iPhone Preview Smacks of Pre Smack Down

Lots of news from Apple this week. There is of course the new Shuffle which has the web abuzz with chatter because the controls are on the headphones and not the device (stupid design doomed to fail) and there is the standard Mac Tablet rumor (Yawn; call me when they are releasing it OK?), but the biggest news to me was the fact that Apple has called a press conference next week to introduce some new features of the upcoming iPhone 3.0 software.

Apple, the company that can keep a secret better than the folks in Langley are giving a pre-release sneak peak? To me that means, Apple is feeling a little market pressure folks and that pressure is likely coming from the buzz that's growing around the Palm Pre.

Palm and Sprint Push the Issue

Palm hit the ground running with the Pre at CES in January, and they've managed to keep the hype machine fully stoked ever since. Just the other day they had a web event of their own along with their carrier Sprint. MocoNews.net reports that there wasn't much reason for this event except to keep the hype fires burning and keep the pressure on Cupertino. Of course, pressure works both ways and the iPhone has a distinct advantage in the marketplace, especially with the wildly popular App Store.

Palm and Sprint let it "leak" that there would be an applications store for the Pre too, but it won't be available until later this year (of course). Yet another work in progress. The Pre itself should be out some time in the first half of the year. If these people are smart (and they seem to be), they should release in Mid-May well ahead of the expected June release of the third generation of the iPhone.

Apple's Tit for Tat

Which brings us to the preview, which is distinctly un-Apple like, but competition makes you do things a little differently and I'm guessing that Apple is feeling it a bit. So as a preemptive strike of sorts, Apple will whet our appetites with an invitation-only media town hall next week. The elite will be treated to some pre-release news. Even with Brother Steve on the sidelines, Apple stills know how to generate some buzz of its own and this event should do the trick.

Who Wins?

It's still not clear if the Pre is really legitimate competition for Apple, but it sure feels like Apple believes it is. The true test will be when Palm releases their new phone. Will it work as advertised and will there be people lined up on the sidewalks outside of Sprint stores waiting to be the first to own one? Will they fly off the shelves as consumers trip over themselves to get one?

These are the benchmarks of popularity. For now Apple is the reigning champion, and it looks like they are taking steps to ensure they stay that way for the foreseeable future, even if it means revealing some goodies well ahead of the release.

[STATvoice]

"Apple, the company that can keep a secret better than the folks in Langley are giving a pre-release sneak peak? To me that means, Apple is feeling a little market pressure folks"

...Actually, Apple has held an event like this every year since the iPhone was first introduced.

While I hope the increased market pressure helps Apple & AT&T change their pricing structures and stop hindering advancement on essential features (tethering, MMS, copy/paste, etc...), I do not think they are shaking in their boots just yet about ANY other company's device. We have yet to see how Sprint alone will affect the Pre. While a lot of people seem to dislike AT&T, even more seem to hate Sprint.

In the end, Apple will release their products on Apple's schedule while paying little attention to the other (little) guys.

STAT

[Techwriter10]

You're right that they previewed some of the enterprise stuff last year to let people know this was coming, but the normal way of operatig for Apple is to keep it completely under wraps until the product is announced.

I don't think they are shaking in their boots either, but I do believe they are feeling a bit of market pressure, so we'll see where this leads us.

Thanks for your thoughts.

Ron

[kirasaw]

Listen very closely next Tuesday. The word to listen for is "patented" any feature they introduce as a patented feature is a direct shot across Palm's bow. While a patent war with Palm (who has a huge patent library) would be a blood bath for both companies, Apple with over 28 Billion Dollars in cash could easily out last Palm. If Apple feels they can defend a patent seriously it is possible that the Pre could be with held from market causing tremendous financial stress at Palm and Sprint. And if the Pre is considered to much for the iPhone to over come or a patent dispute becomes ugly - remember Apple has 28 BILLION Dollars in CASH, Palm's Market Value is less than 1 Billion, Apple could offer a 500% premium and never miss the money. Can't tell me stock holders wouldn't jump at 500% right now. Of course they could then take half the cash they have left over and buy Sprint also with a market cap of less than 12 Billion. So I think Palm and Sprint will be careful of that, since for 5 Billion Apple could buy Palm at a 500% premium and simply shut it down and sell the assets and take the engineers and patents.

[Techwriter10]

Good point. I didn't even bring up the patent stuff. I don't see Apple doing this, but nothing would surprise me really. Apple certainly does have the cash to win a pissing contest, but I don't seem them having any interest in buying Palm or Sprint. But if Apple does go the legal route instead of just waiting to see what happens--remember that Blackberry was supposed to be going after the iPhone too and nothing much has come of that--I will be disappointed. I think the iPhone can stand on its own up to any phone produced so far at least and I hope they fight on those terms, not specious legal grounds.

[martmart]

Ron,
Actually, pre-announcing products is a very common practice for Apple who has many times in the past held press events a long time in advance of releasing products:

- The original iMac was introduced in May 1998, 3 months in advance of the computer being available in August.
- The original iPhone was announced and demonstrated in January 2007 but didn't ship till six months later in June.
- The iPhone 3G was announced in June 2008 but didn’t ship till July
- The iPhone 2.0 SDK and Exchange announcement and demonstration in March 2008 preceded the release in June by 3 months
- AppleTV introduced in January 2007 but didn’t ship till 2 months later in March
- Previews of just about every Mac OS X release have preceded by many months the actual release of that OS version to allow developers to modify their software to make it compatible and take advantage of new features.
- etc etc

I think it is a stretch to assume that the Pre has forced Apple’s hand with this event.

Palm is a company that has been bleeding red ink for the last few years - n January, “Palm reported a net loss of $506.2 million for its second quarter of fiscal year 2009. Sales sank to $171 million, and its shipments decreased 13 percent. It had to go to Elevation Partners to get $100 million in funding to keep going.” Palm squandered their smartphone lead pioneered by the Treo and have made several increasingly desperate attempts to deliver a successor to the old Garnet OS, at one stage giving up and using Windows Mobile and thus allowing Microsoft to overtake Palm in mobile OS marketshare. The Foleo was an abortive flop and a fruitless drain on the company’s R&D and funds.

The Pre is Palm’s last gasp make-or-break hobbled by US-only availability through Sprint, a carrier even more maligned than AT&T. The Pre has some excellent features and impressive GUI but it faces some rather large obstacles before it has a hope of challenging Apple’s hegemony:
- No native compiler development environment only interpreted Javascript/HTML environment for apps
- No Apps or App Store yet vs the 27,000 app lead of the iPhone/iPod Touch
- No iPhone/iPod ecosystem (3,000+ peripherals available for the iPhone/iPod)
- No integrated Music store, no movie store, no audio book store, no TV show store, no Podcast library (100,000+ podcasts for iPod/iPhone)
- No compatibility with the thousands of programs written for Palm’s earlier phones and PDAs.
- Physically it is twice as thick as the iPhone

As such I think Apple still has a fair bit of breathing space before they might feel any serious competition from Palm.

It is far more likely that Apple is giving their usual advance notice to developers of the latest features of the iPhone 3.0 SDK to allow them to modify their current apps and develop new apps to take advantage of the iPhone 3.0 hardware due sometime this year.

-Mart

[Techwriter10]

Mart:
Thanks for the well researched comment. You are impressive and I stand corrected. I agree it's a stretch, but I see part of my job as a blogger is to try to make connections between news events that others might not have considered. It may be that the timing of these two events is completely coincidental, or it may be that Palm was trying to get their announcement ahead of Apple's.

Regardless thanks for your detailed response. I appreciate you taking the time to comment in this way and contributing to the conversation in such a meaningful fashion.

Ron