Strand Consult: Denmark’s illegitimate iPhone-angry pundit-nutter
December 15th, 2009
Daniel Eran Dilger
When the iPhone first appeared in 2007, a variety of pundits and analysts lined up to explain why Apple would fail. Having been since proven wrong, they’ve mostly slinked off into quiet obscurity, except for John Strand. He’s wrong, here’s why.
While Enderle’s outlook was saturated with hysterically emotional and almost religious fervor, including dire warnings that the iPhone’s lock screen would result in women getting raped because they couldn’t make an emergency call easily enough (because Enderle didn’t realize that the iPhone had an emergency call button) and a bitter castigation of the iPhone as being “damned,” Strand attempted to sound like an intellectual in his criticism of the iPhone.
Like other critics of accepted scientific and intellectual thought, from climate change doubters to creationists to flat earth proponents, Strand’s initial scathing critique of the iPhone involved data elements that masqueraded as legitimate statements of fact and analysis that included reasonable-sounding bits of logic, at least to people who have little capacity for critical thinking and no specialized knowledge of the mobile industry. This made Strand’s reports eminently quotable by tech pundits and reporters, most of whom have no real understanding of how the tech industry actually works.
Rather than refer to the iPhone as “damned” as Enderle did in his attempt to vilify the device using American-style moralizing, Strand called it the “Paris Hilton of mobile phones,” exploiting his readers’ own deep-seated fears of inadequacy with a mix of chest-beating machismo and celebrity ostracism targeted at a personality deemed too femininely attractive for her own good.
Strands’ “Paris Hilton white paper” on the iPhone made a series of ten claims back in 2007 that in retrospect are all as laughable as those of any other rabidly unhinged anti-iPhone pundit at the time. That didn’t stop a bevy of Internet “news” sources from regurgitating his fluff without any criticism.
Strand Consult gets it wrong ten times out of ten.
1. Strand said the iPhone’s design, form factor, price, and user interface would limit it to a relatively narrow audience.
That certainly didn’t happen, even at the iPhone’s initial, relatively astronomical price point of around $600. And since its release, everyone’s been copying the iPhone’s design, form factor, and user interface, from Nokia to RIM’s Blackberry, the Palm Pre, and in the more popular Windows Mobile/Android phones.
It would be difficult to make a more incorrect prediction about the iPhone, but Strand managed to present nine more prognostications of doom, seemingly in an attempt to do just that.
2. Strand next claimed that the mobile operators who initially launched the iPhone, including AT&T, would discourage any interest in the iPhone by other rival operators.
Instead, the iPhone helped successfully launch the fledgling AT&T Mobility brand from its struggling identity as Cingular Wireless that year, and went on to become the most famous phone in the world and the primary object of affection for every mobile operator on earth that could get its hands on the device.
Rival mobile operators in various countries have either tried to maintain their own exclusive deals with Apple to carry the iPhone or have worked to muscle their way into and undermine such exclusive deals in order to gain access to the customers the iPhone attracts.
Even Verizon, AT&T’s primary rival in the US, has publicly made comments to the effect that it would like to be able to carry the iPhone were it able to work out a deal with Apple.
3. Strand insisted that it was difficult to send SMS messages from the iPhone, and therefore that operators wouldn’t want to carry it because they would be missing all that easy revenue from texting.
In reality, the iPhone made it very easy for users to send text messages, and more importantly made it both viable and attractive for users to sign up on premium-priced data plans, something that earlier smartphones hadn’t been very successful in doing.
And while it took Apple two full years to deliver MMS capabilities in iPhone 3.0, the iPhone’s ability to text and its users’ voracious appetite for texting resulted in AT&T delaying the feature’s rollout until the company felt it could handle the massive volume of data that it anticipated that its iPhone subscribers would demand of the network.
From Apple’s perspective, SMS and MMS support were secondary to more open protocols for communication. The iPhone interface initially focused on rich email messages, which were free for users to send, unlike MMS messages, which in the United States are usually billed per message or require a separate service bundle fee.
Apple’s support for open data apps such as Mail generated demand for far more lucrative data services, relegating ancient, mobile-proprietary services like SMS/MMS into a distant second place for both users and mobile operators, something that Strand failed to anticipate completely.
And while Apple now accommodates both SMS and MMS features on the iPhone, its competitors are still struggling to catch up with the iPhone’s original savvy in rich, desktop-class mobile email with support for file attachments, complete and secure Exchange Server support (something the Palm Pre and Motorola Droid are significantly less capable of supporting), and affordable and comprehensive push messaging features.
4. Strand worried that iPhone customers experiencing hardware issues would be stymied by weeks-long repair times, based on anecdotal experiences with iPod repairs.
Of course, if the iPod were really plagued by weeks-long repair binges, it’s unlikely it would be the world’s most popular music player. So rather than being a justified concern, Strand’s fourth prediction was really just another hysterical, ridiculous effort at irrational scaremongering.
At the same time, Microsoft’s appalling hardware reliability problems with the Xbox 360 do not seem to have impeded the popularity of that device among its user base, so perhaps Strand’s entire suggestion is simply malicious wishful thinking.
In any event, users who experience a problem with their mobile phone are going to be inconvenienced no matter what kind of phone they have. Both in 2007 and then again two years after Strand’s prediction, the iPhone was rated by 82% of users in a ChangeWave survey as providing a “very satisfactory” overall experience, well ahead of its second-place competitor and far higher than the majority of other mobile phones.
5. Strand suggested that Apple might have no problem selling 10 million phones to its loyal fans, but would then hit a wall, unable to reach general audiences. He also suggested that Apple’s sales volumes will be dwarfed by Nokia’s no matter how many devices Apple sold.
As it turns out, Apple did indeed have no problem selling 10 million phones, but also had no problem reaching general audiences with its new phone. In fact, the iPhone followed the iPod in successfully reaching broad audiences of non-Mac users.
In several quarters, Apple has sold around three times as many iPhones as it has Macs; clearly, a lot of those iPhones are being sold to new customers who are attracted to the product on its merits, not simply starstruck Apple loyalists as Strand fantasized.
And while Nokia still makes a lot of smartphones, Apple’s share of the market has grown rapidly while Nokia’s has just as quickly declined. The iPhone can now claim almost half as much market share as Nokia worldwide among smartphones. Nobody in the smartphone business, including Nokia, maintains any illusion that the iPhone doesn’t matter in terms of sales volume.
6. Strand also predicted that competitors in the mobile space would quickly respond to the iPhone and launch technically superior models that would embarrass Apple, resulting in negative press presenting the iPhone as technically inferior.
In retrospect, Strand’s prediction is hysterically comical. Nokia/Symbian, Palm, Windows Mobile, Android, and RIM/Blackberry have all attempted to ape the iPhone’s look and its App Store, but are now going on three years deep into their imitative efforts and have nothing to show that anyone can even plausibly suggest to be on par with the iPhone, or for that matter even in a truly competitive second place behind it.
The leaders in the mobile phone industry all responded to the iPhone by falling on their face. LG and Sony Ericsson raced me-too models to market based on Windows Mobile that were complete disasters, followed by me-too models based on Symbian that were complete disasters, and are now set to deliver me-too models based on Android. For anyone who believes this third attempt will be wildly successful, I have an unfinished bridge to nowhere which doesn’t run any desirable, commercial apps to sell you.
While there are phones with fancier hardware specifications and phones with software features that are currently unavailable on the iPhone, there are still no models that anyone in the mainstream tech press will endorse as being equal to the iPhone, let alone technically superior.
In fact, the iPhone is still so far ahead in its third year that many pundits are now rooting for alternatives just to provide Apple with some motivating competition, even as they acknowledge that the alternatives they celebrate are well behind the iPhone in terms of integration, completeness, usability, application support, and general sophistication.
Inside Google’s Android and Apple’s iPhone OS as core platforms
Inside Google’s Android and Apple’s iPhone OS as business models
Inside Google’s Android and Apple’s iPhone OS as advancing technology
Inside Google’s Android and Apple’s iPhone OS as software markets
7. Strand also worried about the iPhone’s initial inability to run third-party applications. He anticipated that Apple’s stance on creating a market for third-party apps might change, but predicted that developers wouldn’t support the iPhone because of his anticipated outlook for a limited user base. He also said the iPhone’s built-in music player and web browser would dilute third-party interest.
When the iPhone debuted without a mechanism for installing third-party apps, there was broad concern about how Apple would manage its new platform. At the time, I predicted Apple would create a limited market for third-party apps, based on the company’s exploration into selling iPod games through iTunes, in partnership with a limited number of established developers. I anticipated Apple would initially limit developers to a web-based sandbox of Dashboard style widgets, but it was clear and obvious that Apple had some intent to create a third-party market for iPhone apps, if for no other reason than to fill the conspicuously blank space Apple left open on the iPhone’s home screen.
It turned out that Apple’s third-party platform plans were far more open and egalitarian and sophisticated than anyone predicted. Absolutely anyone can create iPhone applications and sell them through Apple’s marketplace in iTunes. By the time Apple released its SDK in early 2008, and opened its App Store in the middle of that year, there were over 5 million iPhone users and a growing number of iPod touch users to market these new apps to; so much for Strand’s prediction that developers wouldn’t be interested in the platform for a lack of users.
It was also not a problem that the iPhone’s bundled music player and web browser were the best examples of mobile software to ever appear on a phone. Unlike Windows Mobile and the Palm OS, the iPhone’s bundled apps did not demand an immediate replacement from a third-party. Rather than repressing developers’ interest, this focused third-party development into categories that were outside of Apple’s core competency, opening up lucrative new opportunities in mobile gaming and other specialized software that benefited Apple, iPhone users, and distanced third-party developers from any direct conflict with Apple’s first-party bundled apps.
It’s now not even controversial that Apple is far and away the most successful vendor of third-party mobile apps. Efforts by Nokia/Symbian, Windows Mobile, Android, Palm and RIM’s Blackberry to copy the iPhone App Store’s success are both years late and far behind both in terms of developer interest and in addressable market share audience, a factor that is frequently complicated by platform fractionalization issues. Again, Strand wasn’t just sort of wrong here, but completely and entirely off base on every statement he made about the iPhone’s prospects for third-party apps.
8. Strand predicted that the general media’s initially positive hype around the iPhone would quickly wear off and make way for negative denigration that Apple would be unlikely to escape from unscathed.
Apple’s first presentation of the iPhone was greeted ecstatically, but almost immediately critics came out of woodwork to imagine potential flaws. For the next six months, competitors’ shills and Apple-haters of all stripes disgorged a flood of contempt addressing nearly every aspect of the phone. Even so, the iPhone’s initial debut was wildly successful, even at its initially high price point.
In the two in a half years since, the iPhone has received both gushing accolades and a steady stream of desperately disparaging vilification, with a significant portion of the latter coming from Strand himself. However, despite every shovel of mud that detractors have tried to hurl at the iPhone, it has remained at the top of the charts, the top of user satisfaction surveys, and has consumed more attention from media pundits, mobile developers and industry wonks than any other mobile device in history ever.
9. To fill out his list of ten reasons to be afraid and skeptical of the iPhone, Strand revisited his own number four and number eight to predict that dissatisfied iPhone users would ultimately overshadow the positive noise of Apple’s blindly loyal fans, saying that the iPhone was destined to have the same fate as Paris Hilton: either to be loved or hated.
Again, two and a half years into the iPhone’s existence, it still maintains extraordinarily high user satisfaction rankings far above those of any other mobile phone available. And in reality, while Apple does have fiercely loyal fans, it is precisely those fans who generate the majority of complaints (and the discussion of those complaints) about Apple’s products.
No other phone vendor can manage to generate the same kind of excited lines of users camping out overnight for its products, but no competitor also suffers from the same type of irrationally demanding, irritable, and unreasonably perfectionist fan base with the time and resources to devote hours upon hours to discuss and delineate every personal quibble they have with Apple’s offerings.
Additionally, Paris Hilton isn’t loved or hated, she is loved and hated by nearly everyone, which is often the case with, and the cause of, nearly every celebrity in a general sense. Essentially, the worst thing Strand could manage to say about the iPhone is that it is a celebrity: celebrated by society, and therefore open to being a recipient of both loving adoration and jealously envious hatred. There is no doubt Nokia, Microsoft, HTC, LG, RIM, Samsung, Motorola, Palm, Sony Ericsson, and every other phone and or platform vendor on earth would love to see their products attain a similar level of celebrity. But they haven’t.
10. Finally, Strand noted how impossibly difficult it is for any company to become a major player in the highly competitive mobile arena, citing the efforts of Phillips, Siemens, Dancall, Sendo, BenQ, and even Microsoft, which Strand held out as an example of a powerful company that spent 4 to 5 years desperately trying to achieve the same type of market share that Apple indicated it planned to achieve in its first year and a half on the market.
Strand was clearly on the same wavelength as Palm CEO Ed Colligan, who famously complained that Apple was “not going to just walk in” and eclipse what his company had worked on for years to accomplish, as well as Microsoft CEO Steve Ballmer, who similarly scoffed at the potential for Apple to achieve even a fraction of what Microsoft had in mind to achieve over the next couple years.
Of course in hindsight we know that Apple eclipsed Microsoft immediately and left Palm in the dust. Apple performed better than it had publicly predicted it might. And the threat of the iPhone shook the foundations of every mobile company on earth, leaving even heavyweights like Nokia, Motorola, LG, Samsung and Sony Ericsson all quivering in their boots. We don’t even have to address bit players in the Symbian family or regional carriers with grand aspirations of making a minor mark in the mobile industry. Apple is the belle of the mobile ball, even if every other princess in attendance has been left bitterly jealous of it.
Stranded while sailing on the wide consultancy.
Strand’s 2007 predictions pertaining to the iPhone were all absolutely, egregiously wrong from start to finish. Every point was absolutely backwards, ill-conceived, and frequently resorted to childish ranting. His efforts to demonize the iPhone as a girlish Paris Hilton were later echoed in Microsoft’s anti-Get a Mac ads, where individuals fretted that Apple’s products were too cool and sexy for their taste, and was more recently picked up by Verizon’s Droid advertisements, which mocked the iPhone for not being as square and thick as a “man’s phone” should supposedly be.
Strand’s consultancy doesn’t aim its white papers at industry analysts or investors, but at lazy journalists who reprint press releases generated by individuals as if anyone who says anything is a legitimate source of news that should be handled with the same seriousness as actual facts or as cogent analysis supported by real data that meshes with observable reality.
Rather than being embarrassed into the shadows of illegitimacy, Strand has ignored the 100% failure rate of his desperately biased analysis and still continues to parrot off almost identical claims, emboldened by the ridiculous press attention afforded to him by brain-dead reporters working for everything from the usually credible Reuters to the rarely legitimate ITWire.
We have always been at war with Eurasia.
Speaking of himself in the majestic plural, Strand insisted as recently as August of this year, “Our research shows that there is not one single Apple partner in the world among the mobile operators that has increased their overall turnover, profit and market share due to the iPhone.”
That bizarre claim is particularly ridiculous given what the first and largest iPhone carrier, AT&T, reported in its second fiscal quarter earnings call this year:
“The day of the [iPhone 3GS] launch was the best sales day ever for our AT&T retail stores and our website, att.com, had its largest order day ever. For the full second quarter, AT&T iPhone activations totaled more than 2.4 million. 35% of those activations were for customers who were new to AT&T. Better than half of the upgrades previously had no data plan. Better than 80% of the upgrades were from a non-iPhone device or a 2G iPhone, increasing ARPU (average revenue per unit) and in the case of 2G upgrades, eliminating our revenue share with Apple. And the iPhone subscriber characteristics continue to be terrific. ARPUs are significantly above our post-paid average, churn is much lower, recurring margins continue to be high and our iPhone customers continue to have very strong MPVs.”
Other carriers have unsurprisingly reported similar results, including O2 in the UK and Optus in Australia, despite the carriers’ clear interests in maintaining healthy relationships with other phone makers apart from Apple. If the iPhone is such a terrible deal for mobile operators in general, it sure is peculiar that Apple’s been able to sign them up all around the world without any resistance.
Hanging by a single thin Strand of sanity.
To anyone who’ll listen to him, Strand will reel off an animated denial of reality, insisting that the iPhone App Store doesn’t matter because it’s not the first effort to ever sell mobile or PDA software; stressing that Apple’s monstrous share of smartphones globally doesn’t matter because so many simple mobile phones that don’t do anything are still sold around the world to users outside of the smartphone market (a message that smacks of Paul Thurrott’s oft repeated claims about why the Mac platform doesn’t matter); and reiterating that the iPhone is pretty like Paris Hilton but that he (somewhat creepily) really “wants to know what it looks like inside.”
Apparently oblivious to how completely upside down and backwards his analysis of the iPhone has proven to be over the previous two years, Strand insists that he’s never been wrong over the last 14 years of playing the role of a mobile industry pundit. Really? There’s ten examples above, and pretty much everything that tumbles from his lips adds itself to that list as well.
Faith moves mountains of FUD.
Strand continues to promote his latest white paper, which explains to anyone who’ll read it just how tragically unsuccessful the iPhone is and has been and will be, by deflecting any attention away from his wildly inaccurate predictions and instead scapegoating iPhone users as being the real problem.
Apparently, if the millions of iPhone users weren’t all so deluded and brainwashed by Apple, his erroneous predictions would be true, and nobody would be buying the iPhone, nor interested in developing for it, nor interested in carrying it on their networks. Typically, people who believe that the rest of the world is insane are themselves in need of some course correction.
The public’s perception of the iPhone, Strand claims, has been warped by a vast conspiracy of iPhone fans, lying reporters, and evil companies that apparently stand to benefit from the iPhone. “In reality, the iPhone is surrounded by a multitude of people, media, and companies that are happy to bend the truth to defend the product they have purchased from Apple,” Strand claims, apparently completely blind to every facet of evidence that suggests the contrary.
If anyone’s bending the truth about the iPhone, isn’t it professional talkers like Michael Arrington in his blog entries at TechCrunch, where he regularly tries to imply that Apple’s platform is falling apart because of the small handful of developers who have complaints to lodge against Apple’s policies? Or the clueless columnists in the tech media like Galen Gruman, who was so quick to attack the iPhone that he scribbled together over-the-top, false accusations about Apple “lying” to Microsoft’s Exchange Server because he didn’t understand how security policy is implemented by Microsoft?
Really, any attempts to suggest that the iPhone is insulated from any and all forms of criticism are just as ridiculous as Strand’s 2007 predictions that the iPhone was headed nowhere, and his recent comments that deny reality to suggest that the iPhone doesn’t matter, has had no impact on the industry of any importance, that nobody should be talking about it, and that he has never been wrong in making predictions about the mobile industry and the iPhone in particular.
Any journalist who cites Strand Consult as if it were anything other than a source of reality-denying delusion propagated by a single man with a terrible track record for predicting mobile industry trends is just as illegitimate as anyone who quotes the Enderle Group or Roger Kay of Endpoint Technologies or Roger Entner of IAG Research or Philip Solis of ABI Research. All of whom are among my favorite bunch of monkeys.
Why Dan Frommer and Scott Moritz Are Wrong on iPhone Sales (Enderle)
New York Times Violates its Own Microsoft Shill Policy (Kay)
Randall Stross attacks the iPhone in the NYT using shills (Entner)
More Absurd iPhone Myths: Third Party Software Panic (Solis)