The iPod points the way

Throughout 2006 I was waiting for cell phone companies in the US to turn on the after burners. I specifically saw the emergence of mobile entertainment and interactivity. After all, the ability to watch TV and movies was already happening in Korea and Europe, among other places. Basic PC functionality had already migrated onto various versions of the cell phone. And new functionality like music downloads, file swapping, and eCash seemed about to burst.

But nothing happened. Not in 2006 and not for most of 2007. Cell phone makers focus on packaging and the software interface continues to get clumsy and less user friendly.

If anything, the cell phone was trying to be more than a cell phone and not quite succeeding. A little camera and text messaging and what else?

Now Apple has shaken things up. The difference between a cell phone and the iPhone is the difference between a mobile telephone and mobile communications.
1. Interface - The interface is really nice. It is very user friendly and intuitive. There are nice touches that individually don't matter but taken on the whole make for a satisfying experience.
2. Touch screen interface - The screen is large, and that's a plus. But the interface is much more important. The challenge with web surfing on a tiny screen is that there is too much information compression. You need a mouse. The interface allows the hands to be the mouse in a very natural way. If you remember Palm, they had you memorize a new way of writing the alphabet in order to take notes. The iPhone has a similar learning curve for manipulating the applications but it's far more intuitive
3. Storage device. I think folks are starting to like the concept of the portable storage device. The killer apps of music and pictures/video are how people express themselves. While the iPod can be an intensely isolating device, the ability to share personal info is socializing. Cell phones have just not done a good job with that.
4. Ease of applications - Sure I can surf the web on any device, but the iPhone makes it feel smoother and more integrated, instead of being a bolt-on or after thought. Indeed, that is the basic theme: intelligent integration. Apple wants to have this device become the integration of PC-on-the-go, phone, camera, storage device, TV/movie center, and stereo system.

Can other companies compete?
Up to a point, probably. The touch screen interface can be mimicked to some extent, I would imagine. But I don't think other cell phone makers have got the concept yet. Or maybe it's the wireless phone companies. When people start experiencing a mobile communications device, will they start questioning the value of their current offering?
Most likely, yes.

The winners, as I've pointed to, are Sandisk, THE flash memory maker. Follow that with anyone enabling cell phone easy interface (NUAN, GOOG, AAPP) and, of course, anyone supplying bandwidth (CSCO) and managing access (T). I don't use my phone for web interface because it is too many steps for too little payoff. I would be a big web user on an iPhone. Look for much more cell phone web traffic