…in the market will benefit from Apple's arrival into the mobile market because they've just upped the game, they've moved the goalposts and everybody's running to catch up and from a customer point of view that's fantastic.
The whole mobile data space — the mobile internet — has just been transformed. And what we proved together — Apple and ourselves — is if you put the right device with the right customer experience with the right tariff proposition together and if you get the package right there is no limit to people's appetite for data.
Has the iPhone delivered what you expected?
With the initial launch what we found was a huge affinity with existing Apple customers.
What I think has happened over the nine months or so since then the story of the iPhone has just started to influence the whole mobile device space. So the people who queued outside our stores back when we first launched, if you'd done a survey… probably eight out of 10 of those customers were existing Apple customers, probably Mac customers who absolutely knew and loved Apple so they were very much the early adopters.
What we've moved through to now is… as people have got to play with it and got to see the experience, it's moved from being an Apple aficionado product to a hugely broad demand product because it's a fantastic user experience. And that is the key and that's Apple's great strength.
Have you been disappointed by the number of bugs in the iPhone?
You go through the blogs and I'm not being complacent about it but the vast majority of the network problems were actually with AT&T in the States not in the UK. There are always gremlins on devices but actually I think the iPhone has had remarkably few issues with it. One of its great strengths is the fact you can update the software regularly… the [iPhone] user can upgrade the software whenever they want. You can just keep evolving the customer experience on the platform.
What could the iPhone do better?
One thing on the first device, which they've now solved, was… the ability to send texts to more than one person… So multiple texts was a frustration but they fixed that with a software update months ago.
Some people have said 'wouldn't it be nice to have two-way cameras for doing video calling?'. And you know what, that might be something [Apple] do in future — I don't know. But the actual market for video calling is not a huge market to be honest with you. So I could tell you lots of things I've seen on blogs that people would like: what I haven't seen is anything on those blogs where they say that's a huge market-demand item and they've missed it.
I have seen some niche things which could be there but also if you're trying to package the right experience at a sensible price you can't put everything on the one device.
Another example is the [iPhone's two-megapixel] camera… Some of the handset manufacturers are just about to launch the first eight-megapixel cameraphone into the market and you do then have to question whether that's a camera or a phone and what the benefit is relative to the additional cost…
There will be a market for megapixel [cameraphones] I'm sure, but it won't be the huge breadth of the market and Apple's approach is they want this to be a broad product that's available to the broadest range of people and provides the broadest experience. They're not looking at a niche product. They've been very public in setting themselves a target of tens of millions of devices to sell around the world.
The iPhone doesn't support MMS but it has a great camera and it has email functionality and therefore actually the ability to take a picture and share it is there, it's just using a slightly different format of technology.
How has the business world responded to the device?
In the business and corporate [world] the appetite has been very big and we've seen a significant appetite from what I would have described as traditional BlackBerry users, so I think what we're seeing is the market for that type of integrated device is growing and what the iPhone is doing is broadening the category. For some people it may be a choice between BlackBerry and the iPhone or a Nokia and the iPhone but what it's also doing is getting more people to think about a more integrated device where they can do their data and their voice on one device.
Is growth in data the answer to getting a return on investment for 3G?
3G return on our investment is not only about data — it's about voice and data.
Two things about 3G. It's a much better data carrier than 2G — both in the context of speed and the cost to carry — but it's also a very effective voice carrier as well, and a cost-effective voice carrier as well. So over time as we've seen…
