verizon – John Morrison – Product Strategy and Brand Identity

In the time I spent working for Apple Retail, I was constantly asked about rumored product releases, and more often than not, the customer asking would fail to believe that we employees didn’t have any sort of advanced knowledge. That really was the case, and even if we did know something, we couldn’t tell them anyway, so why bother asking?

I guess because that wasn’t 100% true.

The thing is, while we almost never had advanced knowledge confirming new products, we were all engrossed by the Mac news/rumor sites. Although we were contractually obligated not to contribute to them, nothing stopped us from talking and speculating to one another during lunch or at the bar after work. As an employee, you get to know Apple’s psychology pretty well, and it was often easy to tell which stories were real and which were fake.

So while we didn’t officially know what was coming down the pipeline, it was often the case that we “knew,” but we still couldn’t talk about it. There is a certain amount of buzz to rumors combined with timing and the company’s actions that would make it clear that something was up.

Recently sites have been talking about the next iPhone being only a mild upgrade and referring to it as the “iPhone 4S”. For as long as it has been around, I’ve HATED this rumor.

There seems to be an assumption that because there was an iPhone 3Gs to follow iPhone 3G that Apple is going to repeat this pattern and even call it the “iPhone 4S”. The major flaw in this conclusion is so obvious it boggles my mind that sites miss it.

The iPhone 4’s “4” in its branding is different than the 3G’s “3”. The 4 in the iPhone 4 represents it being the fourth model of iPhone, whereas the 3 in the iPhone 3G represents the 3G speed of its connection.

Apple is a company tightly fixated on branding. Even if the next upgrade were a small one they simply wouldn’t just slap an “s” on the end of the “iPhone 4” and call it a day instead of releasing an iPhone 5. Regardless of what the marketing name would be, it would still be the 5th model of the phone. They especially wouldn’t then just call the next phone the “iPhone 5” the following year as it would actually be the 6th version and so on. The logic is broken.

Branding aside, it also seems clear to me that after waiting more than a year, Apple’s going to do more than a modest bump to the iPhone. While the iPhone 4 is doing exceptionally well after 15 months on the market, the changes will need to be significant if only to keep consumers interested and competitors behind. The rumors of a larger screen, better camera, and a tapered form factor seem to gel with that.

Meanwhile, the now two-year-old iPhone 3GS is the second best selling phone on the market. It is clear Apple benefits from giving customers the choice of a lower-priced option. This one-two punch has served them well at retaining market share in the face of Android so the logical conclusion would be that an iPhone 5 will be announced this fall, and Apple will keep the iPhone 4 around discounted like they did the 3GS.

But the rumor is that the next iPhone is also now coming to Sprint and T-Mobile too, which would make sense. The problem is T-Mobile’s 3G network uses a different frequency than AT&T, so if Apple wants to support them, they need to introduce either a separate phone for their network or a phone with a chip that is compatible with both networks. Meaning they’d have to manufacture three different iPhone 5s for the 4 different carriers, and that’s not counting storage sizes or colors and this still leaves them without a low-cost option on T-Mobile’s network.

Then I start thinking about this and the fact that before the Verizon iPhone 4 was launched, there were all sorts of antenna redesigns that leaked that contained SIM card slots, which the Verizon phone does not and now suddenly similar things are showing up again.

All signs seem to be pointing at it, but no one seems to notice. My gut says that Apple is planning to launch not one, but two new iPhones this fall, and both will be available on all four major US carriers. I believe we will see a mildly revamped iPhone 4 and an “all-new” iPhone 5.

Apple will, however downplay the 4’s revamp with a comment like “the iPhone 4 has proven to be the most popular phone in history, and it’s not slowing down so today we’re making it available to T-Mobile and Sprint customers too”. No new name, and no upgraded specs, they’ll want the press to focus on the iPhone 5, not a bunch of internal changes to a 15-month-old device.

How will they do this? Instead of individual models for individual carriers, I believe that both the revised four and the new five will have both CDMA and GSM chips in them will be compatible with all four carriers right out of the box.

Externally this does away with customer confusion as most people don’t know/understand/care about the differences between cellular networks and frequencies; they simply want to buy a phone and have it work. Secondly, this dramatically simplifies their product line, inventory, and manufacturing and allows them to further leverage the economies of scale that CEO Tim Cook so masterfully does already.

Wouldn’t be half bad for his first public move as CEO either.

What are your thoughts? I’d love to hear them in the comments.

I’m going to go out on a limb and flat out disagree with Robert Scoble.

In his latest post, he cites an EngadgetHD article noting that we have only two years remaining before the government-mandated shut down of analog television. The completion of this switch will lead to a more efficient, higher quality, and (most of all) more media company friendly digital signals. Scoble uses his own father as an example as to why this shutdown won’t happen.

While he raises a good point, his argument is flawed. His point is that older people vote. And they vote in large numbers. Scoble argues that when they find out we’re going to take their analog TV from them, they will come out in droves to change the laws. I’ll go on the record and agree if there is anything that would – and could –stop this switch from happening, it is the elderly voting it down. But I’m also going on the record to say it won’t happen. The transition will occur without a hitch.

I think by the time the analog switch is flipped off, very few people will notice – especially the elderly who are, demographically, less in-tune with technology.

The main reason for this is something I’m not sure Scoble caught:
The switch doesn’t require the average consumer to upgrade their set, only their signal.

It just means that pretty much every household that wants a cable connection will have to switch from an analog receiver to a digital receiver. They don’t need to buy an HDTV or anything of the like.

My parent’s 15-year-old TV works fine with the digital box, and probably so will Scoble’s dad’s. Most people don’t understand the difference between analog and digital, nor do they care. They just know the cable company is offering them a better deal and more channels if they switch the box on top of their TV. Most people won’t even be aware it’ is happening or that they have digital service.

Here on Long Island, it feels like the transition is pretty much over already. Cablevision, the dominant provider in the area, has made it cheaper to switch to their iO digital cable service than to keep your existing analog one. Combine that with the cheap bundles of broadband with your digital signal, and it’s pretty much insane not to. And now, more companies are getting into the game. For example, Verizon has started to penetrate the once monopolistic grip of Cablevision with its FiOS service, and it doesn’t offer analog service at all.

I think Scoble raises a good point. If it were highly publicized, I think some people would come out against the transition. But I believe it would be almost entirely based on a misunderstanding.

Even if people did band together against it, if consumer rights groups got up in arms, I’d argue you wouldn’t hear about it too much. Not to sound cynical or like a conspiracy theorist, but the media companies aren’t exactly going to publicize it when they stand to benefit from the transition, and the people who would be up in arms aren’t exactly reading technology blogs daily either.

The transition will be barely noticed when it happens. The media companies have been working on this for a while, and when the day comes, most people won’t even know it happened.

Mark my words.