Optical/IP Networks

iPhone Sticker Shock 'n' Awe

The early reviews are in on the Apple Inc. (Nasdaq: AAPL) iPhone, as the blogosphere goes blotto over the sleek new iPod/smartphone combo device from the elves who brought you the mouse and the Mac.

We've rounded up some of the more cogent, and crazier, comments from around the Web and from our inbox. Unstrung's comments follow:

    The decision to design the iPhone with a smartphone orientation was a very wise, yet unexpected move that puts Apple squarely against Microsoft and the Nokia N-series. Whereas the expected profusion of music-centric devices would dilute the value of an iPod-like phone, the demand for smartphones is steadily growing, and now Mac enthusiasts can finally get their hands on the seminal Apple mobile device.
    — Jaimee Minney, M:Metrics

Yes, but see comments on the email and typing functionality of the iPhone below. Are loyal BlackBerry and Treo users going to give up their beloved smartphones just to get access to iTunes?

    I think something important about this phone is that it will finally make it natural to hook your phone up to your computer. Browsing the Web with this phone - the real Web, not a WAP interface - is actually starting to look like a possibility.

    Apple can rely on their iPod established interface to communicate with the phone. People are used to iTunes, so they will be able to move information in a familiar way with this new phone.

    I'm not saying this thing is revolutionary, but I think it offers the possibility to bring the mobile web closer to reality -- and I mean make the Internet mobile, rather than making a mobile Internet.

    — Bill Burns, Website engineer, Light Reading Inc.

Good point. The iPod changed the way the people relate to their music collections. So will the iPhone change the way they relate to the Internet?

    By partnering with Apple, we are continuing our commitment to raising the bar for customers. We think the iPhone is one of the most innovative devices ever created, and we look forward to letting our customers be the first in the world to experience the future of mobile phones.

    — Stan Sigman, president and CEO, Cingular Wireless

You go, Stan! Cingular apparently co-developed one of the iPhone's most compelling features, "visual voicemail," which ends the need to wade through your Aunt Harriet's long-winded message to get to the juicy stuff. But Apple is going after the extreme high end of the cell-phone market, and Cingular apparently will not be offering discounts off the $499-$599 pricing. How much of a boost this will give Cingular over its rivals, however, remains to be seen.

    Given Apple's numerous requests for permission to use Cisco's iPhone trademark over the past several years and our extensive discussions with them recently, it is our belief that with their announcement today, Apple intends to agree to the final document and public statement that were distributed to them last night and that addressed a few remaining items. We expect to receive a signed agreement today.
    Cisco Systems Inc. (Nasdaq: CSCO), "official comments" on the use of the "iPhone" name, which Cisco trademarked way back in 2000

We think this means that a licensing agreement has been reached between the two companies -- but you gotta love the stern parental tone of the "Given Apple's numerous requests for permission..." line. So when you think "iPhone," do you naturally think about Linksys?

    "I'm already looking at my Q like its an Edsel."
    — Larry Dignan, ZDNet

Yeah, but are you willing to pay more than three times as much to upgrade to a Studebaker -- which isn't even available yet?

    The bottom line is, if you can't build a phone first, and add features on top of that, don't bother. Users will be disappointed.
    — Jack Gold, principal, J. Gold Associates

On the other hand, many commentators can't help but gush:

    This thing will go through the roof, exactly according to Apple’s master plan.
    — David Pogue, The New York Times

Umm, OK... If the Times says so, it must be true, right? Well not necessarily:

    It's slim, it's sexy but will it sell the 10m targeted? ... One device with one carrier for only half of 2007 will make the big volumes very tough to achieve. Given the timing, geographies and the fact there is only one device, we think that 2m devices could be sold in 2007 in the best instance. If very successful, a further 5m could be sold in 2008, but we believe that the device is too expensive to achieve anything like the success that the RAZR has had.
    — Richard Windsor, global communications equipment analyst, Nomura Securities

Finally, back in the land of market reality, as opposed to tech wonderment. Windsor also points out that "touch screens have proved to be less effective for text and data entry casting some doubt on the effectiveness of the device as a phone or email device." Yes, the iPhone is about as cool a gadget as you'd expect from Jobs & Co. Will it sell 10 million in the first 18 months? Just like Windsor, we're not convinced.

    Clearly the iPhone is a revolutionary product, but so was Apple's Cube -- which was a failure but led to the iMac and the Mac mini. One glaring omission was connecting the iPhone to .Mac, probably because .Mac is not cross-platform but the iPhone is.
    Unstrung reader Mike Perlman

Indeed. It's important to remember that not everything Jobs touches turns to gold; and Apple has set such high expectations with the iPhone that anything but a monster, iPod hit will be seen, particularly by Wall Street, as a disappointment. And finally:

    My rep has given me NDA access to a new top-secret, as yet unannounced and undeveloped mobile phone OS. It is code-named "Stealth Bomber" and incorporates Zune, Windows Vista Ultimate Edition, Windows Home Server, XBOX 360, Microsoft Exchange and SQL Server 2005. The phone has 4GB of RAM and requires 512MB of video memory. My rep was using it and said it was smoking hot. When one of my MCSEs joked it was probably hot from temperature, I fired him on the spot and my rep had MCS black-list him all over the job boards. Apple is so finished here. Microsoft Corp. (Nasdaq: MSFT) owns the consumer space. With offerings so elegant and so refined, who can question this?
    — Mike Cox, posting on Engadget

Umm, we assume he's kidding. Right?

— Richard Martin, Senior Editor, Unstrung

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