‘Apple should pull the plug’: 10 iPhone predictions from 2007

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iPhone predictions from 2007
They must have been holding their crystal balls wrong.
Photo: Ste Smith/Cult of Mac

iPhone turns 10 Predicting the future is tough, even for the experts. That’s the only lesson we can learn from looking back at these horribly misguided iPhone predictions that greeted the device at its launch 10 years ago.

Before most people had even wrapped their fingers around Apple’s first-gen smartphone, tech pundits, analysts and competing CEOs were already writing off the iPhone as a disaster similar to Apple’s previous excursions into video game consoles and the like.

Here are just a few of the laughable reactions that greeted the iPhone in 2007.

iPhone predictions from 2007

TechCrunch: ‘The iPhone will bomb’

TechCrunch‘s Seth Porges wasn’t taken in by Steve Jobs’ reality distortion field. He knew the truth, and that was that Apple was onto a loser with its debut smartphone handset. “When the iPhone comes, Digg will likely be full of horror stories from the poor saps who camped out at their local AT&T store, only to find their purchase was buggier than a camp cabin,” he wrote.

Problems he foresaw included endless cracked screens, a keyboard that couldn’t hold a candle to the BlackBerry’s timeless physical keyboard, and a limited battery life.

We have to admit feeling a bit bad for Porges that this is still one of the first articles that comes up when you type “iPhone predictions” into Google.

MarketWatch: ‘Apple should pull the plug’

In journalism, editors talk about “burying the lede” when a story’s main point isn’t stated up-front in big flashing neon letters. MarketWatch writer John Dvorak didn’t bury the lede; he just got it terribly, terribly wrong.

In a March 2007 article titled “Apple should pull the plug on the iPhone,” Dvorak questioned Apple’s common sense in entering a market with incredibly tight profit margins that was in the process of consolidating around existing giants Nokia and Motorola.

“There is no likelihood that Apple can be successful in a business this competitive,” he wrote. “Even in the business where it is a clear pioneer, the personal computer, it had to compete with Microsoft and can only sustain a 5% market share.”

Apple, he suggested, was making a fashion device that would get old quickly. “The problem … is that while Apple can play the fashion game as well as any company, there is no evidence that it can play it fast enough. These phones go in and out of style so fast that unless Apple has half a dozen variants in the pipeline, its phone, even if immediately successful, will be passé within 3 months.”

Capital Group: It’s way too expensive

A common refrain at the time of the iPhone’s launch was that it was way too expensive.

“The market is already saturated with popular [phones] that are virtually free to consumers,” Capital Group senior VP Ashok Kumar wrote in a note to investors. “The perceived zero cost of a cellphone like the Motorola RAZR is a serious impediment…. The $500 price difference between and iPhone and any number of richly featured [phones] is a lot for a large number of individuals and families to overcome.”

Because this was 2007, there was also a slightly torturous Harry Potter reference thrown in for good measure:

“In the Harry Potter books, a squib is the offspring of a witch and wizard that lacks the ability to produce magic. In the technology world, the iPhone is a product from Apple teamed with the wireless network of AT&T that lacks the ability to produce magical business growth.”

And talking of predictions that the iPhone would be too expensive …

Steve Ballmer: ‘Most expensive phone in the world … doesn’t appeal to business’

Laughing at the iPhone during an interview in early 2007 was perhaps the biggest mistake of Steve Ballmer’s career. At the time, the Microsoft CEO didn’t understand why anyone would want a $500 iPhone when they could get a crappy Motorola Q with Windows Mobile for just $100.

“$500 full-subsidized with a plan! I said that is the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard, which makes it not a very good email machine,” Ballmer said. “Now, it may sell very well or not, I, you know. We have our strategy, we’ve got great Windows Mobile devices in the market today, we, you can get a Motorola Q phone now for $99, it’s a very capable machine, it’ll do music, it’ll do, uh, Internet, it’ll do email, it’ll do instant messaging. So, I, I kinda look at that and I say, well, I like our strategy. I like it a lot.”

He then spent the rest of his time at Microsoft trying to get back ahead of Apple with acquisitions and product launches that failed to impress the masses.

Microsoft marketing director: Ridiculous levels of hype

Ballmer wasn’t the only Microsoft employee who didn’t fancy the iPhone’s chances for success.

In January 2007, Richard Sprague, a senior marketing director at Microsoft, said he couldn’t “believe the hype being given to iPhone. Even some of my blindly-loyal pro-Microsoft friends and colleagues talk like it’s a real innovation and will ‘redefine the market’ or ‘usher in a new age.’ … Please mark this post and come back in two years to see the results of my prediction: I predict they will not sell anywhere near the 10M Jobs predicts for 2008.”

In the end, Apple didn’t sell the 10 million iPhones Jobs had predicted. It sold upward of 11 million.

BlackBerry: Just one more challenger in a crowded marketplace

Jim Balsillie, the co-CEO of BlackBerry manufacturer Research in Motion Ltd., called the iPhone just one more fish in a crowded ocean — and almost certainly no threat to the new BlackBerry 8800.

“It’s kind of one more entrant into an already very busy space with lots of choice for consumers,” he said. “But in terms of a sort of a sea-change for BlackBerry, I would think that’s overstating it.”

In a later book that revealed BlackBerry’s reaction to the original iPhone, co-CEO Mike Lazaridis said he was shocked Apple put a full-powered web browser on the original iPhone when RIM wasn’t allowed to do it with the BlackBerry.

“Apple’s got a better deal,” Mr. Balsillie said. “We were never allowed that. The U.S. market is going to be tougher.”

“These guys are really, really good,” Mr. Lazaridis replied. “This is different.”

“It’s OK — we’ll be fine<,” Mr. Balsillie responded. RIM’s chiefs didn’t give much additional thought to Apple’s iPhone for months. “It wasn’t a threat to RIM’s core business,” says Mr. Lazaridis’s top lieutenant, Larry Conlee. “It wasn’t secure. It had rapid battery drain and a lousy [digital] keyboard.”

Nokia CEO: No reason to change

None of the major smartphone makers of the early 2000s considered the iPhone a threat, including Nokia. The company’s CEO downplayed Apple’s approach to the market. He was fired three years later and Nokia was eventually purchased by Microsoft after it failed to catch up to Apple.

“I don’t think that what we have seen so far [from Apple] is something that would any way necessitate us changing our thinking when it comes to openness, our software and business approach,” he said. “But the fact that Apple is entering the market, in general, I think will stimulate this market, it’s very clear. I think it will be good for the industry and I very much welcome that.”

Bloomberg: The iPhone will only appeal to ‘a few gadget freaks’

Betting that the established giants in an industry are susceptible to disruption carries long odds. Imagining that the likes of IBM in the 1970s, or Microsoft in the 1990s, or Apple or Google today could be taken down a peg by an innovative new technology isn’t an easy thing to do.

That’s the stance Bloomberg writer Matthew Lynn took in a January 2007 editorial after the iPhone was announced. Writing it off as “nothing more than a luxury bauble that will appeal to a few gadget freaks,” Lynn went on to suggest that the iPhone’s impact on the mobile industry would be minimal.

“The big competitors in the mobile-phone industry such as Nokia and Motorola won’t be whispering nervously into their clam shells over a new threat to their business,” he wrote.

For some reason, the article’s no longer online.

PC Magazine: The bloom will soon be off the rose

Jim Louderback, then-editor of PC Magazine, bemoaned the fact that nobody would take him up on his bet that the iPhone would flop. Louderback thought the new device would sell quickly to early adopters, then rapidly experience a fall in sales.

To be fair to Louderback, his reasoning was at least rooted in history. A surge of early adopter sales and then a fall-off was exactly what happened to the original Apple Macintosh in 1984 (although the Mac had long since corrected course). His reasons for the iPhone’s predicted doom came down to five things: lack of physical buttons, slow email functionality, poor battery life, slow internet and high price.

Gene Munster: The iPhone will sell tens of millions per year

Not everyone predicted doom, though. Among the sane voices was Piper Jaffray analyst Gene Munster. Munster has taken a bit of battering for his repeated suggestions over the years that a physical Apple television set was right around the corner. When it came to the iPhone, however, he was on the right side of history — albeit slightly overzealous.

In 2007, Munster confidently stated that the iPhone would be a 45 million units-per-year business by 2009. In 2009, it sold 20.73 million units — making Munster’s prediction wrong. The fact that Apple now sells upward of 200 million units at least means he had the right idea, though.

He was also right about the iPhone’s potential usage: “It is critical to keep in mind that the iPhone will be a combo device (iPod and mobile handset), which will attract more than just a mobile phone customer,” he wrote.

Additional reporting by Buster Hein.