Prepare for the iPhone Backlash

This column was originally published on RealMoney on June 14 at 12:03 p.m. EDT. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.

The launch of Apple's (AAPL) iPhone is just two weeks away -- and any day now, we'll get some real information about the model's pivotal features and associated service contract.

It is almost unprecedented that we know so little about a high-profile mobile phone this close to its launch. We do, of course, know that the 4GB model is priced at $499 and the 8GB model at $599. However, the true price of a mobile phone is a combination of the device's price, the applications it offers and the price of the service contract.

For instance, an unlocked expensive phone that features GPS support and VoIP applications can save notable sums over a period of two years. That's because its users can switch freely to low-cost mobile service providers, substitute it for a dedicated GPS device and use WiFi for long-distance calls. On the other hand, a model that lacks such money-saving features can carry a steep long-term cost for its owner.

How well do consumers factor in long-term cost and substitution? How much do they care about mobile VoIP's cost-saving potential and the ability to switch carriers? This is hotly debated among device vendors and mobile operators, and we may gain crucial insights on it over the next 12 months.

Apple and AT&T (T), the iPhone's exclusive distributor, have battled over many issues in their deal. In fact, some of Apple's demands were so unusual that they drove away Verizon (VZ), the first pick for the iPhone carrier. Thus, AT&T became the only realistic alternative in the U.S., as Sprint (S) and T-Mobile would be too small for a major launch like this. This gave AT&T genuine leverage over Apple -- and that has likely resulted in some restrictions that may turn out to be controversial.

	Will you buy an iPhone? Answer Here