RISKY BUSINESS
You wouldn’t want to be an Apple R&D employee right now.
Steve Jobs, already forced to tweak the debut of the much-anticipated iPhone from its expected June 11 launch date to a “late June” debut, is believed to be cracking the whip and having the super-phone tested and re-tested to make sure it arrives without any bugs.
And well he should.
After months of Tickle Me Elmo-level anticipation, the iPhone could rack up sales of up to 10 million units in its first year.
If a bug, however, should appear – say a battery that doesn’t deliver the expected staying power – then Jobs and Apple stand to suffer the largest black eye in recent memory.
“This is a significant investment Apple is making,” says Charles Golvin, principal analyst for Forrester Research.
“It’s developing skills unknown in the past like cell phone technology, battery life research and retail channel development with carriers,” he said of the move’s inherent risks.
“Given that Apple restricts most of its pre-release hardware evaluation to a small group of in-house testers, I’d be more surprised if the launch didn’t have its share of ups and downs,” says Kasper Jade, editor-in-chief of AppleInsider.com.
“I think it’s more a question of how many glitches will plague early customer experiences and how quickly Apple moves to rectify them with software updates,” he said.
Jobs, sensing the need to deliver on the iPhone hype, has already delayed Apple’s new Mac operating system, Leopard, from June to October so R&D teams can focus on the smart phone.
“My suspicion, based on Leopard’s delay and the confirmation of resource reallocation, is that Apple recognized some difficulty in making the June 11 date – if that was, indeed, the intended date,” says Golvin.
The iPhone debut poses a special opportunity – and problem – for Jobs.
The opportunity is to continue to wow Apple fans. The iPhone will contain an MP3 player, camera, have Internet access, wi-fi capabilities, and a touch screen all fully integrated with a phone.
The problem is that rarely has a 1.0 tech version been delivered to market bug-free.
The iPod, for example, which first hit stores in November 2001, was plagued with poor battery life. But it took Apple 20 months to sell its first million iPods (see chart). With the 100 millionth iPod sold in April, the portion of iPod users affected by poor battery life amounts to less than 1 percent.
At rival Microsoft, the new Vista operating system was delivered with plenty of bugs. But as you can with software, Microsoft sent out many patches to correct the product’s shortcomings.
You can’t do that with hardware. And Apple’s update software, already utilized with the iPod, can only fix so much.
“Apple has some experience with power management with the iPod, but the biggest challenge will be the network drain,” Golvin says. “The main thing Apple has to do is optimize the battery power.”
Despite his expectations of some bugs in the iPhone, Jade feels Apple’s next wonder gadget will be a super success.
Apple shares closed Friday at $110.02, up 58 cents. They have soared 29.7 percent in 2007 and 74.1 percent in the last 52 weeks.