The Day My iPhone Died

My iPhone is doomed. Apple (Nasdaq: AAPL  ) CEO Steve Jobs just said so. "Sorry, no," Jobs apparently wrote to a customer asking about future support for 2G iPhones like mine.

Call it the end of an era. The original iPhone sold mightily upon release and helped produce billions in free cash flow for the Mac maker. Now, with the forthcoming release of the 4.0 version of Apple's iPhone operating system, the 2G appears retired from active service, never again to receive a major OS update. Its big brother, the 3G, will get a limited upgrade that doesn't include multitasking.

"I feel robbed by this latest OS upgrade," says my Foolish colleague Joe Magyer, one of our top analysts for Motley Fool Inside Value and Motley Fool Special Ops. "I think I'm just going to buy the next one that rolls out. Steve Jobs has me wrapped around his bejeweled pinky finger."

On Twitter, Mac enthusiast Joel Burdeaux expressed similar feelings. "It's pretty uncool that we early adopters of the iPhone, who have taken care of [and] still use our 2G/EDGE phones will be unsupported in June."

I agree in principle. I'd love to keep my 2G iPhone fresh with new software. But neither I nor anyone else can claim to be surprised by Apple's choosing to focus on new, improved hardware. History says this is exactly what we should expect from the Mac maker:

  • In 1994, Apple replaced 68k chips with PowerPC processors designed in concert with what is now Freescale Semiconductor and IBM (NYSE: IBM  ) .
  • In 2001, four years after acquiring Jobs' NeXT, Apple introduced OS X in an attempt to better compete with Windows.
  • In 2005, Apple once again switched chipsets -- this time from PowerPC to Intel's (Nasdaq: INTC  ) x86 design.

An A4 effort
Evidence of Apple's latest platform shift appeared a month ago, with the introduction of the iPad, a device whose brain wasn't outsourced from Intel but rather designed internally. It's a reasonable bet that the next iPhone and iPad will sport not just a new OS but also a new chip. Apple doesn't move slowly when it comes to migrating platforms. It never has.

If history holds, users may find the shift worthwhile. Among iPhone 4.0's new features will be multitasking, whereby applications meant to run in the background -- such as Sirius XM's (Nasdaq: SIRI  ) streamed programming -- will do so, even as users check mail, Twitter, or Facebook, or perform other more meaningful tasks. Palm (Nasdaq: PALM  ) received well-deserved kudos for building multitasking into its Pre smartphone when it was first introduced.

Where this feature gets really interesting is with Skype and other VoIP services. AT&T (NYSE: T  ) has already said it would allow Skype calls over its data network; iPhone 4.0 will make that process easier.

Other innovations include a unified inbox that seems designed to make Apple mail on the iPhone more like Gmail, and Folders, which will allow users to digitally stack categorically similar apps into folders and save screen space.

But wait, there's more!
But iPhone 4.0's most disruptive quality comes in the form of iAd, Apple's answer to Google's (Nasdaq: GOOG  ) AdMob.

The differences are striking. Whereas Google's efforts appear more closely aimed at carriers looking to get a slice of mobile pie, Apple is courting app developers and ad agencies. Like iTunes, they'll receive the majority of revenue their iAds generate with a cut going to Apple.

Call it the mobile equivalent of the infomercial, with Jobs acting the part of Ron Popeil.

Seriously. Jobs had his own "but wait, there's more!" moment during his iAd demo. "This is a new kind of mobile ad. Have you ever seen a mobile ad like this? Anything even close?" No, I haven't, and that's Jobs' point. Apple's going around rather than at Google in this first salvo of what's sure to be a prolonged mobile device war.

My 2G iPhone is just the first casualty.

Will you upgrade to iPhone 4.0? Why or why not? Discuss in the comments box below.

Apple is a Motley Fool Stock Advisor selection. Google is a Motley Fool Rule Breakers recommendation. Intel is a Motley Fool Inside Value pick. Motley Fool Options has recommended subscribers buy Intel call options. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the Rule Breakers stock-picking team. He had stock and options positions in Apple and stock positions in IBM and Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy has a 64-bit chip on its shoulder.


Read/Post Comments (26) | Recommend This Article (25)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 13, 2010, at 4:27 PM, neal157 wrote:

    You could always go back to a landline.

  • Report this Comment On April 13, 2010, at 4:40 PM, 13astion wrote:

    Correction: your "2G" iPhone died the day the "3G" iPhone was launched. It's been dead for almost 2 years. Time to let it rest in peace...

    C'mon, folks! The mobile device space -- especially wireless telecomm -- is NOT the same as the mature PC market! Handsets are replaced every 12 to 24 months.

    Remember how quickly PCs used to be obsolete in the rip-roarin' 90's?

    That's where mobile is now. You've got to get over it, or you'll experience the same regret and angst you did over shelling out a couple of thousand of dollars for a shiny new PC only to look with envy at the model with the bigger screen, twice the RAM, and included DVD writer that came out a month later.

  • Report this Comment On April 13, 2010, at 4:46 PM, 13astion wrote:

    The foolish comment system lost my comment -- it was pithy and wonderful. So sorry.

  • Report this Comment On April 13, 2010, at 4:51 PM, jhaw wrote:

    Don't feel bad. I had the original iPhone, but last September I bit the bullet and upgraded to the 3GS. Once you experience 3G, the faster processor, real GPS, etc., you will love it. And I'm sure the next generation of iPhone will be even better (but more expensive).

  • Report this Comment On April 13, 2010, at 5:21 PM, antibash wrote:

    This particular author is a GOOG's fanboy that do nothing but bash Apple. Look at all the articles that he wrote. The truth is 3 years old hardware can't support all newer features that require more memory and faster processor. Hell, latest Android's software doesn't even support 1 or 2 years old Android's phones. I'd like to hear what the author has to say about that.

  • Report this Comment On April 13, 2010, at 5:22 PM, disposableident wrote:

    Just remember, your iPhone will never be less capable than it was the day you bought it.

    The fact you were able to upgrade it every year from v1.0 to v3.0 for free is definitely a nice bonus -- most phones can't be upgraded at all.

    Many new Android phones ship with an older operating system (for example v1.5, or v1.6 even through they're already on v2.1 now) and can never be upgraded. You're totally at the whim of the phone manufacturer and your phone network.

  • Report this Comment On April 13, 2010, at 5:28 PM, BuyerAdvocate wrote:

    Now on the day my I-phone died

    I found myself on the continental divide

    Tell me where do I go from here

    Think I'll ride into Leadville and have a few beers

    I think of Steve Jobs or all my fav apps

    Can't believe the old phone's gone

  • Report this Comment On April 13, 2010, at 5:36 PM, fauxscot wrote:

    I hear there is a sale on the Pre.

  • Report this Comment On April 13, 2010, at 5:39 PM, TMFMileHigh wrote:

    Hello antibash,

    Thanks for writing.

    Here's my response:

    ... He had stock and options positions in Apple

    My vendetta against Apple knows no bounds. So toxic that I'm willing to destroy my own portfolio! (Grins.)

    Plus, I love the irony. You're hitting me in an article in which I link to the following two pieces:

    Well Done, Apple

    http://www.fool.com/investing/general/2007/07/02/well-done-a...

    Bargain Stocks for Black Friday: Apple

    http://www.fool.com/investing/general/2008/11/28/bargain-sto...

    This is why I don't read enough fiction. Real life is just too delicious.

    FWIW and Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On April 13, 2010, at 5:41 PM, DJc8080 wrote:

    Simple. It's Moore's law.

    Like the pull of gravity, a well-oiled tech company, like Apple, innovates itself into new products and businesses every 18 months. See http://adecon101.blogger.com

    As a consumer, we pay the price to enjoy the newest and latest.

  • Report this Comment On April 13, 2010, at 5:41 PM, DJc8080 wrote:

    Simple. It's Moore's law.

    Like the pull of gravity, a well-oiled tech company, like Apple, innovates itself into new products and businesses every 18 months. See http://adecon101.blogger.com

    As a consumer, we pay the price to enjoy the newest and latest.

  • Report this Comment On April 13, 2010, at 5:42 PM, DJc8080 wrote:

    Simple. It's Moore's law.

    Like the pull of gravity, a well-oiled tech company, like Apple, innovates itself into new products and businesses every 18 months. See http://adecon101.blogspot.com

    As a consumer, we pay the price to enjoy the newest and latest.

  • Report this Comment On April 13, 2010, at 5:43 PM, DJc8080 wrote:

    Simple. It's Moore's law.

    Like the pull of gravity, a well-oiled tech company, like Apple, innovates itself into new products and businesses every 18 months. See http://adecon101.blogspot.com

    As a consumer, we pay the price to enjoy the newest and latest.

  • Report this Comment On April 13, 2010, at 5:56 PM, SKRMBA wrote:

    Then, don't upgrade...moron!

    Does your clunky old PC, or even your PowerPC Mac still work?

    Foolish fool's column filler for the sake of posting bydeadline.

    Oy!

  • Report this Comment On April 13, 2010, at 5:56 PM, SKRMBA wrote:

    Then, don't upgrade...moron!

    Does your clunky old PC, or even your PowerPC Mac still work?

    Foolish fool's column filler for the sake of posting bydeadline.

    Oy!

  • Report this Comment On April 13, 2010, at 5:58 PM, pizzabox wrote:

    Get over it, the 3GS will become obsolete too in the next 36 months. I wonder how much more Apple can add to the iPhone? Yeah I need a 5MP camera on my phone too and video conferencing too. I think the focus will be more on the iPad as a primary device. I could use my bluetooth to connect to the iPad, so why do I need an iPhone. I think iPad 3.0 will change mobile computing. Apple has mastered the UX to match a UI that attracts all industries!

  • Report this Comment On April 13, 2010, at 6:08 PM, TMFMileHigh wrote:

    Hello SKRMBA,

    Thanks for writing. Hope next time you'll comment on the investing implications we're talking about here.

    Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On April 14, 2010, at 12:40 AM, demodave wrote:

    Dear Tim,

    Don't cry for your poor, dead iPhone walking.

    Just remember, as soon as it passes beyond this mortal coil, a brand new $499 investment in Apple's future will spring up in it's place.

    As an Apple investor and fanboi, I can tell you that my excitement knows no bounds - other than a 24 month refresh cycle. I had to wait for my iPhone 3G, simply because those mean people at AT&T would not let me upgrade for free when I wanted to. But this time, I am ready for the refresh cycles.

    The iPhone (whatever generation matters to you) is dead. Long live the iPhone!

  • Report this Comment On April 14, 2010, at 12:40 AM, demodave wrote:

    Dear Tim,

    Don't cry for your poor, dead iPhone walking.

    Just remember, as soon as it passes beyond this mortal coil, a brand new $499 investment in Apple's future will spring up in it's place.

    As an Apple investor and fanboi, I can tell you that my excitement knows no bounds - other than a 24 month refresh cycle. I had to wait for my iPhone 3G, simply because those mean people at AT&T would not let me upgrade for free when I wanted to. But this time, I am ready for the refresh cycles.

    The iPhone (whatever generation matters to you) is dead. Long live the iPhone!

  • Report this Comment On April 14, 2010, at 2:07 PM, Drakon1976 wrote:

    THE SHORTS ARE ABOUT TO GET CRUSHED ON SIRIUS!!!!!!!!!!!!!

  • Report this Comment On April 14, 2010, at 2:07 PM, Drakon1976 wrote:

    THE SHORTS ARE ABOUT TO GET CRUSHED ON SIRIUS!!!!!!!!!!!!!

  • Report this Comment On April 16, 2010, at 11:29 AM, IrishHammo wrote:

    Sorry but I could never support Apple.

    If there's one thing I HATE, it's being told what to do, and that is exactly how Apple operates. I want my phone to work how I want, not how Apple tells me they ALLOW it to work.

    I think there's about to be a big stink, a cartoonist was rejected last year from the App store as Apple deemed him 'offensive'. He's now just won the Pulitzer Prize. His cartoons? Political satire. I believe that's infringing on freedom of the press.

    (http://www.theregister.co.uk/2010/04/15/mark_fiore_rejected_...

    Disclaimer - I'm a techie who likes linux and I look forward to buying an Android phone. It's now grown up, I'm awaiting my handest on my carrier.

    This is one of the reasons I don't own any Apple stock, I don't understand the people who like Apple products and I constantly believe they are about to crash and burn. If I don't understand it, I don't buy it.

    BTW Mr Tim Beyers, Apple did not design anything inside the iPad, they chose off-the-shelf hardware and put it together in factories in China same as they always do. See the iPad teardown on ifixit.com for more information.

    (http://www.ifixit.com/Teardown/iPad-Teardown/2183/1)

  • Report this Comment On April 18, 2010, at 12:50 PM, winjimusa wrote:

    all I can say is I'm happy I waited for the 4th gen.

    I wonder what the monthly bill will be however....Yikes!

  • Report this Comment On April 18, 2010, at 2:27 PM, bassman451 wrote:

    As already noted by others this guy must be a buffoon. I don't see how he can get articles printed. The technology on any tech item you buy is getting old when you walk out the store. Of course his five year old phone doesn't have the capability for new hardware. Duh! Neither do my old computers.

  • Report this Comment On April 18, 2010, at 5:51 PM, PSU69 wrote:

    My third Porsche is so much better than the second However, I remain with the one and only wife! Disclosure, I own AAPL & GOOG, yet use a BB due to 3G iPhone not ready when I had biz in Europe. I plan to jump to iPhone when Verizon is ready. ATT sucks in so many parts of my orbits. Had ATT service in the recent past. Not going back. My BB service plan is amazingly cheap. Shhh! Don't let them know I think it is a bargain. I also Skype via BB. Keep it real and really, try being brand agnostic.

  • Report this Comment On April 19, 2010, at 12:26 PM, TMFMileHigh wrote:

    Hello

    Thanks for writing.

    >>The technology on any tech item you buy is getting old when you walk out the store. Of course his five year old phone doesn't have the capability for new hardware. Duh! Neither do my old computers.

    That's nice, perhaps you'd like to comment on the investing implications highlighted in the story rather than ignoring them? They are:

    1. What happens when (not if) Apple standardizes on the AX chipset for all mobile devices.

    2. What it might mean for profits and revenue when the mobile device war between Apple and Google goes from warm to smoking hot.

    @IrishHammo: Yes, the iPad was manufactured in Asia, as are all Apple products. Manufacturing and design aren't the same thing and Apple designed the A4 internally using the team it acquired from PA Semi.

    Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1152019, ~/Articles/ArticleHandler.aspx, 9/16/2014 11:58:35 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement