Apple Unveils the iPhone

OK, so I missed the date of the iPhone announcement by a day--but other than that, many of my prognostications about Apple's much awaited iPhone came true--with one big exception.

Steve Jobs announced the phone at the Macworld Conference today in San Francisco, describing it as three products in one: "a widescreen iPod with touch controls, a revolutionary mobile phone, and a breakthrough Internet communications device." OK, so I got two out of three right--I didn't see the Internet communications device coming, whatsoever.

First, the phone is indeed a quad band GSM "world phone" with high-speed EDGE data connectivity (OK, I nailed it so far), but it also offers WiFi connectivity (I totally missed that one!). Apple inexplicably partnered with Cingular, so you'll need to be a Cingular customer to buy the phone, and I would imagine that it will be next to impossible to get an unlocked version of the iPhone (that could be used on other carrier's networks). I believe that this is a poor move on Apple's part--even though Cingular is the largest wireless carrier in the US, an exclusive relationship automatically cuts out T-Mobile's ~23 million subscribers as potential customers (Cingular has around 42 million subscribers). If Apple had instead chosen to go with a carrier-neutral strategy, it would therefore have had access to a whopping 65 million potential users--and that's just in the U.S. The total GSM user base, world-wide, is over 2 billion subscribers in 212 countries!

The iPhone will be released in June, feature flash memory capacities in either 4GB or 8GB increments, priced at $499 and $599 respectively (no word on whether these prices will be with a contract or not--if not, then subtract a couple of hundred dollars from the price, and all of a sudden the iPhone starts to look much more appealing!). It will also feature a 2 megapixel digital camera, will send and receive email and surf full-size web pages. The big news is that the iPhone will also sport a touch screen--a first for Apple--and a beautiful 3.5 inch high-res screen. Another interesting tidbit is that the iPhone actually runs OS X - the Macintosh operating system - and not the iPod embedded OS.

My analysis of the announcement? Probably one of the most awesome engineering feats that I have seen in mobile phone handsets. Clearly targeted at consumers (no support for email attachments, for example). Severely limited market through the exclusive partnership with Cingular, by pricing the device so that it will appeal only to the high end of the consumer market. I think this actually makes sense--Apple doesn't want to sabotage their core iPod market (particularly the high end iPods).

That said, there is no doubt that legions of loyal iPod users ready to line up to get the latest and greatest gadget from Apple--and I very well may be one of them!

One more wrinkle--Cisco actually owns the trademark on 'iPhone'--expect a lawsuit to be filed in the next couple of days. Apparently Apple has been trying to negotiate the use of the name with Cisco, and ran out of time--and now they're going to have to get it through litigation or change the name of the phone. This will be an interesting case to follow.