Will the Apple iPhone Be a Success

But is it really that straight-forward?

Will the Apple iPhone Be a Success?

The Apple iPhone has got a lot of fantastic features going for it. In addition to its gorgeous design and OS X-based intuitive interface, here are a few of its highlights:

• Widescreen iPod Video
• Portable Internet device with built-in WiFi (but no 3G)
• Multi-touch technology
• 2.0 megapixel camera
• Accelerometer, proximity sensor, and ambient light sensor
• No physical keypad; touchscreen interface only

Is that enough to get you to buy one? After all, it's got all the functionality of an iPod (including music and video) as well as that of a cell phone (with Bluetooth too).

Pricing Concerns

For one thing, the Apple iPhone will not be cheap. It will be offered in two capacities: the 4GB version will cost $499, whereas the 8GB version will retail for $599. Also bear in mind that these prices already include the rebate/subsidy associated with signing a new two-year service agreement, effectively locking down to a cell phone voice (and data) plan for at least 24 months. By comparison, the 4GB and 8GB iPod nano music players sell for $199 and $249, respectively. That said, the nano does not play video files, nor does it make phone calls. But hey, there's no contract involved.

What the high initial price means, however, is that if your Apple iPhone happens to get damaged during those first two years (and said damage is not covered by the warranty), you will want to replace it. The replacement cost will be higher than $499 (or $599), just as when you buy any other cell phone. For example, phones that are "free with contract" typically cost $150 or more without a new contract. We're not even sure if they would be willing to sell you an iPhone outright without signing an agreement with Cingular.

Also bear in mind that to make full use of the Apple iPhone's functionality, you will want to subscribe to a data plan that will allow you to enjoy high-speed internet and wireless email while on the go. The iPhone does come equipped with WiFi, meaning that you can hop on the net at a "hotspot", but you otherwise have to rely on "EDGE" for your data, which is not only slower but substantially more expensive. As an average consumer, would you be willing to pay a monthly bill in excess of $100? That's how much many BlackBerry users pay (or rather, their employers).

Will Cingular/AT&T Exclusivity Be a Problem?

Unlike the Apple iPod, which can be purchased from any number of retailers and can be used just about anywhere, the iPhone will be exclusively available from Cingular Wireless (which is slowly undergoing a transition to becoming AT&T). That means that if you are locked down to a contract with any other provider -- T-Mobile, Verizon Wireless, Sprint-Nextel, and so on -- you will not be able to get an iPhone, at least not directly. It hasn't been confirmed by Apple, but Rogers Wireless has indicated that they will be exclusively carrying the Apple iPhone in Canada, presenting Canucks with the same kind of conundrum. European and Asian providers have not yet been announced.

So, the question that arises from this exclusivity is whether it will affect the iPhone's market penetration. After all, anyone can buy an iPod, but not anyone can (immediately) buy an iPhone. Steve Jobs, CEO of Apple, said in his keynote speech that he hopes to get 1% of the mobile phone market in 2007. They could probably sell more iPhones if it were readily available through many service providers (like the Motorola RAZR, for example). For this to happen, they would also have to produce a CDMA version in addition to the existing GSM one.

iPhone Will Succeed Because of Apple

Everything that Apple touches these days turns to gold, whether it be the latest iPod or an absolutely alluring MacBook laptop computer. I don't see why the iPhone will be any exception. It's got a lot of nifty toys that any cell phone enthusiast will enjoy, providing plenty of multimedia for people who like music and videos, while doing enough of the business-orientation applications (like mobile email and web browsing) to perhaps take some market share away from Palm, RIM (BlackBerry), and other PDA phonemakers.