It’s ironic that an industry so often praised for quick and constant innovation has moved so slowly in combating the iPhone.  Call it good timing on the part of Steve Jobs and Apple, or call it luck.  Or, alternatively, call Steve Jobs a genius yet again. 

Perhaps he knew the handset market – like the MP3 market before it – was ripe to be stolen, whereas game console companies have been fighting one of the most competitive battles in the business world for many years now.  I’ve occasionally wondered why AppleTV lacks a gaming aspect.  The device seems perfect for it (and maybe the next generation will).  But maybe Jobs knew the console war is being fought by giants, so he set his sights on an easier target.

We haven’t even reached the launch of the iPhone and already the media is discussing the “iPhone-like devices” competitors will create.  John Dvorak wrote in MarketWatch last week, “I can say for a fact that all the other handset players are freaked out by this device, and have contacted the independent design firms to come up with something as jazzy as the iPhone, in case it becomes a runaway hit.”  Fellas, we don’t want to tell you how to do your jobs, but shouldn’t you calm down and think clearly right now?  The iPhone is about to hand your asses to you, and your plan is to wait and see if it’s a hit? 

This shouldn’t have been hard: If the PS3 had launched without the Wii in sight it would’ve been difficult for Nintendo to make up ground.  It’s true some industry analysts believe the real success of the Wii has been the fact it makes an excellent second console.  In other words, owning a PS3 and an Xbox 360 makes little sense, but owning a PS3 and a Wii, or an Xbox 360 and a Wii won’t break the bank.  But the average consumer, mostly due to the cost of games, buys one console and sticks with it.  To allow a competitor to launch an important, groundbreaking device without a plan to somehow counter it is unthinkable in the console war.  It doesn’t happen.

So where’s the mobile industry right now?  Why hasn’t anyone stolen a play out of Nintendo’s book and created an inexpensive, innovative piece of hardware that, at a minimum, gives iPhone enthusiasts something to think about?  It’s not like there’s a shortage of ideas, and not all of them need to be expensive.  Ask the Japanese what their smart phones are like.  Here’s an example: Boo Hoo for You!

As it stands, we’ve entered a kind of Theater of the Absurd, where a $600 box the size of your hand makes legitimate sense to millions of people. 

There’s irony in the fact the price of the iPhone mirrors the PS3, and not only because the latter is berated for the cost.  Are we to believe the iPhone equals the PS3’s capabilities?  Please.  A contact at Sony told me the current price of the PS3 essentially reflects a free Blu-Ray player on top of a system that, as soon as the 2007 holiday season, will release games that graphically put everything else to shame.  And people want to see the price cut in half?  Today’s already thin PS3 margins will look gluttonous when the cost of the machine is forced to fall next year.

For a while there were rumors of a Google phone, but nothing seems to have come of it.  Word on the street foretold of an inexpensive, innovative white device.  Sound familiar?  It also sounds like the phone should’ve been made, by Google or someone else. 

But now the iPhone will launch without a Wii to rain on its parade, and will have the luxury of time that the PS3 lacked.  People took a look at the price tag and the lack of launch games and justified blowing it off because Nintendo had innovated and offered a machine for half the price.  It’s not difficult to connect the dots to the month of May when the Wii outsold the PS3 5-to-1. 

The iPhone will catch on quickly, set a new standard for what a mobile device can and should do, and everyone else will be left to imitate.  What’s the saying about those who don’t know history?  The mobile industry is repeating it.

 
Scott Goldberg