In scenes reminiscent of ticket lines of old, when customers actually had to camp out days in advance in front of local box offices when shows by the Stones, Led Zeppelin or Bowie went on sale, future iPhone owners firmly planted themselves outside their local Apple stores so they could secure bragging rights for owning the next big thing.
What’s more, some potential customers staking out space in front of Apple stores had almost as much praise for Apple’s CEO as for the company’s latest music playing gadget.
"Words can’t express why I want an iPhone, " said 24-year-old college student Jessica Rodriguez as she relaxed in her folding chair outside Apple’s Fifth Avenue store in New York City. "The main reason is Steve Jobs is a genius. He’s a great innovator. It’s going to be the next big thing in cell phones."
How many other CEOs can claim such loyalty? While most consumers would be hard-pressed to name a bigwig at a major record label or a big-time concert promotion company, people seem to be as enamored with Jobs as they are with iPods, iPhones and everything Apple.
In fact, when it comes to famous faces, Jobs may very well be the most trusted man in America. Rarely has a corporation’s top gun generated so much trust and allegiance as the co-founder of Apple. Sure, Bill Gates is richer, but the vision of Microsoft’s co-founder hawking his company’s products is just as likely to send citizens ducking for cover than entice them to buy Zunes.
But while Rodriquez claimed her spot in front of the NYC Apple store on Tuesday – four days before iPhone’s June 29th launch – she wasn’t first in line. Three other people had the same idea.
Like 21-year-old Chicago resident David Clayman, who was vacationing in the Big Apple when he caught a dose of iPhone fever. But then, Clayman wasn’t standing in line to buy just one iPhone. He wanted three.
Has there ever been so much hype for a cell phone, OK, a music player / cell phone / video player / Web device, before? And will the shipped product live up to all that hype?
Despite the anticipation over Apple’s latest digital dingus, not everyone sees an iPhone future. Consumers who have already amassed a large digital music collection via Napster, Rhapsody or other, non-iTunes online music stores probably aren’t any more likely to buy an iPhone than they are willing to trade in their Zens and Sansas and mutate into iPod people just because the latest toy comes with a dial tone.
Consumers like 24-year-old office clerk Carlos Gomez, who spends a healthy chunk of his paycheck each month on music and likes the iPhone’s look and feel. However, for Gomez the deal breaker was iPhone’s inability to download music over a wireless network. That’s because the iPhone is also an iPod, and downloading comes via the computer from iTunes.
So far, Sprint and Verizon are the only two wireless network providers in the U.S. that sell music directly to customers, and neither company supports the iPhone. That back-end honor goes to AT&T, the only wireless network supporting Apple’s latest bundle of digital joy.
"The whole idea of on-the-go instant gratification isn’t there," said Ted Cohen, managing partner of media consulting firm Tag Strategic in reference to the iPhone’s iTunes dependency.
Critics are also pointing out AT&T’s lack of speed when it comes to streaming video from the Net. AT&T’s data network isn’t exactly known as the swiftest connection on the block, and streaming videos to the iPhone via AT&T’s data net has been described as "taxing."
One video streamer, YouTube, has stepped up to that particular AT&T challenge, saying it has prepped 10,000 videos for the iPhone and will encode the remainder of its video inventory into the H.264 format used by iPhone within the next few months. Plus, while iPhone only downloads music from iTunes, it does have WiFi capabilities for Web surfing.
But will lack of a direct-to-phone wireless music connection make that big a difference in sales? When it comes to online music stores, iTunes is the gorilla in the room, leaving barely enough room for competitors to exist, let alone thrive. A recent NPD Group survey named iTunes the third-largest music retailer in the United States, trailing only Wal-Mart and Best Buy.
Although some potential buyers may be put off by iPhone’s lack of wireless music delivery capabilities, others might find the combined price tag for the phone and AT&T a little more daunting. AT&T requires iPhone customers to sign for a minimum two-year plan, which could result in customers paying anywhere from $60 to $100 per month. Combine that with iPhone’s $500 starting price, and it’s easy to imagine consumers paying as much as $3,000 for iPhone privileges.
But despite its drawbacks, there is no denying that iPhone is the gadget of the year. Or, for that matter, the gadget of the last two years. No other device has arrived with as much hype and street cred as Apple’s latest offspring. And the techno lust for iPhone isn’t limited to those lining up in front of Apple stores days before iPhone’s debut.
"My dad thinks I’m crazy," said Rodriguez of her 76-year-old father as she stood in line outside Apple’s NYC store four days before the big day. "But then he saw the commercial and said, ‘I want it.’"
Sounds Of Silence
If you couldn’t connect with your favorite Internet radio station on June 26th, you weren’t alone.
The last Tuesday in June was a "Day Of Silence" for the Internet radio biz with many stations cutting back on their music streams if not shutting down altogether for 24 hours.
It was the fledgling industry’s latest protest against new royalty rates that many claim will force small Web radio operators to look for another line of work.
Last March the Copyright Royalty Board issued new rates – .08 of a cent per song, per listener, retroactive to 2006 and rising to .19 of a cent by 2010 – a hike many Netcasters claim represents a 300 percent increase in fees.
Of course, each side is spinning its version of the royalty issue, with SoundExchange, the non-profit group tasked with collecting fees from Netcasters, saying Web radio doesn’t want to pay for the music it plays.
But Netcasters aren’t the only ones decrying the new rates. Both the Senate and the House have almost identical bills that, if passed and signed into law, would establish rates similar to what satellite radio already pays – about 7.5 percent of revenue. Called the "Internet Radio Equality Act," the bills have already accrued more than 100 co-sponsors.
Since Congress got into the act, SoundExchange has kind of backed off its original stance, by granting a reduction to small Webcasters with the royalty clearing house defining "small" as those stations that earn less than $1.25 million. Webcasters weren’t too thrilled with SoundExchange’s proposed olive branch, pointing out that the difference in royalty fees for a station that makes just a dollar more than that $1.25 million would effectively put that station in the poor house.
Now we’re in what may be the home stretch of the Internet radio royalty controversy, with Netcasters scheduled to make their first payments under the new system on July 15th. That is, if Congress doesn’t take any action, or if SoundExchange doesn’t have a change of heart.
But the momentum raised by Internet radio’s Day Of Silence carried into the Day After The Day Of Silence as Net radio listeners continued to contact their representatives. Apparently a lot of people really, really love their Web radio.
"You folks continue to amaze me," blogged Pandora.com founder Tim Westergren. "You brought down the server system for the country’s most robust provider of online petitions (they said they’ve NEVER seen anything like it before). Virtually every congressional office was jammed with phone calls all day. Make no mistake – each call makes a HUGE difference."