The iconic iPhone is entering a critical third year amid tougher competition, and if expectations are accurate, the upcoming version brings few, if any, must-have new features. Without a steep price cut like last year, iPhone demand will slide.
Apple has sold about 20 million iPhones in its two-year stretch. That is a phenomenal performance for an expensive phone -- $200 plus a mandatory two-year AT&T (T - Get Report) service charge that averages around $2,400.
The new features expected on the next iPhone model -- e.g. video and more memory -- sound nice, but they aren't likely to inspire crowds to camp out in lines at the Apple store.Three years is a significant milepost in the life of cool gadgets. The previous icon of phone design, Motorola's (MOT) Razr, which debuted with a $600 price tag, had a sweet three-year performance, with more than 100 million units sold before the curtain came crashing down. Certainly the iPhone is a whole generation ahead of the Razr -- it's easy to use, has loads of fun features, etc. -- but many rules of the hot-then-cold consumer market still apply. The iPhone's sleek form and nearly wall-to-wall touchscreen is appreciably elegant. But it's asking a lot for that design, without significant alterations, to carry the trend as robustly for a third year. Meanwhile, new entries such as Palm's (PALM) Pre smartphone, Research In Motion's (RIMM) BlackBerry Storm, a few new touchscreen phones from Nokia (NOK - Get Report), phones that run on Google's (GOOG - Get Report) Android platform, and endless new offerings from Samsung and LG make a for a fresh crop of worthy competitors.