Wharton and Apple

For the past couple of weeks I have been listening to the Wharton podcast. In short order a professor of marketing made some pretty outrageous claims. For example, he spent one podcast trashing the iPhone. His claims seemed to have taken all of the negatives of this yet to be released product and ignored all of the potential positives. For example, he said few people will want to buy a phone that is between $500 and $600 - although there is plenty of evidence that there is a pretty strong market for these devices. A look at a couple of AT&T stores over the weekend suggest that the good professor should have done a bit more looking around. The proof of the iPhone will become more clear in the next couple of weeks - after the June 29 announcement. There are rumors that Apple will either have something in the range of 3 million units by the end of the year - or a shortage. There is also a lot of speculation about whether the claims that were originally made about the product will be sustained.

A lot of the focus has been on the internet feature of the phone. While techies argue about the goodness of 2.5G and 3G technology and whether Edge is fast enough - the real question should be will the first generation of technology be slick enough to satisfy those who will pay the initial fee. AT&T has been mum about the service cost for this phone - but it is likely to be based on some phone charges and also then a data plan. There will also likely be some alternatives to the iPhone - but in a column last week by Walter Mossberg - none of the ones he looked at seemed to fill the same need.

In another podcast the same professor suggested that iTunes is a lousy model. He argued that the subscription services were the model for selling music in the future. There is a press story which makes a bit more sense than his argument (which at least based on current market data contradicts the professor's line of reason) in Appleinsider today. At the Worldwide developers Conference which starts tomorrow there is a rumor that by the end of the summer Apple will begin offering a rental service for movies which can be obtained over the net. The article claims that Apple believes that the markets between music and film are different. Music is something that people want to own while movies are watched a couple of times and then not seen again. The service would charge something like $3 per movie to use them for 30 days. The download could be put on one other device (using a digital rights managment system). That sounds like a pretty good idea to me.

It is unclear what this new service would do to the current Apple sales effort for movies. The larger potential market would seem to be for the rental system but who knows?

The podcast from Wharton is one of the ones that so far has been disappointing. With commentary like Professor Faber's and some equally odd commentary on politics which was a bit absurd.

The podcast market is a quickly evolving one. Like any other information market, there will be a lot of variation in quality. But as the market expands there will also be two things happening. First, the range of offerings, at least initially, will continue to grow. Second, the best podcasts will continue to develop and adapt to the market.