iPhone vs. N95 (II): Shrink Wrapped Paradigm Shift

Paradigm shifts and shrink-wrap go together. In the last couple of weeks, I purchased two phones – the Nokia N95 and the iPhone (I was going to make you guess which one I had in my pocket, but I couldn’t keep it secret – I have both). While getting them operational, I ran smack into the clash between two radically different perspectives on the small devices that are impacting every part of our lives. Through decades of work on cellular telephony, Nokia has shaped the way that we think about cell phones. Now Apple is pitching a new model. Two competing paradigms for a booming field. Yep, a paradigm shift complete with SIM chips. And the future of mobile media depends on whether we buy into the new paradigm.

I bought my N95 (http://tinyurl.com/25x9os) online through Nokia.com. It got here in 4 days. I made sure that all my contacts on my old Nokia 6620 were copied to the SIM card. Then I popped off the back of the 6620, pulled out the battery, and removed the SIM. I slid it into the N95 and voila! Charging the new battery was the most time-consuming part of the whole process and I never touched a manual, read a FAQ or called tech support. It worked the way cell phones have always worked. The N95 is based on the standard cell phone paradigm – it is a cell phone.

But the iPhone setup experience was different. First I need to clarify. I bought the iPhone but I don’t have it (for you parents, that makes perfect sense). My 16-year old son, Scoop, has the iPhone – he helped move the NMI this summer for no pay so I owed him big-time. And, of course he would have to have the 8GB – he is a Shamp, after all.

On Thursday, 7/5, we drove past three small AT&T stores to the big one owned by AT&T on the Atlanta Highway. Only the stores owned by AT&T, not individually owned franchises can sell the iPhone. As the hostess greeted us (yep, she had a waiting list) we were told it would be at least 30 minutes before we could talk to a sales rep. Finally, our name was called and Buffy introduced herself (don’t get the wrong idea about Buffy – she had big tattoos). Right off, they told us they didn’t have any iPhones in the store. A downer for Scoop. But they could take our order (and money) and have an iPhone shipped to us.

That was the easy decision. For the next hour and a half, the questions got harder. And the costs kept going up. First, we had to pick a data plan. Scoop has been behaving on a $5/month plan that got him 200 text messages, so we went on the low end iPhone plan -- $20 for 200 SMS messages and unlimited data. Do the math -- $599 for the phone, $15 more per month. In the first year, the iPhone is now going to cost me $779.

Then came a piece of bad news. I have a family plan with 5 phones. And since my wife and I are UGA employees, we have been getting a University discount – 15% a month. Sweet right? Buffy told us to kiss that goodbye. No discounts for the iPhone. Yep, Apple has twisted AT&T’s arm and made them agree to no corporate or group accounts for the iPhone. Only end-users. So if we wanted the iPhone we would have to forsake that discount worth around $12/month. Now the iPhone is going to cost $923 the first year. What I do for my children! Am I a great dad or what?

Buffy recommended that we review the rest of our bill as well. And she did a good job. There were some places we were spending too much and places where we could move to another plan and save. Plus, she found out that we were eligible for new phones on our contract. We got two more Nokia Phones (the 6126 – nice flip phone). Buffy even activated them in the store so they were working in 10 minutes (another seamless set up).

After 2 hours total in the store we were finally ready to purchase the iPhone and Buffy was just about to run my credit card when a breathless employee ran out of the stock room. “They’re here!” was all she said – and the joint began jumping. The FedEx guys had just delivered more iPhones. Scoop was stoked that he would be going home with one.

But we weren’t done yet. We had to activate the iPhone at home via iTunes– in fact, they sealed the bag the phone was in and told us we couldn’t open it until we were out of the door. The catch is that if we wanted to return the phone, it would cost us a 10% ($60) restocking fee. “OK, OK, we’re leaving.”

At home, of course we had to download the latest version of iTunes (a new version comes out every 15 minutes). Then we cradled the iPhone. A message came up telling us that it might be a few minutes. In fact, the newspapers have been running stories about an activation problem. But about 5 minutes later it was working. I was the first person Scoop called on his iPhone – isn’t that special?

So buying an iPhone is different than buying an N95. Why? The paradigm shift. The N95 is a cellphone. It works like a cell phone and you set it up like a cell phone. The iPhone is well, something else. Apple would have us believe it is more like a computer. And all the special steps in getting an iPhone running make it feel computer-like. You can’t buy the iPhone without a data plan that allows you to access the internet via the iPhone. You have to install new software on your home computer to get the iPhone to work. In fact, if you don’t have a computer with internet access, you really can’t have an iPhone. So to have an iPhone you have to buy into the computer. Like we should expect anything less from a computer manufacturer, right?

So the future of the iPhone (and I would argue the future of mobile media) boils down to how many people will shift to the new paradigm. Do they want a phone or a computer in their pockets, palms, packs, and purses. Are people going to be willing to go through the additional work to get the additional power of the iPhone. Buffy told me that some people grumbled a little with the extra effort necessary for the iPhone setup – but nobody walked away. You would expect that as the early adopters are rushing to the store in the first week. These are the people who are going to talk more ABOUT the iPhone than INTO it. But what about the millions of others, some of whom just want a phone? The next year will tell us which paradigm, the cell phone or the computer, will win out.
More next week – connectivity!