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TechNewsWorld.com

iPhone Impact, the Artist's PC, Product for the Week Off

By Rob Enderle
Jul 2, 2007 4:00 AM PT

In the U.S., a lot of folks are off this week because the 4th of July, which marks the Independence Day holiday, comes on a Wednesday this year. An impressive number of Americans have been spending the last few days scrambling to buy a US$3,000 phone, and I think it is time to begin talking about the impact of this event.

iPhone Impact, the Artist's PC, Product for the Week Off

In addition, last week Gateway announced a laptop that has been designed specifically for artists and would likely be ideal for photographers and video artists that need editing capability in the field.

Finally, given that summer is here, my recommended products will drift to things you build or play with during your lazy summer days. I just discovered an Xbox 360 mod kit that was a dream to install and resulted in what I think Microsoft should have done with this product to begin with, so it's my product of the week.

Before moving on, check out how a couple of enterprising IT guys got their company to buy them iPhones.

iPhone Impact

While I'm tempted to start by suggesting a lot of spouses will be having their significant other committed for buying a first-generation phone and paying between $2,000 and $6,000 for it, the fact of the matter is this is a major event, and it will have a significant impact throughout the year.

The most obvious thing is the revelation for companies like Microsoft, Nokia, Motorola, Samsung, LG and Sony. Their marketing, R&D and engineering staffs are likely getting an earfull from their executive managers, boards and stockholders, all asking why Apple could get lines around stores and they couldn't.

Think about it, the cell phone market is a mature market. Regardless of any limitations the iPhone has, no outside vendor should have been able to step in and create so much demand. Even the Razr didn't have lines of people waiting to buy it on the first day.

The initial performance of this product makes every other company in this space -- with the possible exception of HTC, which actually got a competing product to market -- look like it needs a top-level shakeup. Were I an executive manager or board member for any of these firms, I would be asking whether we needed a new executive staff that could execute like Apple did.

The second thing is what the backlash for this product is likely to be to the technology industry in general -- and Apple in particular. The phone does promise more than it actually delivers, and there will be a number of folks with serious buyer's remorse as a result.

In addition, the money folks are using to pay for this likely otherwise would have been spent for other technology items like laptops, TVs, and stereos. This money is now spent, and there is no expected windfall coming that will allow it to be spent again. This suggests sales for a lot of these high-ticket items will be soft for a while, and Apple -- and others -- will likely see a drop in PC and iPod product sales as a result.

No one has a money tree -- or anyone who does isn't telling anyone. The significant sums iPhone owners are paying initially and then monthly will decrease their disposable income -- and, as a result, the number of additional tech products they buy.

The third big thing is a change in how consumers generally look at phones. This may be the beginning of the end for traditional laptop computers and MP3 players like iPods. You don't need two music players. Even before the iPhone, kids in Asia were indicating they could live off their cell phone and increasingly didn't need a laptop computer.

As cell phones like the iPhone continue to gain in capability, there likely will be less and less need over time for either a standalone MP3 player or a laptop. Desktops could come back into vogue, or server-based services could fill the gap, but this is a huge change -- and it is just beginning.

Finally, this clearly demonstrates the power of solid demand-generation marketing. For any engineering company that simply doesn't understand the value of good marketing, the iPhone launch provides a solid example of how great marketing is even more valuable than a great product.

What happens after launch will have a lot to do with both Apple sustaining marketing and how well these new Apple customers are treated by operations, but there has never really been a more solid example of the value of good marketing than the lines waiting for iPhones and Apple's market valuation.

The Artist's Laptop

I've been doing a lot of photo and movie work of late as I test out the current crop of cameras and editing products. With the incredible power available in current editing tools, it's possible to create professional quality projects with desktop hardware.

For instance, for video, I've recently fallen in love with Pinnacle Studio 11 Ultimate, which allows you to do green screen work. (If you watch "The Daily Show," this is how they make it look like "reporters" are on location.)

Typically, however, you have to do all of this back at your desktop, and most of us simply aren't equipped with the editing hardware -- even on the desktop -- to make this as easy as it should be. The problem, particularly with editing frames or photographs, is that the mouse sucks for detail work. Even if it didn't, tracing things on a separate pad that are on a monitor or laptop screen requires a level of hand-eye coordination that only a very lucky -- and well trained -- few possess.

The right way to do it would be with a tablet computer, but the typical tablet screen is both too small and too imprecise to do the job easily enough.

Gateway stepped up and actually updated its 14-inch widescreen laptop, which was already unique, to specifically address this need. With the E-295C, it has gone to using a Wacom Pen and digitizer -- a version of which is often used by professional artists -- as its new touch screen technology.

Suddenly, there's a tablet PC uniquely designed for those who want to create and edit graphics as God intended -- with a stylus, not a mouse. Evidently, this product has been blessed by the Rocky Mountain College of Art + Design, which apparently helped drive this design specifically for its animation needs.

The product is heavy -- particularly with the massive extended battery, which should last for about a day in use -- but there is no product on the market I know of that addresses the artist better, and summer is a wonderful time to create memories, even if they actually exist only in your mind.

Product of the Week: Xbox Mod

What is kind of funny about this is the way I discovered this product. A Microsoft friend of mine asked if I'd ever tried to mod an Xbox and pointed me at a product he was thinking of trying. After seeing the pictures, I immediately ordered it myself and modded both my Xbox 360 and two of my controllers.

Even without instructions -- instructions are for pussies -- I did both controllers in an hour and the Xbox itself in 20 minutes, and what resulted is incredibly cool. Total price including shipping and the recommended tool kit was under $150. The company also has mods for the Wii and the PS3, among others.

Couple of hints: If you try this, take off the ends of the Xbox 360 first, and don't be afraid to break the case you are removing -- it is tool-less and comes apart hard. Make sure you put on the DVD eject button before you snap the case closed, as it doesn't want to come open once closed. On the controllers, there is a hidden screw under the label in the battery compartment.

Even making a number of mistakes, I did the whole thing in less than 90 minutes and it was a ball.


Rob Enderle is a TechNewsWorld columnist and the principal analyst for the Enderle Group, a consultancy that focuses on personal technology products and trends.


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