Asking Questions on Apple's iPhone

History also shows that it not a great idea to bet against Sir Steven Jobs, the master of innovation. To be sure, the iPod is far from being the next Nehru jacket. According to Walt Mossberg, The Wall Street Journal's personal technology columnist, the many pixels per inch creates a user interface that is very sophisticated and vivid, serving to make his (and my) "Treo look primitive."

The iPhone contains many new and innovative features beyond the virtual keyboard, such as its "visual voice mail which allows users to go directly to any of their voice messages without listening to any of the prior messages."

Challenges Ahead

Nevertheless, Apple faces a number of potential obstacles to reaching the company's goal of selling 10 million units next year. (If the company's sales goal for 2008 is achieved, it will represent twice as many as current BlackBerry unit sales and nearly one-fifth of Cingular's total handset sales.) Here are some additional concerns raised by the aforementioned industry reviews:

1. High selling price spells limited marketing potential. Apple is attempting to carve out a niche at the very high end of the smartphone category. The pricing strategy is not without risk. The 4GB model will sell for $499, and the 8GB model will sell for $599. This elevated and premium selling price coupled with a mandated two-year contract (at about $80/monthy) will produce a full-term commitment of about $2,500, suggesting somewhat more limited marketing potential.

An 8GB iPod nano and a high-end handset with similar features to the iPhone would retail for under $300, so the planned pricing implies a 100% premium for device integration and "the coolness of all things Apple."