APPLE iphone:

the best thing since sliced bread …
or another fashion statement for Paris Hilton?

“We want to make a leapfrog product, smart and easy to use” Steve Jobs of Apple, introducing the iPhone to a grateful world.

And so all the rumours turn out to be half-true. Yes, Apple has come up with a smartphone that plays music, thus covering the possibility that it might lose some of the iPod market to the likes of Samsung and Sony Ericsson.

But no-one anticipated just how much innovation the technology itself would feature. Still less did they forecast how fuzzy the market positioning would be.

What you get
The iPhone is a thin slab-like smartphone with quadband GSM and EDGE, WiFi and Bluetooth 2.0.

Users can make phone calls, send text messages and email, surf the Web, download and listen to music, and take and upload photos.

At 11.6mm it’s among the skinniest in its class. It’s tall (114.3mm) and quite wide (61mm) to accommodate a big hi-res screen – and it’s a touchscreen. The most notable feature of the iPhone is the near absence of buttons, switches and keys; but the touchscreen controls go way beyond the usual point and jab, and they don’t rely on a stylus.

Indeed, there’s no stylus at all ion the box. Instead Apple has used a technology that allows the use of two or more fingers at a time for some tasks – what Apple calls ‘Multitouch’. There’s a stunning demo that shows an album cover on the display, with the user pinching his fingers together on the screen to make the image smaller and then drawing the fingers apart to enlarge it. (Check it out at

On the front of the iPhone there’s a Home button and a 2-megapixel camera lens. At the top edge is a 3.5mm headset jack, SIM tray, and a sleep-wake switch. On the bottom there’s a speaker, a microphone, and an iPod connector.

The clever stuff hardware-wise includes three built-in sensors. One is a pretty standard accelerometer, which the iPhone uses to decide whether to display in landscape or portrait mode. Then there’s an ambient light sensor – adjusts brightness, saves power. And the neatest is a proximity sensor which shuts off the display and touchscreen when you bring the phone to your ear.

Under the hood there’s a processor running a version of the Mac’s OS X operating system. Said Jobs: “”Why would we want to run such a sophisticated OS on a mobile device? It’s got everything we need.

Multitasking, networking, power management, graphics, security, video, graphics, audio core animation …”

Apple has pushed the envelope a bit on the voice-call front, allowing ‘visual voicemail’ (“Wouldn’t it be great if you had six voice mails, and you didn’t have to listen to five first before listening to the sixth?” said Jobs at the launch) as well as easy conference calls and multi-way SMS conversations. On the internet side, there’s Apple’s excellent Safari browser and rich HTML emails working with any IMAP or POP3 service – including Yahoo Mail, offered to iPhone users as a free BlackBerry-style push email service.

Battery life is ok. Five hours of talk, video, and browsing ism claimed; use the iPhone as a music player and you’re promised 16 hours. Mind you, that’s not exactly revolutionary – a music phone like the Sony Ericsson W810i claims eight hours talk time and up to 30 hours of music playing.

What’s missing
Most adverse comment centred on the absence of 3G – which rather limits the internet capability to WiFi hotspots, and seems surprising now that so many operators (including Cingular, which will have the US exclusive on iPhones) are offering high-speed HSDPA.

There will undoubtedly be a grey market in imported iPhones before the European launch in Q4. Apple probably needs that delay to find a compelling argument here: 3G smartphones are often free on contract in Europe, and HDSPA speeds will be widely available by the end of the year.

Of course, the extra time could be used to develop an HSDPA version for Europe. That would make sense.

Although the iPhone is billed as a smartphone, there isn’t currently much on offer for the business user.

Yahoo Mail is never going to be the email system of choice in the business world, there’s no word on what (or whether) business apps will be available for the iPhone, and Microsoft’s new Vista version of Windows practically guarantees that there will be file compatibility issues in any case. The Nokia N800 is a cheaper web access device and has a better screen. The iPhone could find a niche as a satnav tool, but that could be an uphill struggle without onboard GPS and a mapping app – imagine trying to use a server-based route map guide without broadband-speed access.

One potential fly in Apple’s ointment is the debate about who owns the iPhone name.

Cisco says it does, and it will sue Apple to protect the iPhone trademark. But Apple was granted the same trademark in the US in September 2006 (albeit under the name “Ocean Telecom Services”) and will presumably argue that its trademark is in a different field to Cisco’s.

Mind you, one is for “computer hardware and software for providing integrated telephone communication with computerized global information networks” and the other is for “handheld and mobile digital electronic devices for the sending and receiving of telephone calls, faxes, electronic mail, and other digital data”. So which do you think is which?

Everything Apple
Apple also appears keen to control distribution of the iPhone through preferred networks, and in particular to ensure that iTunes is the sole way of accessing music on the iPhone.

Not all networks will want to sign up for this, given that many of them see data and content like music as the only way to increase ARPU in a saturated market. As one observer put it, “adopting the iPhone means a network is obliged to hand over to Apple some of its most profitable business opportunities. In doing that, it will also reinforce Apple’s monopoly of the copy-protected download market.”

And along the same lines, Apple almost certainly wants to cut out the third-party supplier. So there’s no expansion memory card slot, there probably won’t be a user-replaceable battery, and it’s unlikely that independently-produced software apps will be permitted. To fix an iPhone you’ll probably have to take it to an Apple Store. To expand it, you’ll probably have to buy a new iPhone.

Incidentaslly, iPhone users won’t be able to download over-the-air from iTunes. Instead they’ll have to load music from an Apple or Windows computer which wil lhave done the downloading.

Ovum analyst Jonathan Arber thinks Apple is right to stick to sideloading for now – music downloads may be viable over 3G networks, but on anything slower the user experience is likely to be poor – and user experience is what Apple prides itself on.

Says Arber: “It is definitely better to wait until OTA downloading is a realistic proposition before launching ‘iTunes mobile’, as an early bad experience may kill user interest in such a service before it really has a chance to get going.”

Pricing is another concern: the iPhone looks expensive. The base 4GB model is going to be $499, about £250 at current exhcnage rates, with an 8GB version promised at $599. At those prices the iPhone comes in near the top of the smartphone market; Apple says you’re getting a smartphone and a video iPod in the one package, but it’s debatable whether anyone is going to buy an iPhone to replace their current phone and their iPod (especially not the 30 and 40GB iPods).

Market researchers iSuppli have estimated the total manufacturing cost for a 4GB iPhone (hardware only, not software or R&D) at about $230, suggesting Apple takes a gross margin of nearly 50%. That’s in line with the margins Apple has reportedly taken on the iMac and iPod Nano, and suggests there is room for price drops in the future.

Jobs says he’s looking to sell 10m iPhones in 2008 for a 1% market share. The consensus among analysts is that this is unduly conservative; whether or not the iPhone is in fact much better than the competition, it will have the same cachet as the iPod and will sell to the style-conscious. As one Apple watcher put it rather unkindly, “this is a phone for Paris Hilton.”

Hip or hype?
Not everyone agrees with this downbeat view. Another Ovum analyst, Martin Garner, sees the iPhone as a major success in the making: “It would have been easier for Apple to enter the market with an established form factor (some of the early rumours focused on a slider phone), improvements to the UI and special music features. Apple has scored a major hit by not doing a me-too product, but by going for a very high degree of differentiation.

“Instead, by entering the market with a smartphone, Apple has joined the fastest-growing segment of the mobile phone market. We believe that the iPhone will define a significant new category of smartphone devices and set the bar at new levels.

“It has also positioned the iPhone as an upgrade to the iPod – many of the early buyers will be iPod users. Steve Jobs described it as ‘the best iPod ever’. We think this is sensible, since the product will launch initially in the US, where the smartphone market is weakest.”

Hands on
Our man in the States reports on a the half-hour hands-on experience allowed to selected journalists.

• The touchscreen is brilliant, simple and intuitive. You can’t wear gloves, though, and you can’t have a protective cover on the display (though it’s supposed to be more scratch-resistant than the iPod – the Nano, on the other hand, is notorious unresistant).

• The virtual keyboard is stunning – large, easy-to-tap buttons and with an autocorrecting interpreter than will pick up many of your typos. And accidental in-pocket-dialling is eliminated once and for all. Downside? No tactile or auditory feedback.

• The email and web browser apps are as capable as those on a desktop PC (or an Apple computer). There are no obvious compromises. There are some obvious omissions – none of the familiar multimedia plug-ins like Real Player or Flash, for instance – and Apple says it will be developing this kind of thing inhouse. Third party software won’t be allowed unless it has been certified by Apple (and probably sold for download via the iTunes store).

• The music and video playback is excellent, as you’d expect. Touchscreen control really does work well, even for scrolling through a very long playlist. It’s not the iPod clickwheel, but otherwise it’s as easy to use.

• The screen is pretty good, but it doesn’t compare with the display on the Nokia N800 (see our review on page 51). As a pocket web browser, the N800 is also considerably cheaper at $399.

Length 115mm
Width 61mm
Depth 11.6mm
Main display    
TFT touchscreen, 16M colours, 320×480 pixels
2MP, 1600×1200 pixels, video
Quadband GSM, EDGE, WiFi,
USB 2.0, Bluetooth 2.0
Standby not quoted
Talk time 5h
Mac OS X v10.4.8,
Safari web browser, Google Maps, push email (Yahoo Mail), POP3 and IMAP email, iPod audio/video player, PIM including calendar, to-do list, Photo browser/editor, Voice memo, integrated handsfree

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