High Def iPhone and iPod touch Could Make OS X the Mobile OS to Rule them All

In my previous article, ARM Netbooks Could Make OS X the Mobile OS to Rule Them All, I discussed the advantages of an ARM-based netbook running OS X with a screen resolution of 960 x 640 - four times that of the iPhone.

If we look on the iPhone, iPod touch, and proposed netbook as part of a range of Apple pocket computers, there are some obvious gaps to fill.

iPod/iPhone Domination

Look on iPods and iPhones as a range of handhelds, from the shuffle to the iPhone, and you realise how difficult it would be for other companies to break into mobile entertainment. Nearly every price point is already covered. Add iTunes, the major music store for the US and Western Europe, and the 6-month-old App Store, with over 15,000 apps (according to Apple - over 20,000 according to mobclix.com) and 500 million downloads.

It looks as though only Nintendo's DSi will be a major competitor in the near future, which is one of the reasons games plus lots of other useful apps is a strong part of Apple's iPhone advertising.

Growing the Market

The major question is how to grow the market, especially in a recession. When people feel poorer, they want to escape that feeling, as it is a type of powerlessness. Being able to buy an inexpensive "luxury" helps, especially if they know it is good value that they would buy without thinking in normal times. So people need to be able to buy Apple "luxuries" at a price they feel they can afford.

Both Steve Jobs and Tim Cook have said that Apple isn't interested in making low-end phones (although Jobs has been known to change his mind if the opportunity is large enough), so let's look at the iPod type approach of giving more for the money at the same price points and less for less. This suggests a next gen iPhone HD with a higher screen resolution with 16 GB and 32 GB memory. At 720 x 480, that is 2.25x the current screen resolution, it could run US (NTSC) and Japanese TV programs. 600 x 400 would be a good alternative. Even with the same 163 ppi, it would only add 0.5" to the width and 0.7" to the length.

The current 3G iPhone would become the iPhone nano. This would let Apple reduce the price of the current 8 GB iPhone so that carriers could easily offer it at $99 with a two-year contract - and maybe even $0 - letting more people, whose cellphone usage means they need a contract, switch at minimal cost.

Similarly, the iPod touch HD could come in 32 GB and 16GB models with the larger screen, and the price of the current 8 GB model reduced.

Part of a Family

Choosing from this new iPhone, iPod touch, and ARM netbook range would be straightforward.

• Do I need a "real" phone, or is Voice over IP (VoIP) fine?
• What size screen do I want?
• How much memory do I need?

The key is non-fragmentation. As Joe Wilcox says, "Apple's platform will grow stronger and maintain huge advantages over competitors as long as there continues to be one iPhone OS version for all handsets from all carriers."

The same version of the OS will need to run on the iPhone/iPod touch HD and the netbook, so that for users and developers it is a true range. Having a lightweight USB keyboard available for the iPhone and iPod touch would add to their uses and make the range with the ARM netbook more seamless.

Specific Markets

Medicine

Having a more extended range of devices could also help Apple speed the takeup of OS X in an area like medical, which currently has about 1% of the apps in the App Store. Epocrates, for drug interaction and adverse reactions, was part of the App Store launch, because it gave doctors a reason to move on from their Blackberries and Palms. New applications such as Surgery checklists, which help reduce complications and deaths, would be much more usable on a larger screen. And sometimes getting takeup of a new system is as simple as having a prestige version, an iPhone HD, for the consultants.

Education

This range will also strengthen Apple's leadership among students. Many of them already have iPods but will look at lower cost netbooks or the secondhand market when they need a computer. Apple is already expanding iTunes U (iTunes University) and persuading universities that it is a great way to attract students and effective for helping them learn.

Apple also needs to make this range of devices the textbook reader for the college market. When you are already carrying around a laptop or netbook and an iPod, who wants Amazon's Kindle too? There are just too many publishers for Apple to organise quickly in an iTunes Store, so it will be far more effective to have Amazon and Google prepare the books. Let them make the money from this part of the content.

The more Apple shows other large companies that it wants them too to make a buck from the OS X mobile platform, the faster it will grow, and the less other companies will feel they are dealing with another Microsoft.

An iPod touch bundle with Apple's In-Ear Headphones and VoIP, such as Truphone, to take full advantage of the campus WiFi would be icing on the cake.

China

There are strong possibilities for the current iPhone and iPod touch too. Expanding iPhone sales to more countries will help somewhat, but probably not too much, as the world economy is suffering. Although China is the largest country without a carrier agreement in place, many interested users have bought unlocked iPhones through Hong Kong. According to iPhoneAsia, over 1 million iPhone owners are currently using China Mobile's EDGE network. They could be valuable switchers for China Unicom when its 3G service arrives in May, and therefore let Apple make a good deal.

Competition

Sony

Sony's PlayStation Portable (PSP) is in real difficulties. Sony is busy making versions of successful PS3 games to try to boost sales. There is talk of the new PSP 2 being available in the fall, even though the PSP 3000 was launched last fall, but developers are having problems finding investment for PSP games because of the success of the App Store.

The iPhone platform already has more games and a much wider range of apps, and the year's sales for the iPhone and iPod touch will comfortably exceed the 15 million PSPs that Sony hopes to sell by the end of March.

Introducing a new 4 GB model iPod touch at $169 and dropping the price of the 8 GB to $199 could well finish off the PSP. Replacing it as the second choice for games would likely add at least 10 million units a year to iPod touch sales.

Is an iPod touch price drop the reason Apple has bought up flash supplies, driving up prices in the spot market?

Nintendo

The Nintendo DSi will have problems too from a low cost iPod touch, as the US April launch price is set for $169 (Amazon). If Nintendo tries to maintain that price, it will be under pressure, after the initial rush of enthusiastic buyers, to reduce DS game prices or start losing market share. Therefore, a good short term focus for Apple is to take over as much of the mobile games market as possible before Nintendo sells enough to start reducing prices.

Microsoft

So there are some strong possibilities for growing the OS X mobile market. Windows 7 isn't scheduled to appear before 2010, but even if Microsoft manages to ship early, many Windows netbooks will continue to use XP for as long as possible because it's what users know - and it's cheap.

The extended iPhone, iPod touch, and ARM netbook range, with it's touch interface, should quickly kill what's left of the tablet PC market and have at least a year to finish off Microsoft's remaining credibility with Windows Mobile.

However, if Apple doesn't seize the opportunity, the risk is that RIM or Nokia or Ubuntu Linux could become much stronger.