iPhone Remains an Enigma

Less than three months remain until AT&T (T - commentary - Cramer's Take) is expected to launch the iPhone in the U.S. Both Apple (AAPL - commentary - Cramer's Take) and AT&T have opted to remain mum about crucial price and performance details -- even as they ramp up the hype. It's a strategy that risks a backlash, particularly since the iPhone does not fit comfortably into either the business or luxury phone categories.

The Tease Continues

Tellingly, this week's big news item about the iPhone wasn't about the device. It was about the hype around it, as AT&T announced that more than a million people have already inquired about the phone.

This is an impressive number, but consumers are in an information vacuum. Unusually, AT&T has not revealed either key pricing information or key performance figures that would enable consumers to make an informed decision about the device.

Let me give an example: With AT&T, you can get a reasonably hot new smartphone, such as the Samsung Blackjack, for free after rebates if you commit to a $60 monthly plan. For $80, you get more mobile data flexibility. For $100, even more.

With BlackJack -- or similar devices -- you get a robust smartphone that handles Windows OS, Java applications and 3G mobile data for a moderately priced monthly plan. It weighs just 3.5 ounces and has a very good display -- not as gorgeous and advanced as Apple's state-of-the-art touch display, but sharp and vivid nevertheless. The stand-by time is a terrific 10 days or more. This is a model most businesses would consider a good purchase, with the Windows compatibility, Outlook synching and a variety of business applications being major selling points. The iPhone lacks all of that, while costing much more.

We have no idea what AT&T's final pricing plan for the iPhone is. I have heard it may be a combination of a $500 phone price and an $80-$90 minimum monthly fee for two years. You don't get a smartphone for this steep price -- the iPhone will not handle Windows or Symbian applications, not even Java, Flash or Outlook sync. We don't know what kind of energy-consumption profile it has. There is reason to believe the vast and vivid display combined with Apple's lack of familiarity with phone technology might render the iPhone something of an energy hog.

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At time of publication, Kuittinen had no positions in the stocks mentioned, although holdings can change at any time.

Tero Kuittinen is a senior product specialist for Nordic Partners, Inc., a pan-Nordic brokerage firm. Although Kuittinen is an employee of Nordic Partners, Inc., the statements above are being made in Kuittinen's personal capacity and are in no way are the statements of Nordic Partners, Inc., nor attributable to the company. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Kuittinen appreciates your feedback; click here to send an email.