Apple IPhone Fights Back – New Phones, New Deal – Look Out…

It's official – Apple management finally got wind of my “IPhone Killer” series of posts, and that proved to be the last gallon of “gas” needed poured on the already “burning bridge” to spur them to action. A great day on so many levels – nothing like a little bit of self-recognition, albeit delusional – but I'll tell you who wishes they were dreaming – AT&T folks. They are so not happy this morning… Liked this post? Browse through all my posts here. Thanks…Pedro

The blogosphere was buzzing about this last night – it came through on my Twitter stream fast and furious, but I was dead tired after a weekend of “backyard construction” (or destruction) activity. So I let it go until this morning, but the buzz is even louder now with the mainstream press now taking hold of the story.

The rumour – if we can still call it that with a straight face – is that Apple is in talks with Verizon to carry two new phones for Apple — a lower price point “iPhone Lite” (thought Jobs would never call it that would he?) and a “media pad” (think mini-Tablet) device that would be more of an “entertainment” hub and target the need many have that is less 'phone' centric and more 'media' focused.

As I've written about previously, this market is not ideal for “premium players” as the value proposition becomes much more cost-conscious than in better times. This is not a paradigm shift unique to the tech world – it is happening everywhere – so offering more “value-centric” devices with the same “Apple-esque” experience, makes a lot of sense from a strategic perspective.

Apple has also pretty much said it does not care to enter the “netbook” market, so it would be just like them to take a market “like the tablet” and do to it what it does so well – redefine it, focusing on outcomes the customer is looking for (think they are reading Malcolm Gladwell?) – and do what predecessors have been unable to do – make it a “must have” that itself defines the space. I love the potential of tablets – I mean what “Star Trek affecionado” wouldn't? It's just that the implementations up to now have been pretty weak.

And then there is AT&T and this news is not good for them. The IPhone is largely responsible for AT&T subscriber growth, and recenly released Verizon growth numbers show that even with the sole-vendor lock on the IPhone, AT&T is still a distant second in the growth category. Many also applauded the AT&T win 3 years ago now, when they “partnered” with Apple and agreed to keep their “hands off” the device from a branding and application perspective. This is in contrast to Verizon's style of “strong branding” and application “infusing” into platforms they carry.

For me, this is another example of Steve Jobs and the “art of negotiation” – AT&T left themselves wide open because at the end of the day, they are just a “dump pipe” really not adding any value to the IPhone experience. Does an IPhone user “care” that they are on AT&T? Do they even “know” apart from the invoicing relationship they have with AT&T? And that's *not* a relationship, that is a “transaction”. I'm not an MBA graduate, but even I know this is not a solid brand strategy.

So Verizon will swoop in – with Apple is “clearly tired” of all this IPhone bashing Killer talk – the “Steve Jobs Management Team” is taking no prisoners. They are going to hit this hard, on the heels of their phenomenal iTunes App Store Success – and they want to make sure that neither a Pre nor an Android will stand in their way!

Sounds a bit like this “Blogging Idol” too around this competition. Bottom line – competition is good. (Thanks Chris!)

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