Apple iPhone is a Humongous, Game-Changer: Read this to Understand Why

Implications: In this article, I discuss 10 points on why the Apple iPhone has made mobile / mobile Web / mobile commerce the most important opportunity of the coming year.  Whether it is the four "killer apps" on the iPhone, carrier disintermediation in tandem with Google, the speed to 4G, or the way it has made RIM, Palm, Verizon, and others change their strategy ... this product is revolutionalizing the way we look at wireless.  For years, we listened to the carriers and handset manufacturers say that we shouldn't build for the Web or convergence because consumers weren't using these elements, and now we know for sure that it is because that user experience wasn't ready for prime time.

Analysis: Wake up -- the Apple iPhone has fundamentally changed the wireless business as we know it.  Verizon is spinning by saying anything different, even as they acknowledged the initial change to revenues including a positive increase in smartphone revenue. The changes are minor now, but the points I mention below are going to dramatically change the way wireless business is done.

To whit, and in the wake of these giant changes mentioned below, I am discussing new consulting relationships with Palm and Nokia, who have fear in their eyes.  I am developing a mobile commerce strategy for a major SaaS e-commerce platform provider and for a mobile advertising start-up.  These opportunities have all come up in the past 3 months, in the wake of iPhone 3G. 

You want to know why?  Read below ...

1) The carriers are being disintermediated from the customer relationship.  Apple negotiated a deal with AT&T that I referred to as a prisonner's dilemma in the past, and now all carriers are going to have to negotiate better deals with software players and manufacturers than they did before.  Apple used to get revenue share, they now get a huge subsidy on the phone.  Apple gets on-phone branding, gets marketing, gets activation through iTunes.  Not going to expound on this deeper here, but could go deeper into this paradigm shift in a consultation.

2) Google has entered the mix, going directly after the disintermediation.  Hence, their bid against Verion on the FCC auction to motivate the open device, open application rules.  Hence, their contribution to the Sprint - Clearwire WiMa JV.  Hence, the Open Handset Alliance with Google's Android as the OS.  And do on.  (And you don't think Microsoft is going to up their game in response.)

3) The carriers are becoming dumb pipes.  Check out Verizon's CapEx estimated expenditure for next year as they move away from CDMA to LTE, in recognition of their goal -- to become a great data pipe.  That is fine.  That is what they should be.  They never with innovators of the customer experience.  They'll make more money as a dumb pipe .. check out AT&T's numbers and the insane +50% increase in consecutive quarters in data ARPU.  And, yes, the Apple iPhone was a huge driver of this increase.

4) The customer experience has finally dramatically improved in the Apple iPhone.  Safari is a great experience, as is true convergence with insane YouTube video watching, Google Maps app integration with locator, music, and so on.  95% of iPhone users regularly surf on their phone.  Are you kidding me?  Do you know how important this is?

5) There was one killer app in the smartphone space prior to the Apple iPhone.  RIM BlackBerry had email, that's it.  There are four killer apps on the iPhone -- Safari Web viewing with multi-touch (Opera was next best); true convergent multi-media experience (AdMob is taking advantage of this); great native application experience (anyone download Pandora); and mobile payments (whoa, this is huge, happy to discuss).

6) The big players are shaking in their boots.  Want proof?  Google "Mobile Web Wars," and watch the 2-hour roundtable, where Nokia and their Symbian platform get ripped apart, and, mark my words, Nokia is the best hardware player in the new software-centric wireless paradigm.  Want proof?  RIM, who says that their users want keyboards (which is correct, in many instances), is afraid of the iPhone and is now introducing the touch screen BlackBerry Thunder.  There are tons of touch screens coming to market.

7) The consumer audience is a bigger market for smartphones.  Period.  Today, it is a business-friendly device because email is the one killer app and because the prices have been out of the range for consumers.  That is changing, dramatically.  A very astute gentleman said that smartphones will be the defacto phone in 2 years.  Defacto, I don't know, as developing countries, children, and less wealthy people may not be able to buy or use, but phones are finally heading to convergence ... and, yes, Apple's iPhone is the spark.

8) Apple is encouraging innovation.  Because of Apple, RIM, Nokia, HTC, AT&T, Sprint, T-Mobile ... and, yes, Verizon are changing the way they operate.  The software players are going full bore into wireless, finally.  The application developers are creating utility (and, yes, some nonsense) on our devices.

9) Apple has a 72% very satisfied rate.  RIM is #2 at 55%.  #3 and so on don't get north of 41%.  That is huge, never before seen.

10) This is a global opportunity.  I don't doubt, and definitely believe that Asian users especially and European users secondarily have different tastes.  Japan has been in mobile commerce for years, and micro-transactions are common in the Far East.  Kenya is using the mobile device as a primary payment source.  And, in that arena, wireless Web viewing is still minimal, in comparison to the iPhone which took a global browsing lead around Christmas with a minute percentage of installs.  Because of the iPhone, the U.S., considered smartly to be far beyond other countries in wireless, now is the global leader in mobile Web viewing.  iPhone 3G sold 60% of its phones out of the States, including 25% to the U.K.  They were sold out in many more countries than the U.S.  Not saying that there shouldn't be country-specific activity; of course, there should.  However, the iPhone will also change things fundamentally, especially when coupled by increased innovation and 4G.

I could go on forever (unfortunately:).  But I will tell you this: mobile is probably the most important mover of innovation in the U.S. and globally at this point, thanks in large part to the iPhone.

I would be happy to help anyone with their mobile / mobile Web / mobile commerce strategy ... or just discuss it with my fellow GLG-ers.