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The next step for Apple

Marketplace Staff Oct 4, 2011

The next step for Apple

Marketplace Staff Oct 4, 2011

Steve Chiotakis: Apple’s expected to unveil its next version of the iPhone in a little more than an hour, an announcement that won’t include former
company CEO Steve Jobs. It comes on the same day the Wall Street Journal reports wireless company Sprint is buying $30 million iPhones to sell to its customers.

Hiawatha Bray is technology teporter for the Boston Globe. He’s with us now to talk about it. Good morning.

Hiawatha Bray: Hello, good morning.

Chiotakis: What’s at stake here for Apple.

Bray: I think a fair amount is at stake for Apple because the competition has now become so intense — certainly in the smart phone market. When you consider the fact that Android — in terms of the total size of the market — Android is vastly outselling the iPhone right now, which is inevitable because dozens of companies are making Android phones, and only one company makes the iPhone.

Chiotakis: So what does Apple have to do to win back folks who started buying those ‘droid phones?

Bray: Well, I don’t think they have to win them all back. I don’t think this is necessarily a major problem for them. Bcause they are the most profitable company in the business, they don’t have to be number one in terms of units sold. But they do have to hang out to, and try to continuely expand, their share of a market that keeps going. Only what — like about 40 percent of Americans — have smart phones at all. So this is a huge market that hasn’t even gotten them yet — and then you have the rest of the planet. This is not a mature market, it’s not even close to a mature market.

There’s a huge number of people out there — and they have to keep offering products that will appeal to every segment of that market. Which is why I think there is one thing we might see, is some kind of a lower priced iPhone. I think that’s a reasonable expectation.

Chiotakis: How lucrative is this deal with Sprint?

Bray: Well, assuming that the deal happens, it’s not necessarily going to be all that lucrative for Sprint. Obviously, Apple is going to make out fantastically from this deal. But just to make sure people know what we’re talking about — the report is, from the Wall Street Journal, that Sprint has agreed to buy 30 million iPhones in order to distribute them to Sprint customers. And they won’t make any money on the deal until 2014 — and it’s a bet the company efforts to keep Sprint from being knocked right out of the box by AT&T and Verizon wireless.

Chiotakis: All eyes on new CEO Tim Cook today?

Bray: Absolutely, because we’ve never seen him strut his stuff in this kind of context. I’ve been to a lot of keynotes with Steve Jobs, and everything you’ve heard about it is true — the man is just a master at this sort of thing. And the question is — A. Can Cook match him? B. Will he even try? I wonder if he would even try to do that, or will he just give a rather mundane, straightforward presentation. I honestly don’t know.

Chiotakis: Hiawatha Bray with the Boston Globe. Hiawatha, thanks.

Bray: No problem, thanks a lot.

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