Apple (AAPL): The iPhone’s Grandiose Plans

Steve Jobs sees that smartphones, especially the Apple (AAPL) iPhone are the future of computing.  Who needs a PC when a handset will do?

To get to Mr. Jobs goals, Apple "will open its App Store, an online bazaar that will attempt to do for mobile applications like games, reference guides and other software what Apple’s iTunes Store has done for music," according to The Wall Street Journal. Jobs calls his new phone a "computing platform."

Apple may have gone a bridge too far. The obvious reason is that companies which have much wider handset and mobile software distribution than Apple can ever hope to have will continue to push their agendas. Even if Jobs can sell 20 million iPhones a year, Nokia (NOK) sells over 400 million and it is pushing rapidly into the software and content businesses.Nokia controls its own open system, Symbian, which is the most widely used mobile software platform in the world.

Chasing Nokia are relatively formidable companies including Microsoft (MSFT) and Google (GOOG). None of these companies wants to be stuck on the PC if handsets become the next computers.

The trouble for all of them, and for the Apple initiative in particular, is that mobile devices will never be the next PCs. Wall St. only has to look at the current versions of the insanely popular Mac. With each generation it gets more computing power, more memory, and more storage. Monitors tethered to the Mac are now the size of wide screen TVs. Consumers want bigger screens for gaming, movies, and business applications.

The PC is "always on". In other words, it is forever connected to the internet. Take a handset outside its cellular service area and its is no better than a brick with a keyboard.

The mobile device will be useful for e-mail, music, modest web access, and phone calls. It will never match the power or utility of the PC. 3G and WiMax PC connectivity will make the computer’s case even stronger.. Google is finding that out with its Android mobile platform. Microsoft has never had more than modest success in the wireless world.

Now Apple can find out that the iPhone is not a Mac, or a PC of any sort.

Douglas A. McIntyre