace like a hawk. If the iPhone hits $99 and matches his T-Mobile price plan, he’ll buy. (Of course AT&T are doing their level best, obviously, to avoid this.)

I wonder just how many of those price-sensitive customers there are out there in America and beyond?

We shall see.

For now, good work Apple. Keep the innovation moving.

I’ll upgrade to the 3GS just as soon as I can, anyway.

You will, too, won’t you?