Announcing a new survey of iPhone users

I think it's safe to say that the iPhone is the most publicized new mobile product of the last several years, especially in the United States. But although there has been endless commentary on the iPhone, there hasn't been much solid data on how it's being used, and what impact it's having on the industry.

At Rubicon, we set out to fix that by conducting a quantitative study of US iPhone users last month. We released the results today at CTIA. You can read the full results on the Rubicon website (link). Here are a few highlights:

--iPhone users we surveyed are very satisfied overall with the product, and report that they're making heavy use of features like e-mail and browsing. This is driving higher mobile phone bills, producing about $2 billion a year in additional revenue for AT&T.

--Users are not universally satisfied with everything about the device -- about 40% report that it can't display all the websites they want to visit, and many also said they would like to see physical changes to the product, such as the addition of a bigger screen or a thumb keyboard.

--Users are young Apple veterans. Half of US iPhone users are under 30, and 75% are prior Apple customers.

--The iPhone is expanding the smartphone market. About 50% of iPhone users replaced conventional mobile phones, while 40% replaced other smartphones. The Motorola Razr was the conventional phone most often replaced, while Microsoft Windows Mobile devices and the RIM Blackberry were the smartphones most often replaced.

--Email is the #1 function. The most used data function on the iPhone is reading (but not writing) email, with about 70% of users doing that at least once a day. About 60% said they browse the web on the iPhone daily.

--The iPhone increases mobile browsing. Over 75% of iPhone users say they do a lot more mobile browsing on it than they did with their previous mobile phone.

--The iPhone drives carrier switching. About half of iPhone users switched carriers to AT&T when they obtained the iPhone.

Please note that although I usually post an April Fool's message today, this ain't it. The timing at CTIA made today the best day to release the study. It's completely genuine.

Amazon Kindle: Not a home run, but an interesting start

By now I assume you've read about Amazon's Kindle e-book device. I think it's interesting and important, but more for its business infrastructure than for the device itself. And I'm not at all sure that it'll be a commercial success, unless it gets a lot more content quickly.


What they announced

Kindle's hardware is a lot like that of the Sony and Iliad e-book readers. I won't bother repeating all of the specs; you can find a good summary on Engadget here and here and in a lengthy Newsweek essay here.

The industrial design of the device looks uninspiring to me. It's made of white plastic, a color scheme that most people associate with ease of use, low price, and limited features. Considering Amazon's strong emphasis on ease of use in its announcement today, I guess the color makes sense, but it's at odds with the $399 price.

I haven't touched a Kindle yet, so maybe it looks nicer in person. But in the photographs its sloping edges and slant-key keyboard do nothing for me. It looks a bit like a badly-carved wedge of Parmesan cheese. There are a total of 54 buttons, controls, and keys on the face of the device, so naturally it looks cluttered. There's virtually none of the lust-inducing elegance of the iPhone; the design screams "utilitarian."

"Is it just me or is that thing one hell of an ugly thing to walk around with?" --Comment posted to Newsweek's article on the Kindle

The design is not necessarily a bad thing; the device is going to live or die based on its usefulness, not its looks. But the lack of a lust factor makes people much more willing to nit-pick its features and price. So far Kindle is rated 2.5 out of 5 stars on Amazon's own website, with most of the negative ratings coming from people who have never even touched the device.


Clever wireless, vulnerable business model

Interesting use of the network. Things get a lot more elegant when you look at the services attached to Kindle. Amazon has built in a radio that talks to Sprint's EVDO data network. Wireless is used to deliver almost all content to the device (except for MP3 files, which sync via a USB cable). This is both attractive and disturbing.

The attractive part is that Amazon can pre-test each Kindle device to make sure they connect to the Sprint network before they get shipped to the customer. This is a huge advantage over WiFi. One of the dirty little secrets of WiFi is that non-PCs often have a lot of trouble connecting to WiFi routers in homes and offices. I don't know why this happens, but I suspect it's because the router vendors test their hardware mostly against PCs, and never find the bugs in connecting to other devices. Trouble-shooting a Kindle that couldn't find the network would be a nightmare, and Amazon has bypassed the whole issue by leaving WiFi out of the device.

I also like Amazon's decision not to hit its users with a monthly fee to access the network. Instead, the charges are embedded in the cost of downloaded content. This means that users who buy a lot of content will be subsidizing the ones who read only a little, but Amazon has hidden the charges so well that I don't think anyone will notice. Kindle makes the wireless network do what it should do: Disappear.

I have two worries about the use of EVDO. The first is that if someone lives outside of network coverage (like at my house) their Kindle won't work properly. I would have preferred to see WiFi included as a backup. The second problem is that because Amazon has to pay for that wireless connection, it has to tax virtually any information transmitted to the device. You can load documents onto the device by sending it an e-mail, but you'll pay 10 cents for every message. That doesn't sound like much, but it's annoying to have to pay anything at all for something that's normally free.

Likewise weblogs: You have to pay $1-2 per month for every weblog that you want delivered to your device. That's understandable if you look at Amazon's expenses, but it's astonishing for something that's free on a PC. What's worse, the most enthusiastic readers -- the people most likely to buy Kindle -- are the people likely to be scanning 20 blogs a day. They won't pay $20-$40 a month just to read blogs.

One workaround would be to subscribe to an e-mail blog aggregator like Feed Blitz and have it send a daily digest to your Kindle. That'll presumably cost 10 cents a day -- $3 a month, for unlimited blogs. That is, assuming Amazon doesn't put a size limit on the messages sent to Kindle.

The relatively closed nature of Kindle has led to some angry commentary on ebook enthusiast sites that you'd expect to cheer the product. For an example, there's an essay on Mobile Read here.


Self-publishing: Nice idea, but...

I was delighted to see that Amazon is allowing authors to self-publish e-books for the Kindle. You just submit them to the Amazon Digital Text Platform, set the suggested price, and Amazon adds them to its catalog (link).

The catch is that Amazon pays you only 35% of the suggested price of the book (link). They keep 65% -- for the amazing service of adding your book to their catalog (basically, they shift some bits around on a server). And by the way, if there is any bad debt, Amazon doesn't pay you any royalties at all on that sale, even though they're the ones who failed to collect.

By comparison, Apple takes 30% of iTunes revenue, and NTT DoCoMo takes about 11% of revenue from content and apps sold over its network.



I'd love to hear from the folks at Amazon if there's a reasonable business justification for keeping such a huge cut of self-publishing revenue, but I think it's probably for two reasons:

--Amazon is greedy, and/or

--They don't want to completely undercut the royalty structure of print publishers (who typically pay up to 15% royalties on a printed book)

Either way, Amazon's royalty structure is outrageous. And it won't last. One of the most important aspects of electronic publishing is its ability to change the wretched economic structure of the industry so authors get the majority of the revenue for their work (I've written about the economics of it here). The change is inevitable, and if Amazon tries to hold its current royalty structure it'll eventually just drive people to other e-book platforms that don't rip off authors.


Will it succeed? It's the content, dummy.

All of the issues covered above will affect the success of Kindle, but ultimately the sales of an ebook reader depend on having a huge library of reasonably priced content -- books and periodicals. Lack of sufficient books is what killed the last generation of ebook readers, Rocket eBook and Softbook (I worked at Softbook for a short while, so I saw the situation there first hand).

Judged by that standard, Kindle is off to a surprisingly mediocre start. There are some promising signs. For example, people don't like paying hardcover prices for intangible ebooks, so Amazon is pricing current best-sellers at $9.99, compared to about $15-$16 for hardcover. There are hints in some articles that Amazon is even subsidizing some books to hit this price. The price difference isn't big enough to make people buy Kindle, but it helps to overcome resistance. Good move.

The problem is in the library of other books. Or I should say the non-library. There are supposedly about 90,000 books available for Kindle currently, which sounds like a lot but actually makes for a poor selection. To get an idea of what was available, I took a quick look at the titles available from several prominent science fiction authors -- Niven, Brin, Asimov, Simak, Vinge, etc. (hey, I work in the tech industry, that's what I read). The selection is quite bad -- for many authors, the only Kindle editions are their second-rate books. Or there are a bunch of individual short stories available for 99 cents each, but not most of the novels. I strongly suspect that Amazon is counting each of those short stories as one of the 90,000 "books," because they are all labeled as books in the website. If true, that means the actual number of real books for the device has been heavily exaggerated.

Try the test yourself -- go to the search page here and type in your favorite author's name. Let me know what you find. Maybe fields other than science fiction have a better selection. I hope so.

There's nothing that makes an ebook customer angrier than paying $400 for a device and then finding that most of the things they want to read on it are not available. The iPod succeeded even though a lot of songs were missing from iTunes at first -- but remember that people could rip their own CD collections, and install MP3s for free. Amazon doesn't have a base of content that its users can shift to the reader, and it charges money for any document transferred to the device. So it has to fill the library on its own, quickly.

I think Amazon has a lot of work to do here.

I'm intrigued that about 16 newspapers and magazines are available for Kindle. Unlike books, newspapers and magazines are viewed as disposable, so people are less resistant to buying them electronically. And getting instant delivery of a weekly magazine is a significant advantage over waiting a few days for it to appear in the mail.

Judging by Amazon's price to receive the San Jose Mercury News (Silicon Valley's Incredible Shrinking Newspaper) on Kindle, prices are about 40% less than print subscription. That's not bad. What I don't know is whether the Kindle editions of the papers and magazines will be the full text of the print version, or just excerpts. If anything's left out, people will be turned off.

Amazon must get a critical mass of content -- meaning a lot more magazines and newspapers, and rapid growth in books. If it can do that, Kindle may finally jump-start the ebook industry. It won't explode overnight, but Amazon has a long history of forcing its investors to wait years for the full payoff on investments. If Amazon can maintain that patience, I think it Kindle has a chance.

But I sure hope they make the next version of it look nicer.

The deceptive allure of the sub-PC

Something I wrote for Rubicon Consulting:

The cancellation of the Palm Foleo marks the latest in a long string of failed attempts to create a market for keyboard-based devices that are smaller, simpler, and cheaper than personal computers. Computer companies have been trying to make sub-PCs work since the 1980s, but the only place I know of where they have been a major success is in Japan, where the complexities of typing in Japanese encouraged many people to buy cheap word processors instead of typewriters.

Why do so many companies keep trying to get under the PC market? And do they have any chance of success? The answer is a lesson in the right and wrong ways to think about product strategy.


Listening to the customers

Anyone who has ever done research on PC users quickly notices a striking pattern--most of the features of a PC rarely get used. Here's a typical result from a research study asking US adults which applications they use at least once a week on their home PCs...

You can read the rest of the article on the company website here. No registration required.

Design lessons from the Nintendo Wii

"Every time we ship product to the market, whether it's in Japan or here in the U.S. or in Europe, it sells out in a matter of days.... If you see one, buy it. Don't assume that you can come back later and find one." --George Harrison, SVP of marketing and corporate communications, Nintendo of America, quoted by Reuters

For a marketing guy, Nirvana is when the world gives you permission to say something utterly outrageous, without anyone questioning it or even believing that it's marketing. Nintendo reached Nirvana two weeks ago.

Coincidentally, that's also when I wandered into the local Wal-Mart, on the off chance that they might have a Wii in stock. I had been looking for one for eight months, ever since my wife shocked me by telling me that she wanted a Wii for Christmas. (This from a woman who has traditionally had about as much interest in video games as I have in quilting. Her only explanation: "It looks like fun.")

Anyway, I walked into Wal-Mart, and sure enough, there was a single Wii box locked into the glass display case. Did I follow Mr. Harrison's "advice," and buy it on the spot? You bet I did, especially after the clerk told me someone else had called the store and tried to reserve my Wii. Tough luck, buddy. Wal-Mart doesn't do reservations. Try Toys-R-Us.

So I bring the Wii home, and now I find that I'm going through stages in my feelings about it, much like the Kubler-Ross model of the stages people go through when confronting grief (link). The stages of grief are denial, anger, bargaining, depression, and acceptance. The stages of Wii (so far) are delight, disgust, and anticipation. I have no idea what'll come next.

The delight stage was all about discovering the controller. There has been plenty written about the Wii's wireless, motion-sensing controllers, but until you actually play with them it's hard to understand how much fun they can be. I set up the system after everyone else was asleep, feeling that it was my responsibility to do some thorough testing that night, so there would be no risk of the family being disappointed if the system didn't work properly.

The first thing I tried was the Wii's tennis game, which was astonishingly easy, and fun. You just swing the "racket" at the right time, and you'll hit the ball. The controller has a vibrator in it, so you feel a little jump when you make contact. But the best feature is that there's a speaker in the controller too, so when you hit the ball you hear the familiar pock sound from your hand, rather than the television. I didn't notice the speaker when I set up the Wii. The first few times I hit the ball, I kept wondering how Nintento had manipulated the TV's stereo to make it seem like the sound was coming from my hand.

The tennis game's graphics are embarrassingly bad (it's like playing tennis against a salt shaker with a head on it), but the gameplay was so fluid and immediately rewarding that I didn't care.

Great new technology products give you a rush, a feeling of empowerment as you realize that you can now do things you simply couldn't do before. The first time I used a Macintosh was all about that. HyperCard was the same. And WordPress came pretty close. The Wii fits in that company because it opens up a whole new paradigm of gaming.

After testing the tennis game tennis thoroughly, my arm started to tighten up, so I decided to try some different games. That was when I entered the second phase of Wii discovery...

Complete disgust. There have been plenty of press reports about people accidentally throwing the Wii's controller through a window when they got too enthusiastic, but I may be the first person who almost did it intentionally. In contrast to the tennis game, some of the Wii's games are infuriatingly bad. The Wii's golf game is ridiculously difficult to control -- I couldn't even get my golfer to point in the right direction, let alone control a shot accurately. Fortunately, the game requires you to give up on a hole after 20 shots; otherwise, I might still be playing. Even a simple whack-a-mole simulation became an exercise in frustration as I tried in vain to position the hammer on the screen.

The common denominator of these games is bad use of the controller. The golf game has several modes, in which you choose direction for a shot, elevation, and so on. The controller's just not accurate enough to make it work. In Whack-a-Mole, the problem is that you're supposed to move the controller like the tip of a joystick -- forward, backward, left, right -- like the slider on a Ouija board. That's OK on a table, but when you're holding the controller in midair your arm gets tired really quickly. Human arms aren't designed to move like that on an ongoing basis.

The ironic thing is that those games actually work pretty well on a traditional joystick.

There's a lesson here about the strengths and weaknesses of integrated systems design. The controller on its own would not have been successful -- it's terrible for controlling traditional games. But the games on their own would also have failed -- bowling was one of the worst games on the Nintendo GameCube, but it's one of the best on the Wii. To get a breakthrough, you have to design the hardware and software together as an integrated system.

But that same integration also presents a lot of challenges to game designers. The Wii requires a thorough rethink of how a game is structured and what you can do with it. You can't just take an existing game, port it directly, and expect it to work well. At a minimum, the whole interface has to be rethought. But really what we should be doing is rethinking what sorts of things you can do in a game. What about a game in which you draw images on the screen using the controller, or conduct an orchestra? I don't know if either of those would be entertaining, but it's the sort of stuff we should be thinking about.

Which brings me to the third stage of Wii discovery...

Anticipation. I have one word for you: lightsaber. Like every boy who grew up watching the Star Wars movies, I've always had a secret desire to play with a lightsaber. Not one of those plastic things they sell at Toys-R-Us, I'm talking about a real lightsaber that makes that buzzing noise and can cut through steel like butter. I'm not sure what I'd use it for -- it seems a bit like overkill for tree pruning -- but I know I want one.

With the Wii, we finally have a device that can make it happen, at least in simulation. Supposedly there's a Lego Star Wars game on the way for the Wii, which will let you control your lightsaber directly. I am both impatient to get it and dreading it. The dread comes because this is a port of an existing game rather than a redesign. Some reports say you won't really have full control over your lightsaber (link).

The disappointment could be crushing, so I'll have to test it before I let the family try it. To protect them.

One thing's for sure -- if it works, my wife's not going to be wasting the Wii on tennis anymore.

Palm Foleo: It's a PC, dummy

Wow, what an interesting day this was in the mobile and web world:

--Apple hinted that it will allow third party developers to add applications to the iPhone, potentially overcoming one of the device's biggest shortcomings (link).

--Google announced Gears, an open source project to enable web apps to work offline -- injecting Google into the growing effort to make PC operating systems irrelevant, and linking Google with Adobe (link).

--Livescribe previewed its pen computing device, the latest in a long series of efforts to turn Anoto's pen sensing technology into a commercially viable product (Livescribe link, Anoto background).

And oh yeah, Palm finally announced Jeff Hawkins' secret project, the Foleo.

A lot of the online commentary on the Foleo hasn't been enthusiastic. Engadget called it the "Foolio" (link). Ars Technica's article was headlined, "Palm officially out of ideas, debuts 1990s palmtop concept" (link). The discussion on the Palm Entrepreneurs Forum (an e-mail list for Palm application developers) was more balanced between admirers and detractors, but even there a lot of people were very lukewarm.

I think a lot of this is Palm's fault. They're trying to position the Foleo as a "mobile companion,"* a device that smartphone users can carry with them when they need a keyboard and bigger screen. In other words, it's for a small subset of the smartphone market, which itself is a small subset of the phone market. A niche inside a niche. The Stowaway keyboard folks should worry.

But I don't think the Foleo really is a "mobile companion." Back when I started to work at Palm (before the turn of the century) one of the old veterans of the company pulled me aside and passed along a little wisdom. "Michael," he told me, "Ya gotta think in terms of real estate. If you're in another device's real estate, you're competing with that device. Palm lives in your pocket; it competes with other things that go in your pocket. If you get bigger than the pocket, you're living in the briefcase, and you're competing with the notebook computer."

Foleo lives in the briefcase. It's displacing the notebook computer from your bag. I don't care what they call it, I don't care if Palm fully realizes it yet, but the fact is that Foleo's a notebook computer.

More to the point, Foleo is the most significant new consumer PC platform introduced in the US since the Macintosh. All you Linux heads who have been asking for a true consumer Linux PC, you finally got your wish.

Wow. That's kind of cool. It may be crazy, but it's a craziness I like. Palm has reimagined the PC for the wireless Internet era, simplifying and stripping away everything they thought was no longer necessary. So since most people carry a phone, you use the phone as your wireless modem. The device also has no hard drive. Since everything is stored in flash RAM, you never actually shut it down -- you just turn off the power, and when you turn it on again all your data and apps are still there, waiting for you. This is normal in a handheld, but it's long overdue in a PC.

"Desktops and laptops were too large, expensive, complex. You're not going to build billions of these complex machines, you build mobile computers....But it became clear the smartphone wasn't going to fill that role....You need a full size screen and keyboard." --Jeff Hawkins, quoted in Engadget

How well will the Foleo sell?

I don't know. It's not the product I would have built (my long wait for an info pad continues). The most successful mobile devices in the last decade have been specialized products that solve one problem for one type of customer -- iPod plays music for entertainment hounds, GameBoy plays games, BlackBerry does e-mail, Palm Pilot does your calendar, etc. The Foleo flies in the face of that. Although Palm talked a lot about e-mail today, the device also has a browser built in, and clearly has ambitions to be a general-purpose computer. I think we should judge Foleo on those terms, not by measuring it against other products we all imagined or wanted. Here are a couple of quick thoughts, and I'll probably post more in a few days after I've had more time to think about it...

Palm can now succeed even if Treo fails. Palm implied that the Foleo will be able to work with any smartphone, not just the Treo. This potentially gives Palm a larger market, and also sidesteps the operators, since Foleo can be sold through consumer electronics stores. Palm execs have been very public in saying that they are happier selling through retail rather than through operators, so today they must feel a little bit liberated.

Beware the Windows CE factor. I have seen many products very similar to Foleo fail over the years, and that worries me a lot. For years Microsoft and the Windows CE hardware companies produced a series of sub-notebooks that looked eerily like the Foleo. Like Foleo, you were supposed to use them to do light browsing and e-mail. They all died quickly, mostly because they looked so much like Windows that people expected them to run Windows apps. When people didn't get the full Windows experience, there was an immediate backlash.

Foleo's a little different because it doesn't pretend to be any flavor of Windows. But the hardware design looks an awful lot like a Windows PC, and that's going to create the wrong impression. Maybe Foleo looks nicer in person, but in the photos it looks like an anonymous gray box, disturbingly like a Dell subnotebook. It doesn't seem to have the lust-inducing look of the Treo 600, let alone the Palm V. I wish they'd made the case more distinctive, or at least a different color, because then people might expect different things from it.

Success probably depends on the apps. Like other PCs, Foleo doesn't do all that much out of the box. It apparently comes with Documents to Go (a well respected suite of Office apps, ported from Palm OS), an e-mail client, and a browser. That's all nice, but it's definitely not enough to make me put down my notebook computer. I think Foleo will eventually live or die based on whether it attracts a lot of third party applications that do interesting things you can't do with a notebook PC.

Palm has been evangelizing a number of developers to create apps for Foleo, but for some strange reason it excluded them from the Foleo announcement today. Instead, the announcements are going to be dribbled out one by one over the next few weeks and months. I presume the idea was that they'd create a sense of momentum, but I think instead what Palm did is make today's announcement less impactful than it could have been.

That means we haven't heard the full Foleo announcement yet. There's more to come from the third parties. We won't be able to really judge the device until we see the totality of what it'll do at launch.

My bottom line, based on what I know today: As a standalone mobile data device, the Foleo is uninspiring. As a potential challenger to the notebook PC, I want to believe, but the proof will be in the third party apps.

_______________

*By the way, the term "mobile companion" is perilously close to "PC Companion," one of Microsoft's early terms for Windows CE devices. The phrase gives me hives, but I think that's just me.

How vs. what: Why so many new tech products fail

Here's something I wrote for the Rubicon newsletter. It's relevant here.

One of the advantages of working as a consultant is that you get to look at the big picture across corporations. You can see trends and common themes that might not be obvious to somebody working in a single company.

A theme that’s become very clear lately is the tech industry’s difficulty telling the difference between “how” and “what” when designing products.

Most of our companies tend to focus on building what I call “how” products. That means products that focus on enabling technologies to let people do a wide range of tasks. For example, building a web browser and a WiFi connection into a product that doesn’t currently have them is a classic “how” move, because it enables the user to potentially do a lot of different interesting things.

As technophiles, we’re all very good at figuring out how to make use of a “how” feature. For example, we’ll say, “Gee, with a browser and WiFi in that product, I can install Skype and use it as a free mobile phone.” Then we’ll go out and find the Skype client, install it, maybe tune the configuration a bit, and sit back in amazement at how cool our industry is.

The problem with the “how” approach is that normal people don’t think this way. They are much more focused on “what,” as in “What does the product do for me?” Because they don’t understand technology at a deep level, they can’t see the possibilities created by a great enabling technology. And even if they could see the possibilities, they don’t have the skills necessary to adapt it to their needs. Even an (allegedly) simple act like pairing a wireless device to an unfamiliar WiFi router can be enough to give a typical user hives.

In competitive situations, “how” products usually lose to “whats”...

To read the full article, click here. (There's no charge or registration required, but I wrote this one on company time so it's only fair that I link back to their site.)

The iPhone is not a phone

Concluding thought on the iPhone (for a while):

Usually I take a few days to think about a mobile announcement before I write it up. That gives me time to read other comments and get my own thoughts settled. But there was so much attention on the iPhone that I posted ideas as I went along. I hope you didn't mind the stream of consciousness approach.

So now it's a week later, and I've come full circle to where I was when I first heard the announcement: I think it's not a phone. It's an entertainment-focused mobile computer.

If you judge the iPhone first as a phone, it's very hard to justify. I think this has driven some of the skepticism that we've seen in online commentary about the iPhone in recent days. The lack of a keypad makes it harder than a regular phone to dial, and SMS will be awkward to use. That's a substantial barrier in the US, and an even greater drawback for a phone in Europe and Asia. (Hey, mobile phones have failed in Europe just for having the keys poorly arranged.) The battery life also looks like it may be disturbingly short.

The price of the iPhone is uncomfortably high for a phone, and Apple's forecast of 10 million units shipped by the end of 2008 is very hard to justify when you look at the total number of mobile phones sold at that price point. Richard Windsor of Nomura, a telecom analyst I respect deeply, predicts that Apple will sell only two million iPhones this year, and at most five million more in 2008. If that happened, Apple could be stuck with more than half a billion dollars in unsold hardware. Windsor writes: "Apple has arrived in the smartphone market but how long it stays remains to be seen."

But if you look at the iPhone first as a mobile computer for entertainment, with phone features added in where convenient, things look very different. The lack of a keypad then becomes a reasonable compromise to get a large screen (great for video and browsing) in a tiny device. The price is still high, but Apple has continuously offered iPod products in the $400-$500 range. The iPhone is close to the price of a high-end iPod, and has a host of additional features. iPod sales have been running at about eight million units a quarter, so ten million iPhones in 18 months is not a ridiculous number. If Apple can get a reasonable percentage of loyal iPod owners to step up to the iPhone, it won't have to attract all that many new users to make its 10 million number.

Remember, Apple owns its own retail channel. So it has a very good idea of what its customers like and dislike.

Far from revolutionizing the phone, what Apple's doing is launching the most ambitious mobile entertainment device in many years. Here's hoping they succeed -- if they do, some other companies might feel encouraged to try bold mobile computing experiments of their own.