iPhone Version 2 and Apple Tablet

CNet UK is reporting that the much rumored Apple Tablet is a real product and Apple is working with Asus to manufacture it.  Not too surprising as many people have been predicting/hoping that Apple would develop such a product.  However, if the Apple Tablet (iTablet) is real, how does that affect the iPhone?

There has been an assumption that Apple will release an updated version of iPhone next year.  Many assume that the iPhone 2 will include a significant bump in the iPhone's hardware specs with the addition of 3G network support, perhaps a video camera and/or internal GPS Unit.  However, if you look at the history of Apple's product upgrades since Steve Jobs returned to the company and factor in the short history of the iPhone itself, expecting this kind of iPhone update anytime soon is not realistic.

Apple's typical product refresh cycle has run about 10-18 months depending on the specific product and what else Apple has been working on (for example, in hindsight, we can see that there was a longer delay in hardware while OS X was being worked on and a similar delay in iPod refresh while the iPhone and iPod Touch were being developed). Macrumors.com  has a handy page that tracks these things.  So, right off the bat, I think we can be fairly confident that Macworld January 2008 (MWSF) will not be bringing us a totally revamped iPhone 2.  After all, it will have been only six months since the U.S. launch of iPhone and not even 3 since the UK, France, and German launches.  

Moreover, I think Apple will want to give the current version of the iPhone some time to develop - figuratively and literally, with the  announced introduction of the iPhone SDK due in February. 

Additionally, given the backlash Apple got for its significant price cuts on the iPhone, I doubt that it wants to go down that path again anytime soon.  Can you imagine what kind of reaction Apple would get from current iPhone owners if it introduces a significantly enhanced iPhone at MWSF?

So, I suspect that we will not see a major hardware refresh on the iPhone.  Thats not to say Apple would not up the memory on the iPhone (say for example adding a 16 GB iPhone to the iPhone product line).  Plus, Apple probably will introduce new iPhone Applications at MWSF. 

Remember that in addition to being a hardware device, the iPhone is a platform.  Apple is already spreading the profits from that platform out over the 2 year life of each iPhone's AT&T contract.  It has a vested interest in keeping that platform fresh.  So, upgrading the hardware anytime soon, as I see it, detracts from this philosophy.  The easy way to keep the platform fresh is via software updates and not new hardware. 

For these reasons, the logical time for the next major iPhone refresh is next fall. Such a major iPhone refresh not only would allow Apple to have a new product for the holiday season, but it also to get current iPhone owners to re-up their contracts with AT&T (and thus extend these contracts from their intial two years to three.  This could be done as a trade-in program).

If indeed MWSF 2008 is too soon for an iPhone refresh,  then the  release of the iTablet at MWSF, based on the iPhone touch technology and the Apple "noun" interface  makes sense.  Such a product is a logical extension of the iPhone/iPod Touch product line and a nice merge of the iMac/iPhone products.  Although tablet computers have not sold too well in the past, an Apple "iTablet" based on the iPhone and OS X technology stacks will probably sell like hot cakes.  So save those pennies for January...