Wednesday, June 27, 2007

Apple's iPhone...Could They Introduce An iTunes Browser And Create An ECommerce Powerhouse?

The Apple iPhone arrival is almost here.

I thought it would be a good time to jot down some ponderings about what the iPhone could provide for mobile marketing and Physical World Connection.

In my opinion, it's not the phone itself that will be a huge success, it's that Apple is tying in their iTunes platform (PC) with a mobile device.

The iPhone could be "the" universal remote control that ties in a website for control and further review.

If Apple can make it as easy to interlink a mobile phone and a PC (like they do with iTunes and an iPod), they could become a mobile marketing and mobile commerce powerhouse .

A user with an iPhone interacts with the physical world, outside of the PC world. (mcommerce, barcodes, text messages, maps, alerts, phone calls etc). They "dock" their iPhone into their PC and pass/store their mobile world activity into the iTunes platform.

Your Physical World Connection activity (mobile phone) can now be presented on the iTunes platform creating exciting opportunities.

This product/service could be a mobile marketer's dream.

Outside of the phone itself, why could Apple become a mobile marketing powerhouse?

Ecommerce billing method is already resolved with iTunes, and the platform is so easy to use.

I am already thinking of the link the iPhone could provide with TV and Internet advertising. It's not hard to see how the iPhone could be a universal "remote".
Remember, more shows are offering to sell episodes thru iTunes.

Bring your iPhone home and upload/download activity (surfing, text, email pictures, calls) and content to your PC. Advertiser can place relevant ads.
Keep a record of your text messages, and all of those links sent via text that you couldn't really open using your mobile. Advertisers place ads next to relevant text messages.

So will Apple introduce an iTunes browser and complete the circle?

I see an iTunes browser that allows a user to search, buy and "work" with the activity generated on the iPhone. Also an iTunes browser will allow ecommerce to be facilitated easier (billing platform) with other merchants. Pay with iTunes or iBill.

Mobile Ticketing.
Apple can start selling tickets (movie, airline) through the iTunes platform. A barcode can be sent to the phone and presented at the door.

The pictures taken with phone are uploaded to the PC for numerous interactive and advertising options.

Apple has already started to use QR codes in their advertising too. All of those 2d codes that an iPhone scans can have another dimension to them. Not only will the user be directed to the URL when iPhone scans the mobile code, but your Physical World Connection activity will be recorded on iTunes. This allows you to get more information about a product using your PC and advertisers (2D code owners) will be able to continue the interaction with the user on the bigger screen.

This will make mobile codes even more valuable.

Other ponderings about the iPhone


Eric B said...

Judging by today’s selloff, I think potential customers are starting to realize how expensive the iPhone will be. If you sign the mid-range $99.99/mo service plan after purchasing the 8GB iPhone model, that alone will set you back $3000 during the two-year contract (without any accessories)!

Here’s a few other potential hurdles that could prevent the iPhone from exceeding its already lofty expectations:

* You must be an AT&T customer to use the iPhone. With a market share of 20%, that means 80% of wireless customers must cancel their current contracts to sign with AT&T. Being a Sprint customer, I would have to pay a $175 cancellation on top of the $3000 price tag for the iPhone. AT&T’s exclusive contract runs through 2009.
* Only 4 & 8GB of hard drive space? My tiny video iPod holds 30 GB for less than $200.
* Recent surveys have shown that the majority of IT departments will not even consider the iPhone due to its PC incompatibilities & exclusive AT&T contract. That will dampen business spending & all but eliminate demand for the higher-tier contracts.

This is the ultimate “sell the news” scenario. On Jan 9th 2007, Steve Jobs announced the iPhone at the Macworld Conference & Expo. The stock has since been on fire rising 50% to $125, adding $30 billion to the company's market capitalization. Will the iPhone really hold that much value for Apple? This huge runup comes after a fantastic finish to 2006 after Apple’s stock bottomed out at $50 in October. Thus, nearly everyone holding Apple is sitting on huge gains.

Expect an Apple selloff on Friday when the iPhone is finally released. 3 similar mini-selloffs have occurred during this recent runup:

* June 26th: Apple announces 6 AT&T service plans for the iPhone. The stock drops 3% on investor concerns over the high prices.
* June 11th: Steve Jobs shows off the iPhone at Apple’s World Wide Developer's Conference. The stock falls 5% after investors saw no “surprises”.
* March 20th: Apple beats 4th quarter analyst earnings & revenue estimates. The stock falls on profit taking.

Apple’s recent success has created impossible expectations. With all the mega-hype already priced into the stock, just meeting expectations will create a selloff. I plan to sell tomorrow and buy back in a couple months. Longer-term investors need not worry because the future looks bright with Macs gaining market share & the iPods continuing their dominant foothold on the music industry.

Scott Shaffer said...

While I don't anticipate getting an iPhone, I wouldn't judge the impact it could have, by the price of Apple's stock, over the next few weeks.

Steven said...

Hi there,

I agree with you concerning the ability of mobile computers to link the PC and physical world by replacing paper print. For example, in Japan, you can already purchase tickets and download a scan-able barcode onto your cellphone which you would then use to gain admission. I recently did a test trial with a barcode on my iPhone, which I posted about on my blog: