The $29 Mistake That Can Destroy Apple

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"Thunderbolts and lightning
Very very frightening me."
-- Queen, "Bohemian Rhapsody"

Everyone's been cheering Apple (Nasdaq: AAPL  ) higher since Wednesday's iPhone 5 unveiling. The differences between the iPhone 5 have been well received. The larger screen. The faster A6 chip. The ability to take better snapshots in low-light conditions.

However, there isn't necessarily a lot of thunderous applause when it comes to Lightning.

I see a little silhouette of a plan
Apple's decision to change the iPhone's connector -- going from the 30-pin accessory that dates back to the iconic smartphone's introduction in 2007 (and even earlier with the iPod) to the new Lightning standard -- is bold.

Future generations of the iPhone, iPod touch, and iPad will adhere to the new connector. In a few years, consumers won't even remember where all of their 30-pin plugs went. However, there's the pesky migration period that will take place between now and then. Apple has a solution, but it comes at a price. Apple is selling a $29 adapter that will allow iPhone 5 and the new iPod Touch media players to work with the countless other docks already on the market.

Let's just call it a tax on Apple users as they bankroll the tech giant's latest innovation.

On Thursday, The Wall Street Journal ran a piece on how hotels that have invested in iPhone and iPod docks in their rooms will react. They can't invest in new docking stations because they're too expensive, and it will be years before there are more post-iPhone 5 owners than pre-iPhone 5 owners of iOS devices. Apple bragged on Wednesday that it has sold 400 million iOS devices through the end of June, and that's your 30-pin-connector audience right there.

Buying the adapters is a cheaper solution, but the hospitality industry's rightful concern is that folks will swipe the small adapters. Further, what will the wear and tear of the adapters do to the docks, as guests hook and unhook their different devices?

Accessory makers react
A new iPhone form factor is sweet news to some third-party accessory makers. ZAGG (Nasdaq: ZAGG  ) , for one, is now promoting invisibleSHIELD Extreme, its flagship product, for the iPhone 5. The thin film protects the handset from scratches, shock, and breakage. Companies making cases will be giddily busy, as iPhone 4S owners can't simply slip their old cases on to the larger iPhone 5 phones.

But it's not all that fantastic for other companies that have been feasting on the iPhone's success. Logitech (Nasdaq: LOGI  ) is responding to Lightning by trying to make its music appliances wireless. It was bad enough when accessory makers had to fret over the differences between iOS and the more common micro-USB connections. Now that even different iPhone generations will require different ports, Logitech doesn't have much of a choice but to do something.

Moving on
Early adopters won't care. Initial iPhone 5 pre-orders sold out faster than earlier Apple smartphone incarnations have, and there's no reason to believe Apple won't sell a ton of these iPhone 5 devices.

However, shifting to a new connector may get in the way of how quickly mainstream consumers hop on the iPhone 5 bandwagon after Friday's initial rush subsides. If it becomes the burden of iPhone 5 owners to lug around an adapter when they travel or whether they've just amassed too many 30-pin connectors over the years to abandon the platform, this could be trouble for Apple.

What if folks don't buy the iPhone 5 when they want one? What if they wait until they actually need one? Now that would be something.

Apple jacks
A new premium report on Apple details the opportunities and challenges in store for its shareholders. It's also been updated to include new iPhone 5 details! Check it out now.

The Motley Fool owns shares of Logitech International and Apple. Motley Fool newsletter services have recommended buying shares of Apple and Logitech International and creating a bull call spread position in Apple. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He owns no shares in any of the stocks in this story and is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Motley Fool has a disclosure policy.

Read/Post Comments (18) | Recommend This Article (11)

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 September 16, 2012, at 10:44 PM, matthewluke wrote:

    Just as a user of Apple's products (and other companies' products), I wish Apple join the majority of the industry in using standardized connector. There are apparently good reasons for Apple's use of their proprietary cable over something like micro-USB (as in their cable can do things micro-USB can't). So I can certainly understand that. But still...

  • Report this Comment On September 16, 2012, at 11:32 PM, mattysmitty wrote:

    How much faster is the new standard? Sometimes stuff needs an upgrade, and the old port was 5 years old

  • Report this Comment On September 17, 2012, at 12:54 AM, gslusher wrote:

    This seems to be by someone who doesn't understand the iPhone accessory industry. Just how long do you think it will take Griffin Technology and others to come up with less expensive adapters, including for docks? (By the way, many of those docks do not fit all iOS devices.)

    Do you complain that you have to have a mini-usb cable and a micro-usb cable for various devices? When micro-usb first came out, the cables were expensive. Ditto for HDMI and mini-HDMI. I remember paying over $25 for the least expensive HDMI cable. Now, they're very cheap.

  • Report this Comment On September 17, 2012, at 1:05 AM, rjonesthree wrote:

    A connector? "Destroy" Apple? Really?

    What an idiotic headline.

    Seriously, the criticisms of iPhone 5 are of two sorts:

    1) It's just an incremental upgrade! Apple is dead because they haven't completely reinvented the phone again.

    2) The connector is different! Apple is dead because they changed something.

    Y'all can grow up now.

  • Report this Comment On September 17, 2012, at 1:08 AM, aeosfool wrote:

    The new cable was needed because the new devices are much smaller and every millimeter was needed to be used for other things.

    I saw today that the Apple connector was $20 on one web site( I think). When other third parties start making them, they'll be under $5 real soon. I think most hotels will have them available for check-out but most people will have them with them when they travel...they are so small it will be easy to travel with them just like all the other adapters we have to carry when we travel.

  • Report this Comment On September 17, 2012, at 1:15 AM, bbrriilliiaanntt wrote:

    Just sold all my aapl!!! Phew! That was close, Thank You!!!!! <;)

  • Report this Comment On September 17, 2012, at 1:25 AM, 0gre wrote:

    Apple's kept the 30 pin adaptor for 9 years going which is a long run. There aren't many other companies that can say you can use the same adaptors for 9 years worth of products across an entire product line.

    MicroUSB isn't specced to handle video output so vendors who use it for that make their own adaptors. In spite of it being a 'standard', you can't use a MicroUSB to HDMI cable from Samsung to show video from an HTC phone or vice versa. For adaptors aren't even standard within brands. If you want to send video out from a Samsung SIII, you can't use the adaptor you bought for the S II ( ).

    That's the good news for Apple users, the lightning adaptor is going to be universal for all Apple products, likely for at least 4-5 years or more. The pain Apple users are going through, many Android users go through with every generation.

  • Report this Comment On September 17, 2012, at 1:26 AM, 13astion wrote:

    Click troll.

    They said the same thing when Apple removed the floppy from iMacs and said you'd need to buy a separate external drive (more then $29, I think) if you needed it.

    They said the same thing when Apple removed the optical drive from MacBook Airs (and then the MacBook Pro - Retina) and said you'd need to buy an external one, if needed, or use this nifty thing called Remote Disk from one of your other Macs.

    You know, iPods didn't always use the 30-pin connector, either. They were first Firewire. And accessories were made for that port, as well as the specialized audio port that included play control signals. Poof. All gone. And even the 30-pin connector has changed over the years. There was a "big upheaval" when Apple changed how the audio and video signals where handled through it to connected accessories. How much did those changes "destroy" Apple? Zero. Just as it will be with this change.

    And I for one welcome it. The 30-pin connection was actually quite fragile. And it is uni-directional. The new Lightning connector isn't just going to be faster, but more solid and bi-directional.

    Simplicity and stability -- that's Apple in a nutshell, anyway. The connector is just catching up...

    (Btw, someone mentioned that the 30-pin connector is 5 years old...ahh, no. That's just with the iPhone. It first came out for the iPod in 2003. IT'S 10-YEAR OLD TECH AND SOMEBODY IS GOING TO COMPLAIN THAT APPLE IS REPLACING IT!??!!??!?)

  • Report this Comment On September 17, 2012, at 1:33 AM, Zendwell wrote:

    Youre so SCSI, bro.

  • Report this Comment On September 17, 2012, at 1:34 AM, zapado wrote:

    Improving a connector will "destroy apple"? That's just silly.

    In our family we have FIVE iOS devices that use 30-pin connectors, and a nice Bose system that will be incompatible with the new connector. According to this article, I should be really upset. But actually I'm really excited about the new connector!

    Why? Because MicroUSB cables must be oriented correctly, and must be inserted in perfect alignment. I really hate them, and I'm glad Apple's not adopting that standard. A cable that's reversible is easier to use, and I bet those rounded corners I see on the Lightening connector will make inserting the cable a lot easier than a micro usb. This idea is just one more of the many small things that makes the experience even better.

    And hey, you can get a 30-pin cable from Apple for $20, or a cheaper made version online for as little as $2. I bet those who want to spend less than Apple's price on adapters will have the opportunity to do so.

  • Report this Comment On September 17, 2012, at 2:53 AM, fatmonk wrote:

    Time to buy MSFT, Windows still use Serial port. save big buck :)

  • Report this Comment On September 17, 2012, at 7:41 AM, jdmeck wrote:

    What if people just brought their new cord with them? Duh!!!!!!!!!!!!!!!

  • Report this Comment On September 17, 2012, at 9:57 AM, constructive wrote:

    "it will be years before there are more post-iPhone 5 owners than pre-iPhone 5 owners of iOS devices."

    More specifically, two years.

  • Report this Comment On September 17, 2012, at 10:36 AM, CluckChicken wrote:

    "There are apparently good reasons for Apple's use of their proprietary cable over something like micro-USB (as in their cable can do things micro-USB can't). "

    Yes the new cable can get you to spend more money on a cable. There is nothing this cable can do that a micro-usb cannot.

    "Apple's kept the 30 pin adaptor for 9 years going which is a long run. There aren't many other companies that can say you can use the same adaptors for 9 years worth of products across an entire product line."

    Yeah all those companies that have been using USB for the last decade plus have nothing on the 9 years of Apple's 30-pin.

    "Windows still use Serial port."

    True the OS still has drivers for it, but good luck finding a pc with a serial port. This chatting about Apple obsoleting one of their ports will surely get less talk then if MSFT would stop supporting serial ports next week, even though nothing has been using them for at least 7 years.

    The only reason Apple went to this new pin set is because they knew they could suck more money out of their users then if they went with a micro-usb. The question will be how hard will the EU hit them or will they continue to just act tough agaist companies not named Apple while Apple does the same things they fine others for.

  • Report this Comment On September 17, 2012, at 10:54 AM, lucasmonger wrote:

    How many PC docking stations still sport parallel and serial ports in this day of USB2/3 and Thunderbolt?

    Certainly if Apple included a free adapter with every iPhone5, the media would probably jump on the other side of the bandwagon and talk about all the e-waste of extra unused parts.

    The title is of the article is completely wrong. Apple will not get destroyed. They're doing their own destroying (RIP Microkia Lumia, even before you were released - 10mm vs 7, 180g vs 112g)

  • Report this Comment On September 20, 2012, at 10:46 AM, MarkCBrooks wrote:

    Kkkrist, whats all the fuss about. This is progress folks. Apple has to deliver smaller, lighter and leaner devices. The old adaptor was huge and completely outsized.

  • Report this Comment On September 21, 2012, at 1:02 AM, Fruitfan wrote:

    OMG!! Apple is going to go out of business. I mean they changed the connector and people are going to pay 29 bucks for the adapter? Does Apple really think that someone who pays hundreds of dollars for the phone and then spends on average another 100+ dollars on iPhone accessories is really going to pay 29.00 for the adapter?

    People are so stupid...Projections have Apple selling around 50 million iPhones by year end yet we are talking about an adapter?? Really? More like we should be discussing when Apple will break 1000 per share

  • Report this Comment On October 17, 2012, at 7:05 PM, rcabes wrote:

    I have to agree, the headline is bogus. I have 3 IPhones, including my new IPhone 5. I spent $399 buying the 64GB model. Do you seriously think I would hesitate to buy the $29.95 adapter? All Apple customers are familiar with that price, it is the standard Apple price for its peripherals. Not to worry, Belkin and Griffin will shortly have your $12.95 version. I have about 8 30 pin cables, accumulated over several years, all still usable with my IPad and my wife's Iphone 4S. Chlll, brother, and don't sell your stock.

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