Has the iPhone Killed the Video iPod?

The iPhone guranteees there’ll be no video iPod for a long time. If you don’t need to buy an iPhone to get a video iPod, why else would you buy one? Certainly not just because it’s a phone. That’s one hell of an expensive phone! And it’s not quite smart enough as a smartphone.

Well, I’m back from the beach. I had a nice relaxing holiday, but one thing kept niggling away in the back of my head while I fried the front of it lying on the beach under a scorching Australian sun: who the heck is the iPhone for?

Before answering that question though, we first need to establish what it is and is not.

1) It’s a phone.
2) It’s a video iPod.
3) It’s not a PDA.

Okay, now that wasn’t too hard, but therein lies the issue. Because, it doesn’t matter how you look at it, it’s one expensive phone. Thus it’s not just a phone, it couldn’t be. See, Apple had this dilemma. Steve wanted a mobile phone for the 21st Century, one that even James T. Kirk might consider swapping for his communicator; however, such a device would be prohibitively expensive as a phone.

If all the iPhone did was be a phone, would anyone buy it? Considering the technology inside of it would be still pretty much the same, it would still cost the same. So, not a chance.

One other little thing the iPhone is: it is a handheld computer. This is significant. That little bugger really is a computer—albeit, one wearing a shorty-pants version of OS X.

So, to fulfill Steve’s dream, Apple had to build a device with the power of a handheld computer just to make this iPhone thingy with its whiz-bang, multi-touch interface. And, to make it viable, it would need some other features tacked on. Coincidentally, many folks think they want a video iPod, while others are clamoring for an Apple PDA. So the engineers at Apple, being the creative bods they are, found a way to kill two and a half birds with one stone. The half-bird is the PDA. (If this were MS, the stone would have missed the birds and hit the customer. Of course, the customer would have been thrilled when told this was an undocumented feature.)

But anyway. We’re starting to distill some things about the phone, so let’s hop in and see who it might be for.

Mobile phone warriors
These folks’ lives revolve around their mobile phones. Many of them wish they could get their bluetooth headsets implanted in their ears. They buy expensive phones and might even accept the price of the iPhone, especially given it’s PIM features, albeit somewhat neutered.

And these folks are master keypad jockeys. You see them belting out SMSes, scrolling their address books, leaping through their voice mails, and all with their non-preferred hand while eating a three course meal.

How many people out there in reader land hold their mobile in one hand, and press its button with a finger from the other hand? None? Less than none? I thought so.

The iPhone—from the videos and information so far—looks like it will often need to be used that way. That is, one hand to hold it, and one to point and touch with. Maybe it’s a safety feature to stop people from texting while they drive.

Mobile phone warriors only have one finger that counts: their thumb. Multi-touch? Can you really see them using a phone that requires two hands?

Smartphone users
The iPhone does fall into the category of smartphone; however, is it smart enough? After all, it is not a full PDA and has no way for third-party applications to be added. Smartphone users I’ve spoken to so far are not interested unless it is a full PDA.

For so many years we’d waited for Apple to get back into the PDA market, and now we thought we were getting more than we could have hoped for—a handheld Mac. What a PDA that would be! Steve said it ran OS X. It had to be a Mac.

Until we started getting the feedback.

The first murmur of concern was that it wouldn’t run third-party apps. Yep, said Steve (according to the NY Times a few weeks back), we don’t want it ending up like a PC and crashing or hanging up just when you need to make a call.

What? OS X behave like a PC? Crash? Hang up?

And so the iPhone’s PDA capabilities have been neutered.

The iPhone may be a smartphone, but it ain’t the brightest light in the street. Without having full PDA capabilities, can it really compete in the smartphone market? I’m not convinced.

Video iPod fantasizers
Bing, bing, bing! Flashing lights! Scores!

This is the market Apple is really after with the iPhone. Apple could have released a video iPod only with all the look, feel, OS and GUI of the iPhone. And it would have been bought in record numbers despite a high price tag. When you consider that the original iPod cost $399, $499 is not too bad for a video iPod.

Except, Apple was drooling over the mobile phone market. 1 billion units a year! Who wouldn’t want a piece of that? And so Steve or someone else got smart and suggested including a phone in it as well. Yep, the iPhone is actually a video iPod with bonus phone.

Apple could have released a more traditional and affordable handset but really, that would have gotten lost among the millions of other such phones.

So how to get into the higher-end phone market and guarantee success? Make it the video iPod. There is a ready made market for the video iPod; folks have been clamoring for one for years. I don’t know just how big that market is, but for many of the first buyers, it will be the reason that clinches the deal (besides Apple-aholics who buy anything with the logo on it).

The iPhone is indeed targeted at the folks who want a video iPod or a 6th Gen iPod. And the cost is not a problem, even if it was just a video iPod.  These guys are willing to pay.

Even if the iPhone doesn’t sell as many units as expected, it will always have a solid base market because of its video iPod capabilities, which Apple will then be able to leverage off as proof of success, leading to it becoming a “must have” device.

No video iPod
But what does this mean for the future of a full video iPod?

There’s been a lot of talk about the need for a bajillion terabyte video iPod to store a reasonable amount of videos (okay, I exaggerate, maybe 100GB). However, I’ve downloaded a couple of short videos from iTMS and they average less than 5MB per minute. Even a long movie of 130 minutes would therefore only be 650MB. So, even on the 4GB model, that’s 13 hours of video.

Apple won’t release a video-only version of the iPod anytime soon as it would cannibalize both the iPhone’s market and the existing video-enabled iPod market.

So, don’t hold your breath. The iPhone is for the folks who want a full video iPod.

In the ‘80s, The Buggles sang “Video killed the radio star.” In the 21st century, they might sing “iPhone killed the video iPod.”