Jun 16, 2008 12:00 AM,

The iPhone Economy 2.0

By Rich Karpinski

The new version of the iPhone rolled out by Apple last week represents more than just a new phone. It foretells a new economy of service, application and network providers likely to grow up around this mobile platform.

APPLICATIONS

SERVICES

Perhaps most interesting is MobileMe, Apple's “cloud-based” service that helps iPhone users synchronize multiple devices, as well as store content and access applications, via the network. MobileMe costs $99 per year, representing a potentially healthy revenue source for Apple. It's intriguing to note that those revenues will indeed flow to Apple and not to its service provider partners that might have been the more natural fit to offer such network-based services.

NETWORKS

Of course, the big draw for iPhone 2.0 is 3G. AT&T in the U.S. will see a boost in data service fees from $20 to $30, partially offset by likely carrier subsidies to get the entry iPhone down to $199. What happened to the mobile future of open devices and open networks? Apparently cheap, subsidized phones still hold a lot of appeal for mainstream consumers. Further, the subsidy means AT&T won't share monthly revenues with Apple, making the iPhone the same as any other phone from AT&T's perspective.

LOCATION

Still to be seen is the impact of the iPhone's location-based technology that combines a GPS chip and Wi-Fi and cell-tower location data. Google Maps is the main on-phone interface to take advantage of these location-based capabilities, but other services such as the Loopt mobile social network demonstrate how location can play in a variety of applications. How quickly will location-aware applications come into play, and who will be the big winner here?