Silicon Insider: iPhone Craze: the End of an Era?

June 14, 2007 — -- Here we go: the great closing act on perhaps the most remarkable boom in high-tech history.

As anybody who is not in a coma undoubtedly knows, Apple will formally begin selling its much anticipated new iPhone June 29.

The phones will be sold both at Apple Stores (but don't count on finding one there for a while -- they apparently aren't taking preorders) and at AT&T stores (but supposedly only at company-owned stores and not franchises or resellers -- if you can tell them apart).

Apparently, even at this late date, most of the stores that will be carrying the iPhone on opening day don't even know yet how many units they will receive, or whether they are allowed to open at midnight on the 29th.

All of this suggests that on the penultimate day of this month we will have one of those classic high-tech buyer frenzies -- people camping out in parking lots, bursting through newly unlocked store doors, triumphantly showing off their new purchases to news crews -- the likes of which we haven't seen in a decade. It should be great fun.

But there will be one crucial difference this time. Usually these mass hysteria events (think of Windows 95) kick off a new boom in high tech. But my sense is that, this time, the introduction of the Apple iPhone will instead bring down the curtain on the latest up-cycle.

That's more a matter of timing than anything else. The iPhone, as I noted a couple weeks ago, is the most visible manifestation of a burst of acquisitions, entries into new markets and Hail Mary products that have characterized the biggest players in tech over the last few months.

The stock market is up, companies are flush with cash, and they are starting to peak out in their existing business. For those reasons, they are making bold moves to position themselves for the next downward phase of the classic four-year high-tech business cycle.

For Apple, a successful iPhone launch will bolster the company's revenues through the likely industry downturn this fall and nicely position it for the impending "Third Screen" revolution. It will also goose the sales of iTunes by creating yet another platform for users. That's a win-win for Steve Jobs.

Before we get into the nature of that next boom, here are a few preliminary and random comments on the iPhone and the madness that is already starting to form around it:

Though the parallels between past Apple product introductions and the present one seem obvious, to my mind the differences are much more important.

For example, the Macintosh came along at a time when the PC world was already finding itself locked into the PC paradigm. The iMac was introduced into a maturing industry that had lost any interest in product design or innovation. And the iPod literally created its own market.

Thus, in each case Apple inserted a wildly innovative product into a market that either had grown tired, or didn't even exist.