Few surprises, few innovations From Apple

Apple delivered a variety of hardware and software news today at the opening keynote for its Worldwide Developers Conference

Apple delivered a variety of hardware and software news today at the opening keynote for its Worldwide Developers Conference, but the company took its time building up to the big news: The new iPhone 3GS will be available in stores on June 19, and the current iPhone 3G will drop in price to US$99 as of today. Unfortunately, I found the keynote offered empty calories: The lack of a significant hardware upgrade for the iPhone was especially underwhelming.

The keynote -- the company's first marquee event since CEO Steve Jobs took a medical leave in early 2009 -- actually played out more like a MacWorld keynote than a WWDC keynote, back from the days when Apple actually participated in Macworld. This was the first year Apple didn't have a presence at MacWorld, and thus far, its product announcements have been minimal.

Smartphones for All

Apple's announcements today underscore the company's plans to expand its scope as a smartphone maker. NPD Group data puts Apple as the number two smartphone maker today, second to Research in Motion; surely, the company has its eyes set on that top spot.

"We want to reach even more customers," noted Vice President of Worldwide Product Marketing Phil Schiller, who led the presentation in Jobs's absence, during the keynote.

To achieve that end, Apple reduced the current 8GB iPhone 3G to $99, half the price it sold for when it was first introduced last year. "There really has never been a smartphone at this price," says Schiller. That price was long-rumored; now, it's confirmed.

Certainly, never a smartphone that's held wide appeal has carried that price tag. In our database, the iPhone's new price ties the Nokia E71x for the least expensive smartphone we've seen (street price, not including rebates). Though that phone has a reasonable degree of usability, it can't compare to the simplicity and sexy "It Phone" factor of the iPhone.

The new phone, the iPhone 3G S, will be go on sale nationwide and in select countries (including the France, Germany, Italy, and the United Kingdom) on June 19. In keeping with previous trends, the phone's pricing tiers stay the same, only you get more memory for your money: 16GB for $199, and 32GB for $299.

You may need that extra space: Two of the big features for iPhone 3G S are the camera (upgraded to 3.0 megapixels), and the inclusion of video recording (finally) at 640 by 480 pixel resolution, 30 frames per second.

Modest Hardware Boost

The camera and the inclusion of hardware encryption -- a welcome feature for business environments -- are the only new features that clearly mark a hardware change, though. Even though Schiller said during the keynote that "everything inside" the phone had changed, when asked, Apple representatives declined to specify what hardware had actually changed, and instead pointed to the spec sheet on its Web site (an Apple spokesperson indicated that we could "infer" what had or hadn't changed based on those published specs).

As such, it's easy to point to most of the iPhone 3G S's improvements being in software and not hardware. Some, like the addition of white balance controls on the camera, are obvious. Others, like the inclusion of voice control, for example, are less so: Apple didn't indicate this feature would be available on earlier generation iPhones, but it also didn't say what specifically in the new hardware enables this feature.

Likewise, some of the performance enhancements could be attributed to the new iPhone OS 3.0, available for free download to any generation iPhone (and $10 download for any generation iPod Touch) on June 17. This is especially true if one were to assume that the new OS has the same kernel core as the forthcoming Snow Leopard operating system for Mac computers; Snow Leopard also features performance enhancements.

Apple does claim a speed boost from the iPhone 3G to iPhone 3G S. According to Apple's benchmarks, messaging will be more than twice as fast, loading Sim City 2.4x as fast, and loading the The New York Times' home page 2.9 times as fast. Battery life improvements point to factors other than the hardware, as well. (3G S talk time, sadly, remains the same as the 3G, but data over Wi-Fi, for example, can muster an additional three hours on the iPhone 3G S as compared with the iPhone 3G-and Wi-Fi battery improvements could be due to a new chipset, or to a new software stack for the existing chipset).

Apple: Standing Still, But Reaching Deep

It was surprising to see the iPhone 3G S's hardware be outwardly identical to its predecessor. At a time when competitors are making headlines with fresh designs, Apple instead appears to be marching in place. Recent rumors indicate this could be part of Apple's long-term strategy, a strategy that could prove a mistake over time.

The announced features in iPhone 3G S are a modest upgrade, not a must-have upgrade -- which in turn keeps users from considering a new handset purchase. Thus far, Apple has conditioned users to look forward to dramatic hardware improvements once a year. While the iPhone 3G remains a pleasing device, nearly as much as a year ago, that doesn't mean the hardware didn't have room to evolve. That Apple hasn't innovated and improved upon its existing hardware and design leaves room for others to ratchet up the competition. And, it also opens room for speculation that innovation may stall without Jobs at the helm.

Apple's new MacBook Pro notebooks don't help promote the company's position as an innovator. The company announced a refresh today of its 13.3-inch and 15-inch models, with lower prices, and more powerful components. Although it brought back FireWire 800 and introduced an SD Card slot, these models lacked the wow factor we've come to expect from Apple hardware.

Where Apple continues to hit it out of the park, though, is its App Store. As of April, more than 1 billion apps have been downloaded, and more than 50,000 are available for download. The competing App Store numbers remain modest and negligible by comparison.

The App Store juggernaut may well be the reason Apple feels it can rest easy for the moment, but Apple will have to tread carefully to keep the iPhone from becoming less an innovation and more a presumption and commodity among mainstream consumers.

Tags ApplewwdciPhone 3G SiPhoneiphone 3.0

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Melissa J. Perenson

PC World (US online)

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