iPhone Realizes Steve’s Dream to Exploit Mac OS

If the iPhone succeeds, it will very quickly have numbers that could dwarf the Mac and run down the iPod. That alone could lead to a significant halo effect. But being a very visual device with a sexy flavor of OS X running on it (unlike the iPods whose interface now looks suddenly 1983 by comparison) this will expose millions to the real Mac experience, especially, if as expected, Leopard bears much similarity to the iPhone’s OS X.

In a marketing coup that, if you believe Steve, was partly luck from having to announce early so the FCC wouldn’t reveal the iPhone, Apple has had stunning marketing success of the iPhone already. Expressions like “most anticipated electronics device in years” are not uncommon. Writers from all persuasions seem to be lapping it up.

USAToday reported on Friday that the avalanche of headlines and TV news stories about the iPhone—which hits the market in June—already have generated $400 million in free publicity, says Harvard Business School professor David Yoffie. “No other company has ever received that kind of attention for a product launch,” Yoffie says. “It’s unprecedented.”

Consider, too, the secondary effect of that publicity: the iPhone’s halo effect will already be happening. Anyone who’s seen images of the iPhone could already be curious to see more of that OS and could be visiting their local Apple Store as a result. Interestingly, the more I see the iPhone images, the more Tiger’s GUI looks dated. The iPhone may mean Leopard will have to carry a revamped GUI so those users don’t suffer a bit of an anti-climax.

After years of banging their heads against the beige world of Windows and PCs, one that couldn’t even garner much more than a “yippity doo” over the new significantly sexier Windows, journalists seem genuinely excited about the iPhone. It appears they see it as having greater significance than just in the phone sector and may revolutionize the whole gadget market.

Apple has a history of its innovations transcending other markets. The most memorable of recent years was the simple colored translucent casing of the iMac, which became the ubiquitous styling of everything from toasters to pencil sharpeners. The iPhone has the potential to cause a total rethink of the design of gadgetry of all kinds.

If, as hoped by Apple, it manages to sell 10 million iPhones in the first twelve months, that more than doubles OS X’s presence in consumer-land. In January, Apple announced it sold 1.6 million Macs in the previous quarter. Although that figure was inflated by seasonal and other reasons, if we suggest Apple sells 6.4 million Macs per year, then adding 10 million OS X-carrying iPhones increases OS X’s numbers to 16.4 million per year—a whopping 156% increase in OS X’s presence. Of course this is a bit of mathematorial gymnastica that doesn’t take into account Windows’ own mobile market share, but it does lead to the second and more important advantage.

That same quarterly report had Apple selling 21 million iPods, yet none of those exposed the user to the OS X experience, the closest being using iTunes. Yet, as my friend Halo Girl attests, that sampler in iTunes has been enough to convince many to switch. Imagine then the effect of using the iPhone’s interface? (Although expect future iPods to also sport a trimmed down OS X.)

The iPhone will expose many to OS X who will be using it alongside a decidedly sadder looking Windows, even Vista, which despite Microsoft’s best efforts, still has the look and feel of Windows. A sewer rat wearing Armani, you might say.

It’s not all one-way traffic for Apple, though. That spiffy looking sewer rat could still spread a plague to stop Apple’s potential juggernaut.

Mobile Vista on a phone device could seriously dent Apple’s efforts. And as Windows 95 showed, even a 10 year head start and an inferior product doesn’t mean anything. Despite what we’d like to believe about users being more savvy nowadays, 1995 could easily be repeated simply because of the familiarity of the “W” word.

That same familiarity contributed to Microsoft’s success in the handheld computing market. That is, Windows on PCs had a significant halo effect on Windows-based PDA sales.

Apple has great potential to achieve the same but the other way around, with the iPhone leading to sales of Macs. With its very sexy GUI, the iPhone has the potential for a much more significant halo effect than the iPod ever did, provided Apple keeps on guard against that rat.

At MacWorld 1997, Steve said Apple’s two core assets are the Apple brand and Mac OS. He described Mac OS as “yet to be fully exploited” and that “at the core, Apple is about the Mac OS.” The Mac OS has moved on to become Mac OS X, but I don’t doubt that that still holds true.

Ten years on, it looks like we are finally seeing the realization of Steve’s desire to fully exploit the Mac OS.