There has been a lot of press and commentary on Apple’s iPhone. Deservedly so. From what has been presented thus far the iPhone is a sleek piece of hardware and software engineering as only Apple can produce it. Whether the iPhone is revolutionary, expected or somewhere in between, the discussion has focused primarily on the device’s features and interface. Much less has been said about the implications of Apple’s iPhone business strategy. Since the iPhone was announced on January 9, my thoughts have turned to the decisions that Apple has had to make in order to enter the wireless market and what may come in the wake of the iPhone’s June 2007 launch.

Why iPhone?
Apple’s decision to get into the wireless device business is not surprising. Since the launch of the iPod 5 years ago, Steve Jobs has touted the connected experience where all Apple devices and services work and play seamlessly with one another in one glorious digital ecosystem. Since the mobile phone has become the one device that no one is ever without, despite the fact that nothing about the wireless experience is very good, it was only a matter of time before Apple got into the game. “Everybody hates their phone,” Time magazine quotes Jobs as saying, “and that’s not a good thing. And there’s an opportunity there.”

Uncharted Territory
Having decided to get in the game, Apple’s most significant decision is to be a manufacturer only rather than a manufacturer + MVNO. This is curious since Apple’s brand is largely based on its control of the end-to-end consumer experience. The MVNO route would have allowed Apple to maintain the most control over the end-to-end iPhone experience, clearly important after the ROKR fiasco. However, it would also have taken Apple into uncharted territory as a wireless operator. With iPhone v.1 Steve Jobs has decided to take the path with the fewest risks and stick with what he knows Apple does best.

Strange Bedfellows
Making the choice to be the iPhone’s manufacturer rather than an MVNO necessitated a greater reliance on a national U.S. wireless operator. The big tradeoff is that the iPhone experience will be greatly impacted by the operator’s call quality, customer care, and billing - typically wireless subscribers’ biggest gripes about any operator. Apple may be relying on the iPhone’s target base to be sophisticated enough to distinguish between Apple’s product and the operator’