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Apple's iPhone and Its Ramifications

By Steve Tsai, Managing Editor, Internet Journal

During his Macworld 2007 keynote in San Francisco, Apple CEO Steve Jobs finally announced the long-awaited Apple iPhone. It is a slick designed product that has met and exceeded people's expectation. Here are what we see in the device as well as its business impacts.

Product Functions
iPhone is three devices in one: a wide-screen iPod with a touch screen, a cell phone, and an Internet communications device. iPhone measures 4.5x2.4x0.46 inches.

Configurations and Pricing
iPhone comes in two configurations: the 4GB .model will be price at $499 and the 8GB model will be $599. Both require 2-year contract. The carrier is Cingular, soon to be renamed AT&T Wireless.

iPhone will be available in June. Both Apple and Cingular stores will sell the phone starting in June. Europe will get it in the fourth quarter, and Asia will have to wait until next year.

Unique Features
World phone support, the Yahoo e-mail app, stereo Bluetooth, and Wi-Fi
A world phone: iPhone is a quad band cell phone with GSM 850, 900, 1800, 1900. Therefore it can used anywhere in the world.
VisualVoicemail: Voicemails are listed like emails. Therefore, you can select the one you want to hear and listen to it without calling the voicemail number.
Touch Screen: There is only one hardware key, the home key. The virtual keyboard is displayed on the screen.
Large Display: A 3.5-inch screen with a resolution of 320x480 pixels per inch. The smart screen automatically shifts to  landscape display when playing video.
Smart Sensors: Unique sensors that detect how you're using the phone and change the display accordingly. A proximity sensor knows when you bring the phone to your ear and then dims the screen and shuts off the touch screen. The ambient light sensor adjusts brightness and saves power, and the accelerometer knows when to switch between landscape and portrait orientation
Slim Profile: iPhone measures 4.5x2.4x0.46 inches. It's of the similar size as the 
Palm Treo 750 , and its weight (4.8 ounces) is mostly standard for a handset of this size. iPhone is thinner than both the Motorola Q and the Samsung BlackJack.
Flash Freedom: There is no restriction on iPhone's flash memory on how much you can to fill up with media content. Unlike the Motorola Rokr, there is no 100-track limit.
Camera Phone: the iPhone runs on Mac OS X and promises a 2-megapixel camera, a photo-management tool that rotates the display for landscape photos (like with videos), support for Google Maps, conference calling, a speakerphone, and text and multimedia messaging.
Personal Organizer: We imagine there will be personal organizer applications as well, but Jobs kept mum on such fine details.
Connectivity Options: Stereo Bluetooth, Wi-Fi, POP3 and IMAP4 e-mail, and a Safari Web browser, and  Yahoo e-mail app.

Apple's foray into the converged cell phone market could change the dynamics of the power structure in the mobile communications industry. The power has been with the carriers. They decide what cell phone models to carry, at what price points, with what features. People would compare the rate plans of the various carriers and decide on one. Only the would they look at what Nokia, Motorola, SONY, or Samsung models that the carrier offer.
iPhone can change this selection process. People who are interested in iPhone decide on iPhone first and then look at which carriers offer the iPhones. With its 100M iPod loyal followers, Apple has the leverage and muscle to decide what it wants to put in the iPhone and at what price - not dictated by what the carriers want to see in features and in price. To make iPhone a world phone is the smart choice. People will be identified with iPhone as a branded personal accessory and will keep it for a while. This could also change the usage pattern of changing phones every year.
Apple's unique position of power means that iPhone will always fetch a price premium and a core die-hard users. This situation will be very similar to the current Mac vs. PC market dynamics. Apple is the leader is style and uniqueness while PCs look bland and boring. It is no wonder why Mac's growth is twice that of the PCs. We are likely to see a similar situation in the cell phone space as well.

Potential Losers
iPhone has great potential to move music phones into the mainstream. iPhone's price is a bit high when compared to other carrier-supported music phones such as the Sony Ericsson W810i . Nokia's Xpress music phones and Sony Ericsson's Walkman handsets would present a strong challenge iPhone, but Samsung's new Ultra Music probably stands to take the biggest hit. Other smart phones like Rimm's Blackberry or Palm's Treo could also be affected. Palm may take a bigger hit since its user base consists of both businesses and consumers. Watch the stock price for these companies. It represents the market's perception of the iPhone's potential impacts.

About The Author
Steve Tsai is the Managing Editor of the
Internet Journal http://www.intnetjournal.com. Internet Journal provides the insights and analysis on Internet marketing, eCommerce, mobile communications, mCommerce, and global e-Business. If you have any comments about Internet Journal, please send email to stt@intnetjournal.com.


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