iPhone Nano, GPS Are More Important to Apple Than 3G: Analysis

3G? Video? That's old news. Rival companies tell PM's senior tech editor they're shaking in their boots over the prospect of Steve Jobs enabling iPhone 2.0 with GPS, and a stripped-down cellphone might even outsell the original. A modest proposal for June's WWDC keynote.

It's that time of year again, when rampant speculation from fanboys, "inside sources" and journalists alike (over)anticipates another Apple product launch. On June 9, as everybody who follows this stuff knows, Steve Jobs is set to unveil the 3G update to the iPhone. (We'll be live on-hand with all the details.)

Now there are plenty of theories about how AT&T's HSDPA network will effect the iPhone 2.0: Will the high-speed connection make the cellphone bulkier? What about battery life? Those aren't the only questions, of course. Bloggers have been obsessing over every potential tweak: Will the camera be updated? Will there be streaming video? Will a Wi-Fi antenna still be necessary? Will the Bluetooth spec finally be updated to allow for data streaming and wireless stereo headphones?

All these elements would be important—if incremental—improvements in the iPhone's functionality. But Jobs could make two announcements on June 9 that would have far bigger implications for the future success of the iPhone than even fast Internet may provide.

The first would be the addition of a GPS antenna. I recently sat down with the president of a GPS navigation system manufacturer to ask him how he felt about the prospect of a GPS-enabled iPhone. "Scared [expletive]-less," he said. Hardly a rarity in the handset world, GPS functionality is already used by many carriers to sell location-based services and for Emergency 911 (or E911). And the iPhone already does rough location positioning by cross-referencing tower triangulation with a database of known Wi-Fi hot spots.

Yet the iPhone has the potential to leverage true GPS functionality better than any other device. It already has a large, 3.5-in touchscreen interface, external speakers and an elegant Google Maps interface. All you'd need to add to a GPS-enabled iPhone is a suction-cup windshield bracket (sold separately, of course), and you'd have a fully-functional, pocket-portable car navigation device. People already pay hundreds of dollars in droves for this increasingly popular segment of devices, and the iPhone could essentially challenge an entire product category with one add-on feature.

The second huge announcement that Jobs could make would be that's he's introducing not one new iPhone—but two. He's stated that his goal is to sell 10 million iPhones in 2008, and a new 3G iPhone with better e-mail support for corporate networks could certainly help toward that goal (even old iPhones are supposed to get an upgrade to work with Microsoft's ActiveSync in June).

But I can't help wondering how long Apple will continue with a single-phone strategy. After all, what turned the iPod from a revolutionary product for a limited market into a true juggernaut was the addition of Minis and Nanos and Shuffles—in other words, a complete product line. The iPhone is a force to be reckoned with in the smartphone category, but a smaller, cheaper iPhone Nano with a couple of gigabytes of storage and basic music functionality has the potential for truly explosive sales. It may not happen next month, but its time will come.

Source: popularmechanics