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The parable of the the PDA: predicting the smartphone's future

When reading the comments disputing the possible end of the voice-phone era I’m reminded of similar comments disputing the end of the PDA era.

Although the Apple Newton pioneered the market in 1992 and John Sculley came up with the acronym, the Newton did not sell in significant volumes. It wasn’t until 1997 with the Palm Pilot that the PDA market took off. Microsoft quickly followed with a licensed OS based on Windows CE. In 2001 Microsoft launched the Pocket PC brand to cement its attack on the PDA market. The first phones using a Microsoft OS were using something called Pocket PC Phone Edition. The first Nokia smartphones (Communicators) were built like mobile PDAs.

The logic was quite compelling. The original PDA was built to mobilize contacts, calendars and notes. They replaced bulky paper organizers and seamlessly synced to PC productivity software like Outlook. It was a compelling product in the US where small business customers needed to keep track of hundreds of contacts. Users could even ‘beam’ contacts to each other via infrared. The idea of adding a phone function to the device made sense insofar as contacts could be immediately dialed from the contact app rather than typed into another device’s phone keypad.

By the early 2000’s PDAs were forecast to sell by the hundreds of millions. There were millions of dedicated users who downloaded apps and thousands of developers being courted by platform builders. Palm even invented the word “ecosystem” as it refers to mobile platforms.

However, I remember reading sites dedicated to this community and there were many people who rejected the concept of a PDA with an integrated mobile phone. They liked the fact that the PDA was not bundled with a phone plan. They upgraded PDAs in a different cycle from phones and besides, phones are for talking and PDAs were for something else.  It was even more difficult to justify the conflation of the two products when considering the corporate purchasing of PDAs. PDAs were procured by IT departments and phones came with contracts that were managed by a different department.

What’s a device vendor to do? The most avid customers of PDAs did not like the idea of burdening the product with a phone. RIM was doing its thing with moving pagers to include voice, but that was a different job to be done. The story is picked up here by this comment:

I was hired by RIM in 1999 just before they began work on their first phone …. Coming from a two-way pager background, RIM decided that phones should have two-way push synchronization of pretty much everything that Exchange provided along with a limited WML browser. The general thought was that phones would never have sufficient power density or radios sufficient bandwidth to allow anything more. That was incredibly predictably wrong, but it’s how things went down.

Along with RIM was Ericsson, Palm, Motorola, and Qualcomm. Motorola came from a similar background as RIM and went on to build very similar devices. Both Nokia and Ericsson had come from phones and had decided feature phones should have far more sophisticated PDA functions. Palm started with PDAs then moved to the phones, but adamantly dismissed ideas like wireless synchronization for years making their first attempts at smart phone far more like early Nokia Communicators than early Blackberrys…

So the point is that all these companies were fighting over what amounts to overgrown PDAs with phones and wireless stacks strapped on. Everyone assumed power density was no where even close to what was needed for general computing, that a full featured browser and heavy duty Internet services were impossible due to bandwidth and latency. Take a look at how our Java expert groups named standards, how people at the time talked about what features smart phones should have, and its clear that no one thought an iPhone was possible. Even Danger, which eventually went on to work on to create Windows Phone 7 and Android, was just working on a better Blackberry.

via: shacknews

But what does this have to do with the future of voice-phones?

The problem is that the vendors that lost this game failed because they listened to their customers. Like with PDAs or with the original mobile phones or first generation of PCs, early adopters are not the audience that should be consulted on how to improve the product.

Early Windows Mobile users were ecstatic about the platform and rejected new UI metaphors because they wanted a “mobile Windows”. Palm fans stuck with the PalmOS even though it was well past its shelf date in the Treo because they treasured the original PDA metaphors.

Every company paying attention to the market in 2005 would have been eagerly pursuing corporate buyers of PDAs and aiming complex products at enthusiastic PDA users.

And yet, non-consumers should also not be trusted with their opinions. Most early surveys would show that the vast majority of consumers found that mobile phones were not good value for the money. Later the same audience would declare that smartphones were not worth buying.

There are many voice-only users in the world who are happy with their products and not interested in any new options.

So what’s a marketer to do?

If you can’t ask early adopters and you can’t ask non-consumers for hints then where can clues be found?

What history shows is that consumers have been happy to trade up to technology that offers more option value.

  • Television went from cheap/free over-the-air broadcast with limited channel options to expensive cable with large option value in channels. Even if most of those options went unused, they are still valued.
  • Telephony went from low cost reliable landlines to high cost, less reliable but with much more option valuable mobility. Having the option to call a person vs. calling a place (where a person might be) changed the calculation of whether you make the call. Calling became much more popular.
  • Data as well went from metered dialup to unmetered high option valued broadband. From a luxury, to the least likely service an unemployed user might give up.
  • Emerging market users hungered for mobile phones even though they cost more than several months’ wages because they gave access to information and increased the option value of their labor.

Each of these huge technology transitions came associated with increased costs for the consumer, but that cost went toward the purchase of a far larger option value.

The problem is that users cannot calculate option value in their minds when faced with a market research questionnaire. How can they envision all the ways they would use a new product they’ve never used before? How can they “get it” without observing it in use or spending time thinking of “how they would use it” or asking someone who tried it? In a nutshell, users are willing to pay for option value but can’t envision or quantify this value without observing a finished, polished product in use.

This is the problem faced today by branded phone vendors. Asking or observing current users of smartphones does not provide any incentive to sell low end versions. Asking or observing non-consumers seems to indicate no interest in newfangled complex or costly products.

But the calculus that must be made is one of option value. Does the new product offer significant option value? Will this option value be easily realized? This is not easy to determine, but it’s a method that is far more promising than asking users their opinion.

The PDA was not a product that was introduced by the incumbent computer vendors because their customers did not ask for it. Once established, the PDA was not replaced by a product that PDA users asked for either.

Smartphones are following this well trodden path. The high end devices are evolving into computer replacements nobody asked for (but everybody will use). The low end products are adding data option value to voice-oriented users who never asked for anything more.

  • http://twitter.com/johanejohansson @johanejohansson

    Good points! I'd say that, sans the historical details, your example with the PDA would be just as valid if "PDA" was replaced with "iPad". Evolution comes from iteration and iteration is greatly helped by user feedback

  • http://twitter.com/johanejohansson @johanejohansson

    Revolution (or "drastic evolution", or whatever the opposite of iteration is) however is contrary to evolution by definition.

    • Dan

      I see what you are saying here, but it shows a lack of understanding of what evolution is. Evolution is not defined by the speed or degree of change. Evolution is simply the adaptation to the current environment. Large and sudden changes in environment will cause sudden and large evolutionary changes. Anything else and the species (or product) would simply die before they are able to adapt (and many do). The ability to rapidly adapt to changes in environment is one of the most advantageous characteristics that a species can have and is one of the big trade offs between being big and complex (dinosaurs, mammals, Microsoft c 2010, etc..) vs being small and simple (bacteria, microbes, Apple Inc. c 1999, etc…).

      Sorry to go on, but lack of understanding of evolution is a source for much of the disinformation that abounds.

      • davidwlocke

        Evolution is a broadband collection of test for fitness to the environment. There is no adaptation. What happens is that the unfit die out. The environment changes and those species not already fit for the new environment die off leaving only the fit species.

        Every niche has been produced. Every produced component is consumable and is consumed by a consumer. A species can be narrowly fit, or broadly fit. The narrowly fit tend to die off.

    • davidwlocke

      Punctuated equilibrium leads to local speciation that not yet survived globally. Global evolution requires the escape from the isolated narrow, niche where speciation occurred.

      From a technology adoption lifecycle perspective the move to task sublimation and beyond that to embeddedness has been demonstrated time and again. This is not new for PDAs.

  • Robbo

    Great article! Very insightful with ideas that I don’t hear anyone else debating. Keep up the good work!

  • FalKirk

    "…early adopters are not the audience that should be consulted on how to improve the product."

    How insightful this and the rest of your article is. Congratulations to Asymco. You continue to force me to re-think my assumptions and see things in a new and better ways.

  • http://twitter.com/aegisdesign @aegisdesign

    I'm not sure the PDA and mobile phone market is analogous. At it's height the PDA market was selling around 13 million per year not the 100s of millions predicted. It's difficult to put an exact figure on that as some analysts included smartphones in that figure back in the early 2000s. That's half of what Nokia sold last quarter alone as smartphones. ie. the PDA market never really 'took off'.

    Many more people see the value in smartphones than they did in PDAs back then, which were frankly not that useful then.

    • davidwlocke

      The lifecycle of any technology, not just high tech, undergo adoption, a sociological process when moves the technology through successive populations. When an idea is adopted it becomes a tool for the tool maker, then the tool user, then the user of hidden tools.

      PDAs were aimed at code geeks, aka tool makers. Smartphones were aimed at the user of hidden tools. These were entirely different in terms of the their locations on the technology adoption lifecycle.

      We confuse the matter by thinking that the Early Adopter is the same person in every category. Instead, every phase of the technology adoption lifecycle has its own Early Adopters. Camera geeks, phone geeks, and code geeks are similar, but different.

  • WaltFrench

    Link comes up bad and the site's search/tag function seems inscrutable. Got another? Is it really worth it?

  • Davel

    Nice article.

    My take is this. Apple looked at the phone market and imagined what would I like a phone to do? They then set out to build it. All other players you mention are doing dot releases of current products.

    As you have mentioned before the iPhone was disruptive. Thus industry didn't believe because collectively they have no vision. Corporations typically are risk averse so thinking outside the box is suppressed.

    The consumer cannot be trusted to tell you what they want.

    They need a demo. You have to show someone what is possible in order to get them to give you a valuable response. Steve Jobs is good at looking into the future. He immediately saw the value at Xerox Parc.

    And yes. A phone is a computer. It always has been. It is just now it is more obvious.

  • newtonrj

    Thoughtful. It occurs to me that in the 4 different releases of iPhone, we have seen more dot changes than leap-frog. iPad, for all the rumors, seems very modest improvements, abet due to production limitations not Imagineering. iPod does seem to jump around and lead users though.

    It is almost time for SJ to introduce the Apple ecosystem solution where devices are interconnected, interdependent and muse worthy. To 'employ' existing tech purchases in a new 'job'. Side-step the competition yet sell something we didn't realize we needed.

    Horace – Thanx for sharing thought-provoking & insightful articles. -RJ

    • Dick Applebaum

      "It is almost time for SJ to introduce the Apple ecosystem solution where devices are interconnected, interdependent and muse worthy. To 'employ' existing tech purchases in a new 'job'. Side-step the competition yet sell something we didn't realize we needed. "

      This is prescient! The "Apple ecosystem solution" is about easy access to content — regardless of where that content resides or which [Apple] devices are used to access that content. What Apple delivers is results! What Apple sells is the means (devices, services, hardware and software) of attaining these results.

      Each time you buy an Apple product or service, you are investing in an additional component of the whole (Apple ecosystem) — like adding sub-woofers to the home stereo to improve the listening experience.

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  • dchu220

    Congrats on getting Fireballed and named Gruber's favorite new blog of 2010!

  • James Katt

    @newtonrj: The original iPhone then the iPhone with apps were completely disruptive to the entire mobile phone industry.

    And before the iPad, there was NO tablet industry – just losers. The iPad is completely disruptive to the Tablet PC industry. It destroyed Windows Tablets. It killed numerous other tablets. Despite the silmilarities between the iPhone and iPad, the iPad is a completely new and disruptive product to the Tablet PC industry.

    And it even threatens, along with the iPhone, the handheld electronic games industry. There the iPad and iPhone and iPod Touch are Killing Sony's Playstation Mobile and Nintendo's DS.

    The iPad is NOT a modest improvement in its target industries. It is a killer product that everyone is trying to emulate. Just ask RIM.

    • Steve

      When the iPhone came out, I tried to tell my colleagues what a game changer it was. They thought it was a dumb looking phone. I tried to tell them it was a network device that happened to have a phone app. They didn't get it.

      The same thing will happen with the iPad. Remember the first gen iPhone? It only had Apple apps! The folks building iPad killers are falling victim to one of the classic blunders – The most famous of which is "never get involved in a land war in Asia" – but only slightly less well-known is not to aim AT a moving target. ($1 to Vizzini)

    • Hamranhansenhansen

      iPad is the first mobile PC. It disrupts everything that is either mobile or a PC. Other mobiles look underpowered and inflexible, other PC's look like huge battery hogs. And it will be the only mobile PC for a long, long time. Other so-called tablets lack the PC class screen (10-inch or bigger), PC class apps (native C), and PC class Web (1000 pixels wide), so they end up replacing phones, not PC's. For example, Samsung Galaxy Tab has a 7-inch screen, Java applets, and shows a phone rendering of the Web at 1.5x scale, unlike any PC. PC's are really disruptive because native C apps and Web apps on a full-size screen can do anything. My iPad replaced audio mixer control surfaces in a music studio, not only for less money, but in 20% of the size and wireless. It replaced a portable audio multitracker and has higher capacity and much longer battery life and much better UI. There are very few electronic devices that are safe from iPad.

  • Nick

    Another conclusion could be that these phone builders failed to adequately account for Moore's law. There's talk of limited power density but nobody seems to consider that between 1999 (first Blackberry) and 2007 (first iPhone) those numbers would improve approximately 3000 to 5000%. The iPhone was impossible in 1999 but not in 2007, however by then the established players had discarded that direction.

  • http://twitter.com/troed @troed

    +1

    "It's not about smartphones": http://blogs.sonyericsson.com/troedsangberg/its-n

    (Includes references to the Sony Ericsson P800 – a touchscreen apps phone with full web browser in 2002)

  • Jeff Faria

    This is well done. Many of these ideas could be applied to marketing and product development in general, unrelated to smartphones, PDAs, or technology. Of course, tech does pose a particular and fairly unique (but not COMPLETELY unique) problem: How do you develop a product or service that is unlike anything on the market? How can you know if consumers want it if they cannot tell you they want it, because they have never seen it?

    Of course, what you have to do is extrapolate from things that DO exist, from needs known to exist, and from the gut. You also observe tests where they interact with your product – but you have to read between the lines. (Most product managers are not especially good at this.)

    • Hamranhansenhansen

      You're describing design. That's why companies should hire designers (like Apple), not product managers (like Microsoft).

      • asymco

        Sadly, many employ lots of designers. It's not just hiring them but integrating their work into decision making that's hard.

  • http://twitter.com/melvinwalker @melvinwalker

    I believe it's Steve Jobs who likes to quote Henry Ford, to wit: "If I had asked customers what they wanted, they would've said 'a faster horse.'"

  • Steve

    Two quote from Steve Jobs:

    You can't just ask customers what they want and then try to give that to them. By the time you get it built, they'll want something new.

    It's not about pop culture, and it's not about fooling people, and it's not about convincing people that they want something they don't. We figure out what we want. And I think we're pretty good at having the right discipline to think through whether a lot of other people are going to want it, too. That's what we get paid to do.

  • Steve Ballantyne

    It wasn't all hardware, though — the probability that there would be apps (even if they were initially presented as web apps at the iPhone's first release) was what sold the iPhone to this non-standard consumer. As a previous owner of a Nokia 9300 Communicator I was severely disappointed by the inaccessability of software for the device and Nokia's apparent lack of interest in promoting additional software or even any user-friendly way of programming it. By comparison the Palm and Handspring PDAs I'd used before had much more software available for them, although that was nothing compared to what's accessible through the iTunes app store.

    I see I have 184 apps currently on my iPhone — does anyone know how this compares with the average? Whatever the case it's pretty clear that for this user at least the iPhone app "ecosystem" is a key component of the deal.

    • Dick Applebaum

      We have 533 apps in a household of 5 iPhones (3 SIMless- used as iPod Touches) and 2 iPads.

    • Hamranhansenhansen

      Yeah, iPhone is 90% software. The iPhone hardware is akin to a picture frame or a planter, very secondary. It's a case for software, or a handle with which to hold software. Many people cannot wrap their heads around this.

  • Dick Applebaum

    Really enjoy your articles!

    I have a suggestion for a future article, say this time 2014:

    The parable of the the iPad: predicting the future of computing.

    As a seed to this article, assume that the technology will exist to have a mobile device with:
    — iPhone size, weight form factor (or smaller)
    — computer power > today's desktops
    — Universal wireless bandwidth > today's cable providers
    — 1 month battery life with full usage
    — $500 price in 2010 $
    — a resizable touch display

    The last item, "a resizable touch display" is "where the puck is going to be" — and will revolutionize several industries as we know them.

  • http://amanwithaphd.wordpress.com/ Richard Gayle

    Look up 'Diffusion of Innovations' in Wikipedia and examine the accompanying graph. Too many tech companies think their customers are simply the innovators and early adopters. These people love new stuff, even if it is not useful. But the big market is in the middle, made up of the people who only love useful stuff, even if it is not new. They usually only adopt something new if they can see how it will help them at work or play. And they do not really understand how to design new products to do that. They just want better 'old' products.

    Designing something for the early adopters often results in products that the middle does not understand or need. Designing for the middle results in things that simply modernize the look of old, useful products.

    Apple's genius has been its ability to demonstrate to the bulge in the middle how its high tech products can be useful, while also being totally new. They provide better 'new' products that solve 'old' product problems in ways that make work/play easier, while also producing devices that excite early adopters. It is as if they act as mediators in a market conversation between early adopters – who can describe problem solving devices – and the middle – who really only want to use them. Companies like RIM, Microsoft, Nokia, and others seem incapable of doing this.

    Why is Apple the only company that seems to be able to consistently facilitate this conversation, in ways that drive innovative change? Few other companies connect the wants of the early adopters with the needs of the middle. They seem to pick one – producing innovative products the early adopters want but few others or repackaging the old to give the middle what they need but little else.

  • Gromit1704

    In the mobile music market, the phone market and now the pda market, Apple have had the advantage of not being incumbered by old thinking and a linea legacy. They came to the problem with fresh eyes and a clear understanding of what was possible technically. In a way, Apple were incredibly brave with the first iPhone as it was so far advanced from any previous phone. It worked different, it operated different and there was a bit of a learning curve to make the thing function. However, the user was quickly rewarded for their perceiveriance by being able to do some pretty smart and useful things.

    Other phone and pda manufacturers had gone down a cul-de-sac and had reached the end the journey. Touch was available to them all, and they had either rejected it or bodged its introduction. Apps had not been regulated, so if you invested time learning one, it did not mean you would know another one. And the web, was so poorly implemented on devices prior to the iPhone that the experience was at best fustrating, and in practice virtually unusable.

    Apple was able to think out of the box, and solve a lot of the basics. Couple with fortunate good timing in the data networks being able to deliver more (I am in the UK, so no AT&T irony intended) and battery technology had been honed with the iPod, Apple were able to deliver a product that was 5 years ahead of the incumbant smartphone manufacturers at the time. Even now, four years later, many are still way behind.

    Apple currently has a culture of innovation and daring (verging on over conidence). Let's hope this continues and they do not get stale like Microsoft, Nokia etal.

  • Rick

    Saying Apple pioneered the PDA with Newton is like saying touchscreen phones were pioneered by LG Prada. Newton was one of the biggest tech flops in history.

    • Hamranhansenhansen

      PDA's were one of the greatest tech flops in history. Doesn't change that Apple was there first, by definition: pioneering. The people who started Palm were previously making Newton apps. Graffiti was a Newton app 5 years before it ran on Palm. The ARM chip was created for the Newton. You can look this all up.

      In the same way that iPad has outsold all previous tablets, iPhone has outsold all previous PDA's, so by your way of thinking Apple pioneered tablets in 2010 and PDA's in 2007. Makes no sense.

      • http://twitter.com/aegisdesign @aegisdesign

        Er, the ARM processor was used first in Acorn's replacement for the BBC Micro in the 1980s. It wasn't designed for the Newton. The Newton originally ran AT&T's Hobbit CPU before switching late in development.

        And people like Psion and Sharp were shipping 'PDA's as early as the mid 1980s way before the PDA acronym was dreamt up.

        Apple wasn't there first in either case. It's a pity the Newton was cancelled. Personally, I find it a much more intelligent OS design than iOS or any of the other desktop-shrunk-to-fit-a-phone OSs we have today with really dumb UIs for stupid people. Equally, some of the stuff Psion were doing with EPOC back in the Series 5 or Palm were doing back in the Palm Vx days was truly good.

      • Kristian
      • http://twitter.com/aegisdesign @aegisdesign

        Perhaps Hamranhansenhansen should read that. I already know most of that. Back in the day, we had a BBC Micro with a pre-production ARM second processor before the Archimedes shipped.

      • Kristian

        You have to always remember that Apple was/is the driving force behind the company called ARM Holdings. There were 3 companies who started ARM ie. Apple, Acorn and VLSI.

        So when you say 'ARM chip was created for the Newton' you can replace it and say that 'ARM was created by Apple and for the Apple' ;)

        Apple does not need to buy ARM because they already own and rule/control the company 'Deux Ex Machina'.

      • http://twitter.com/aegisdesign @aegisdesign

        This is just not true. ARM *was* started by Acorn, Apple and VLSI but Apple only had a small share in the company and sold most of their share in the late 1990s when the Newton was cancelled and the rest was sold mostly in the early 2000s when Apple's finances were dire. I'd be surprised if they have more than a few percent stake in ARM today.

        Apple was never the driving force behind ARM and still isn't. ARM Holdings Ltd was created to separate the chip design company out from Acorn Computers Ltd so that the ARM CPU was more palatable to other computer manufacturers.

        You're right that they don't need to buy ARM though but that's because they licence the design. That's how ARM works. They're a fabless chip design company that licences the design to other companies like Apple, Samsung, Ti, Broadcom etc.

  • patricia

    I worked in telephony during this era. It was just early for the market, just like the smart phone market now, no thanks in part to the enormous degree of ignorance about the internet, why it is here and ultimately what to do about it.

    Also as an FYI — the internet platform isn't just 'mobile.' It's device agnostic — it can go into anything. All would be wise to see it this way as a tight fixation on "mobile" will put you at a disadvantage in the future.

    • Hamranhansenhansen

      Yeah, but people are mobile. Once you go to a mobile phone or mobile PC (iPad) you don't go back to the non-mobile. Ethernet is by far the fastest and most reliable Internet connection and also the least desirable.

      • http://twitter.com/aegisdesign @aegisdesign

        That rather depends on what you use your computer for. I've sure developers, writers and accountants would just love to be stuck with an iPad to work on.

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  • Paulo Silva

    Looking at what one usually do with an iPhone, we can say that it is three devices in one: a phone, a communicator (email, web, etc, extending Nokia communicator concept) and a mobile computing device (going much farther than PDA idea).

    I guess that's what brought value to the customer. And when users saw it, then they realized its potential and usefulness. Add to the pot a terrific multitouch UI and a thriving ecosystem that provides users with tons of good apps. So the smartphone era was reinvented (or re-founded). And competitors are struggling to catch up!

    • http://twitter.com/aegisdesign @aegisdesign

      I think it's mostly Apple's UI (using a finger instead of stylus was genius) and Mobile Safari being the first mobile browser that was any good.

      The iPhone itself is pretty terrible feature wise but as Apple fans will point out (I'm sure) it's not about features but how well they are implemented. I'd point out that Apple has a history of implementing simple interfaces well but then losing the plot when they realise it needs to be a bit more complex than that. You've only got to be a Mac user to witness this trend over the years in Finder, iTunes and iPhoto.

  • Hamranhansenhansen

    The other thing is most companies are siloed and think one quarter ahead, while Apple is one big team that thinks 20 years ahead. Apple had to port Mac OS to iPod to make iPhone, that alone would be impossible at most companies because they would be separate divisions who would not cooperate. Steve Jobs was running the first iPad in 2003, and he sent it back for more work for about 26 quarters before introducing it in 2010. Who else is going to do that?

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  • mikecane

    This ignores the fact that the iPhone brought drastically different ways of doing things. It was not evolutionary from the existing market. It overthrew the existing market with fingertip scrolling, pinch zoom, on-screen-only keyboard (which was also fingertip-usable), and more. It was a discontinuity, period. So expecting early adopters to also be *product visionaries* is just asking too damn much.

  • Andrew

    I was an "Early Adopter" – and Palm didn't listen to me:

    So early that my first Palm did not have a backlight. Even so, all of us that used the first Palm devices knew where we expected it to go.

    I do not believe that it was Palm users who "rejected the concept of a PDA with an integrated mobile phone", and delayed the smartphone industry by the 5 years between the introduction of Handspring's Treo and the iPhone.

    We knew that the Palm PDA could play music, just not quite as well as other MP3 players, we knew that the Palm PDA could browse the internet, except that it needed specialised browsers and we knew it could become a mobile phone. We were using our contacts and schedules and syncing them between PDA, desktop and some other maker's mobile phone, often with Apple's help (iSync). All of this opportunity was Palm's to take, but Palm did nothing and Apple took it all. Starting with the iPod ……….

    And now that Paulo Silva reminds us about "three devices", let's also remember how Steve Jobs introduced the iPhone: Apple® today introduced iPhone, combining three products—a revolutionary mobile phone, a widescreen iPod® with touch controls, and a breakthrough Internet communications device ……………

    So what's the REAL lesson here? If you and your company do not understand totally what was good about the iPod and why people dumped their other MP3 players, if you do not understand what people see in the iPhone and why they are dumping their old phones even if they don't really know what the iPhone can do, then you should either find a way to bow out of the industry gracefully or go down in flames.

    • asymco

      It's hard to generalize but I recall that Palm's founders left to start Handspring because they could not get the company to build a smartphone. Is it possible that Palm as a company was rejecting both the pleas from its founders and from its customers?

  • SubGenius

    @Rick although it was a commercial flop, the Newton was a technological success. It took time but by the end it had matured into a very advanced device.
    Steve killed it because it lacked the holistic design required to make it a commercial success.

    A major key to Apple’s success is that it is one of the few companies that has truly mastered software engineering, hardware engineering, industrial design and marketing. Most companies are only competent in one or two areas.

    Google is a great example:
    Great software engineers
    Hamstrung because they don’t get UI design.
    They don’t have great hardware engineers.
    Their marketing is ok but not as savvy as Apple.
    End result is phones that are technically advanced but normal people don’t like using.

  • res08hao

    This article reminded me that I once owned a HP handheld computer run by Windows CE. What an abomination. The thing never worked right and could barely function. Another worthless Microsoft product.
    If Apple ever goes out of business, my computing days are over.

    SENT FROM MY IPAD

  • alberth

    The iphone wasn't merely a big battery with tiny logic board. Existing cellphones had 3-4 watt-hour capacity. The iphone has a 5 watt-hour capacity – hardly an earth shaking improvement. No, what was revolutionary about the iphone was packaging a fully-capable computer with a finger-only interface, including an MP3 player, a web browser, a camera, and here's the kicker: a calling plan that didn't lock out ridiculous features or upgraded capabilities. Remember paying for ringtones, getting photos off the phone, seeing ads? Apple was able to solve all the complaints that prior companies compromised on in one fell swoop.

  • alberth

    One of the biggest stumbling blocks to understanding these devices is the name "smartphone". It's no more a better phone than earlier Nokia cellphones were better wristwatches. Those earlier Nokia cellphones made mobile phone calls and incidentally did the trivial task of timekeeping as a side job (and related clock functions: resetting to new timezones, wake up alarms, stopwatch, timers). iPhones indeed can make phone calls, but this is incidental to other tasks as internet browser devices, game & music platforms, still & motion cameras, GPS units, etc. In the future, the ability to make a phone call will be no more defining a feature than telling the time is today.

    • asymco

      This is one reason I'm trying to move the naming from smartphone to mobile computer. Not as catchy, alas. We need to start thinking about MCs (vs. PCs). Or how about renaming PCs immobile computers?

  • http://twitter.com/gyurisc @gyurisc

    The shacknews url seems to be broken. Awesome article! Congratulations and Happy New Years!

  • Paulo Silva

    @Andrew

    Note that SJ didn't say 'a mobile computing device' and that's a big point. When iPhone was introduced there weren't third-party apps neither a SDK available when iPhone launched (some say Apple were still baking the SDK at that time).

    Maybe users weren't interested in mobile computing and all what they wanted were just to access the internet on their phones. But, in fact, today's users want games and all sort of apps on their phones. Having a phone and an ipod on their device is OK, but it's not considered to be a main feature anymore.

    People need a mobile phone and integrating other functionalities was (is) the way to go. So, in theory at least, we could take these devices apart, just because they don't necessarily relate to each other. But having them integrated in one simple device is much more practical than carrying two or more devices along.

    The only way to yestarday's communicators and PDAs were to be blended with mobile phones. And users knew it. I remember some years ago when I was trying an N810 at a Nokia store and a guy next to me kept saying 'but that's not a phone!' as to warn me not to buy a such isolated device.

  • Ziad Fazel

    If you want a good source of product ideas to guide your development over the next decade, try science-fiction.

    I'm watching a re-run of a documentary (albeit first time for me) which has some examples:
    http://en.wikipedia.org/wiki/How_William_Shatner_

    I wonder how many product developers are watching shows like CSI now, sniffing consciously at the hokey technologies (and dialogue and direction), yet subconsciously absorbing concepts to prove in coming years. I groan now at Captain Kirk's reaction shots, set to overly dramatic music, but marvel at the technology faked in Start Trek that exists, and makes stupendous profits, now.

    I don't think learning from early adopters is always bad. There are those with vision, whether inspired by sci-fi or some other experiences, who buy your product for its potential to achieve that vision, and ask you to achieve that vision. You learn from them about use-cases, alternative interfaces, and enabling technologies. Then there are those who simply create tables of features from competing products, and blindly criticize you for not having feature J or Q from other products. They influence you into making bloated, buggy products that arrive later to market than needed, and confuse customers with counter-intuitive combinations of features from unrelated products.

  • Bill

    Regular people bought cell phones so they wouldn't need to wait at home to try to call other people who were also at home; as more people bought them, this strategy worked even better. The problem was (is!) that mobile telephony seems to be impossibly difficult to accomplish with the same uptime/call completion rate as a phone wired into your house.

    Which is easier? Improve cell phone networks so you can reliably place a call, or provide people with cheap game machines to amuse them when their "phone" doesn't work as a phone? I think the answer is obvious. Apple even went so far as to provide a hand-held tablet computer that sometimes functioned as a phone; it sold really well even though it wasn't cheap.

    I think Blackberry sold well to business users because non-real time ASCII text mail messages can be sent with much greater perceived reliability than a real-time phone call.

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