Analyst: iPhone 3G ‘not a significant player’

“If Apple hadn’t announced the 3G iPhone today, its share price would no doubt have tanked sharply; this was one of the most anticipated launches in recent memory and has had Apple fans salivating for weeks,” said analyst Jan Dawson of Ovum, a global advisory and consulting firm.

Dawson’s comments came on the back of Apple CEO Steve Jobs’ unveiling of the iPhone 3G during the opening keynote speech at the company’s Worldwide Developers Conference on Monday.

[ For all the news about the iPhone 3G’s launch at WWDC, check out InfoWorld’s special report. ]

“The new iPhone checks most of the boxes the various rumors had suggested it would — 3G, GPS, Exchange and VPN support, and so on,” he added. “It didn’t get any bigger — it still tops out at 16GB, half the storage of the largest iPod Touch — but most customers probably won’t mind that too much.”

Appreciating its MobileMe feature, Dawson said, “MobileMe was the biggest surprise of the event, although some blogs had picked up on some signs that it was coming in the last week. It extends .Mac to the iPhone and iPod but perhaps most importantly the PC, and as such becomes a service with many more applications than .Mac ever had.”

[ See related story: “MobileMe replaces .Mac” ]

Impact of low price Apart from its much promoted features, one of the most attractive highlights of the new device’s launch is its price.

The iPhone’s new avatar is being touted as much cheaper than its original version. It will be priced at $199 for the 8GB model and $299 for a 16GB model when it goes on sale on July 11 in some markets. Commenting on this price factor, senior analyst at Ovum Steven Hartley said: “Most important to users are the lower prices, which we flagged up as a barrier to uptake in the first version. However, it is important to note that no details of the price plans associated with the 3G device have been revealed. Given that they are 3G rather than EDGE data plans it is likely that they will be more expensive. Therefore, the total cost of ownership of the new iPhone could remain prohibitive to many.”

A new breed of users — enterprises — was also highlighted at the launch. Support of Exchange and Cisco’s VPN was touted as a way to encourage enterprises to take the iPhone.

Nevertheless, with all its talked-about features, will the iPhone still be enterprise friendly? Hartley does not sound enthusiastic: “We remain far from convinced that it will be a significant player in this space. We imagine that using iTunes to synchronize enterprise applications would make most IT departments quake with fear! This is in comparison to the wide portfolio of business-optimized devices and managed services that operators can provide.”

Threat to other vendors? With the iPhone 3G becoming the talk of the town and everyone wanting a piece of it, will it drive out other mobile devices from the market? Should other device vendors be worried?

“Apple claims to have shipped 6 million iPhone since its initial launch at the end of June last year, less than 1 percent of total shipments,” said Hartley. “Admittedly Apple is not targeting the entire device market, so their share of the high segment will be more, but it is important to put Apple’s marketing presence in context with its size relative to Nokia, et al.”

But the threat is there, building up, he said. “This time Apple is competing in more markets at lower price points (again subject to price plans). Therefore, we feel that this time the potential for disruption is greater than before.”

Computerworld is an InfoWorld affiliate.