Creative Friday

I suppose I won’t be taking any monetary advice from Brett Arends. In his piece for the Wall Street Journal titled “When It Comes to the iPhone, Waiting Was Golden” he makes the case that only fools went out and bought the first generation iPhone. From the article:

So much for all those who stood in line a year ago. They paid $599 (again, plus cellular contract) for a model with eight gigabytes of memory, and those models only ran on slower EDGE networks.

How humiliating is that? Owning one of these is like being the PC guy in a Mac commercial.

Clearly, Mr. Arends hasn’t done any actual math on this subject. He simply says that an early adopter paid $599 for an 8GB model and someone who waited will pay $199 for an 8GB model with 3G and GPS. That certainly seems cut and dry. But we’re talking R.O.I. here, right? That’s the lead on this story, in fact it’s part of the page title. And if we’re talking R.O.I. then we must talk about total cost of ownership. And in the end, you will pay more for an iPhone 3G than I did for my iPhone 2G. Here’s how it breaks down:

I stood in line on June 27, 2007 for the first generation iPhone.

• $599 for 8GB iPhone
• $480 for 24 months @ $20/month Unlimited Data Plan (including 200 SMS)
• $1200 for 24 months @ $50/month voice plan
• -$100 credit when Apple dropped the price to $399
• TOTAL $2179 for 24 months of ownership

The new iPhone 3G will be released on July 11, 2008 with new data plans

• $199 for 8GB iPhone (with 3G and GPS, $299 for 16GB)
• $720 for 24 months @ $30/month Unlimited Data Plan
• $119.76 for 24 months @ $4.99/month 200 SMS Plan
• $1200 for 24 months @ $50/month voice plan
• TOTAL $2238.76 for 24 months of ownership

Note: I include the $4.99 for SMS because that’s what iPhone 2G users get included with their data plan at $20 a month. You could choose to pay 10 cents per message sent or received for SMS but that would not be a true comparison of features. Also, this does not take into account taxes and regulatory fees which increase with your total bill.

Humiliating indeed. The way I see this is that I enjoyed a superior product for a year before the “waiters” are going to get a chance to experience the same product. They’ll pay $60 more than me to experience the product but they’ll get 3G and GPS. Every other new feature is in the software and I get that as a free upgrade. I don’t think there’s anything humiliating about enjoying the world’s best phone for a year and paying less than other people are about to.

The true winners here are people who just bought an iPhone in the last month or two. They only paid $399 for their iPhone and they enjoy the same contract as the day-one iPhone buyers. But their contract gets to stretch into 2010. They’ll enjoy a much better R.O.I.

After Apple announced the iPhone 3G and, better yet, the price of the iPhone 3G, I knew I’d be in line for one on July 11. But after reading some news about the new distribution and pricing model, I’m not feeling nearly as confident. It costs me nothing to keep my phone and upgrade the software to version 2.0. But if I want the 3G and GPS (the only “real” difference that I can’t get in my iPhone) here’s what I’m looking at:

• $299 (because I’d get the 16GB version)
• $10/mo. increase in the data plan
• $29 for a new dock (does not come with a dock and it won’t fit in the old dock)
• $20-40 for a new case since it won’t fit in the old cases

I would immediately be out $350 or more just to buy one of these things. Then I would be out another $120 a year for the updated data plan. For some reason, $20/mo for data was totally cool with me but $30/mo doesn’t sit well. Apple’s revenue sharing with AT&T has been axed and that’s why AT&T is subsidizing the cost of the iPhone now. But now that they don’t have to work with Apple on pricing, they’re raising the rates.

I guess what’s most disappointing is that last year’s iPhone sale was something special. It felt like I was buying a premium product. And because I was buying a premium product I was subject to a better experience as a customer. The ability to buy your phone and not have a single person touch it other than yourself was very gratifying. I enjoyed bringing the iPhone home and going through the unboxing ritual. And all I had to do to activate the phone was plug it into iTunes. The activation took only a few minutes and it was easy. With this new distribution model, the iPhone is just like every other phone to AT&T and now an employee of either the Apple Store or an AT&T store will have to open the box, put their grubby mitts on your iPhone and activate it. They’ll take off the protective wrap, they’ll turn it on, and they’ll dial a number and then punch in some codes. Your phone will be activated and they’ll make no attempt to put the packaging back together. The whole process will take 10-20 minutes. I’ve purchased many phones from Verizon, Cingular, and AT&T and the one thing all carriers have in common is that the process to activate your phone takes much too long.

I get all of the cool new features of the new iPhone software if I don’t do anything at all, just upgrade my software when it comes out. I get multiple delete/move, I get address book search, I get Mobile Me integration, I get the App Store.

Is 3G and GPS worth it?

UPDATE: Well this bit of information from Om Malik’s interview with AT&T Mobility Chief, Ralph de la Vega, is the straw that broke my back. SMS is not included as part of the data plan anymore. So you are going to pay $10 a month more for your data plan and you either have to pay-per-SMS at ¢10 to send and receive or get a plan which right now starts at $4.99 a month for 200 SMS messages. That means a person buying the iPhone 3G will have to pay $14.99 a month more than I currently pay for my first generation iPhone. After 24 months you’ll pay $359.76 more for your data only than first generation users pay. That’s not counting voice and that’s not counting taxes. Laugh at me all you want for paying $599 for my iPhone (with my $100 credit). For the first time in history the early adopter looks like the smart player.

Big, big, big “what if?” here. But what if the iPhone 3G has to go through the same FCC testing as every other cellular phone has to go through before it’s allowed to be sold to the public? If that’s the case then we should have seen something on the FCC site by now, shouldn’t we? I mean, people scrape that site every day for a glimpse at things coming through the pipeline.

According to Gizmodo, Apple will announce the iPhone 3G on June 9 at the WWDC. That certainly sounds legit. We all know they are working on an iPhone with 3G capability and we all know that because Steve Jobs said so at the UK launch of the iPhone last September. But remember when they announced the iPhone? Jobs specifically pointed out that Apple would rather announce their new stuff than have the FCC do it for them. And if the FCC hasn’t gotten the device to test, how can Apple sell it?

I think it’s a stretch and Jobs & Company are pretty clever. They’ll likely launch and sell right away. But I think the possibility of an FCC-testing-period is not out of the question.

Google announced yesterday that they have a new version optimized for the iPhone and MobileSafari. They mention that the new version is better for the iPhone than their standard mobile version in that it utilizes javascript to do more from one view. “Starring, sharing, and keeping unread are done in place, so you never have to leave the list view or refresh the page.”

I think that all sounds well and good. But the truth is that the mobile version was actually better because it wrapped the original article in javascript and stripped out everything but the text and pertinent graphics. This was useful on EDGE and made it easy to keep up with my RSS feeds while away from my computer. I’ve been happily using the mobile version since I bought my iPhone almost a year ago and I wasn’t even asking for a change. The mobile version was such a great iPhone application. You just got the text, perfectly presented in your browser.

My biggest gripe about the new version is that they actually took features away. The mobile version has a Settings link that allows you to “Reformat linked web pages for mobile browsers.” You can turn that on or off as you see fit. I could choose to display 5, 10, or 20 articles at a time on the old version. The new iPhone version doesn’t even give you settings at all.

On both versions, there are 2 links at the bottom of your feed list: “Load More” and “Mark These Items as Read.” On the mobile version these links are stacked on top of one another and take up the same amount of screen space. Clicking either link is easy. But on the iPhone version the “Load More” link is left-aligned and significantly larger than the “Mark These Items as Read” link which is right justified. The first time I tried to click the mark-as-read link I actually clicked the load more link because that link spans the width of the iPhone’s screen. It’s awesome that they do that so I don’t have to be so specific with my touch but the mark items as read link doesn’t span the width of the iPhone and you must be very specific with your touch on that link. And the space it takes up is so much smaller than the load more link that it’s too easy to accidentaly touch the load more link.

Obviously the iPhone version is still in beta and these things can be easily fixed. But I wish more developers would remember that it’s never a good user experience to take features away (unless it’s proven that the feature is little-used and gets in the way of completing tasks). You should start with you already have and then add functionality to improve the user experience. I just hope they add those settings back. I won’t be able to use the iPhone-specific version until they do. Luckily for me, the mobile version was already an awesome iPhone app to begin with.

I use a corporate-supplied MacBook Pro in an environment that is almost exclusively Windows. It’s a challenge, to say the least. This isn’t the first time I’ve worked on a Mac in an all-Windows corporate environment and you quickly learn how to troubleshoot your own machine since many IT people do not have the slightest clue how to help you if a problem occurs. Luckily for me the lines between Mac and PC have blurred considerably since the old OS 9 days and working in a PC environment isn’t as difficult as it used to be. Most people I interact with who don’t know the computer I’m using will probably never know the computer I’m using. They assume I’m on a PC just like them.

If you’re ever concerned about moving to a Mac because you fear that the software will be different or you won’t be able to share files with PC users, I’m here to put that fear to rest. Here’s a list of software I use that keeps me working with PC users:

• Microsoft Office 2008 - Written specifically for the Mac and is completely interoperable with Microsoft Office for the PC. It has Entourage instead of Outlook but they are pretty much the same applications. I am on an exchange server, my calendar is in sync, I have access to the corporate directory, etc.
• Keynote 08 - This gem just kicks Powerpoint’s booty and there’s no sense in using Powerpoint. I do my own presentations anyway so I don’t need to share my files with someone else. On the rare occasion I do need to share my presentation with another person I just export my Keynote file as a .ppt file. I usually lose some of the nifty animations but the presentation is still better than anything you can produce with Powerpoint.
• Omnigraffle Pro 5 - Superior to Microsoft Visio 2007 in almost every way. The beauty of it is that I get to use such a great program for all of my diagrams and PC users never know the difference because I can open and save in the Visio format. I’ve shown other IA’s Omnigraffle and how you can quickly create a site map using the outline mode and they’re always blown away.
• OmniPlan 1.5 - I’ve never used Microsoft Project so I can’t make a direct comparison but OmniPlan does the job nicely and no one has any problems opening and viewing my files. The Omni Group is on the ball. They just make killer software with real-world business uses. I also use OmniOutliner (which is never closed) and OmniFocus to help me keep my thoughts and tasks in order.
• Adobe Creative Suite - No one outside of myself has any need to open a Photoshop document or Illustrator document but they could if they had the software. Just like Microsoft Office, Adobe created their software to be completely interoperable between Macs and PCs. Just don’t use PostScript fonts and you should be fine.
• Parallels - When push comes to shove and I have to use a PC because some business application requires Active X or I’m working with Sharepoint I can open Windows XP and work with Windows applications just like they were installed on my Mac. The move to Intel was one of the smartest moves Apple has made and the architecture allows me to use Windows at almost native speed in a virtual world. It works so much better than Virtual PC ever did.

In addition to these titles that allow me to work with PC users I also use Mac-only software that I couldn’t imagine living without. Programs like 1Password, Coda, CSSedit, Delicious Library, MarsEdit, Skitch, TextMate, and VisualHub. I use .Mac to keep my Address Book, Calendar, Bookmarks, Mail Accounts, and FTP sites in sync but that service has finally gotten a Windows counterpart with Microsoft’s announcement of the Live Mesh service. Even though .Mac has it’s problems (and it does) I still find it incredibly useful, especially the online disk space.

One of the biggest myths is that you don’t get good software on the Mac. There may not be as many applications produced for the Mac but the software that is produced is almost always superior to anything you can find on Windows. I’m trying to say that without sounding like a fanboy but I know I come across that way. I just think the Mac software developers take a lot of pride in their work and it shows.

The Mac is definitely making a comeback and it’ll be showing up in more and more businesses. There’s no reason it should be excluded anymore. I work on a Mac every day and I’m able to access our network, use Cisco VPN to log in remotely, share files, and open and save PC documents. It’s truly a business machine.

UPDATE: My friend Pat Charles pointed me to this article on InfoWorld that has real-world data to support my claim that Macs will be showing up in more and more businesses.

UPDATE 2: It looks like this is a timely blog post as there are many more articles coming out about this very subject. Check out Business Week’s The Mac in the Gray Flannel Suit.

UPDATE 3: This will be my last update on this post but this has never happened to me before. Clearly I was on to something. Please check out MacUser’s “Macs in business: Making the case” for their perspective.