Industry observers stalking the development of Apple's highly anticipated iPhone are abuzz over patent filings showing blueprints for a mobile device that also incorporates a number of functions like a PDA, music player, video player, game player, digital camera and GPS satellite location.
The patent filing, which includes two pages of sketches depicting several devices, covers a broad range of shapes and features.
"You can tell the legal team was involved, they covered all the bases," says American Technology Research analyst Shaw Wu, referring to the breadth of possibilities presented in the filing. Wu issued a report Friday on Apple's iPhone plans.
The news comes as Wu's colleague Albert Lin published a report Tuesday announcing that Apple's iPhone
is set for production early next year.
While mobile tech trends have long pointed to so-called converged devices -- gizmos able to perform a multitude of functions -- analysts and investors have been taking special note of Apple's efforts, given its success with the iPod. Apple fans say that just as the iPod single-handedly remade the portable music-player business, the iPhone could do the same for the much larger mobile-phone industry.
The iPhone that Wu and Lin expect to hit retail markets early next year, is likely to be a music phone aimed at
popular Walkman phone and
With global phone sales levels expected to reach more than 1 billion units next year, Lin estimates Apple can capture about 1% of that market. With an average selling price of $200, that could mean a new $2 billion revenue stream for Apple. Both Lin and Wu have strong buy ratings on Apple.
The emergence of an iPhone also raises questions about how Apple plans to crack the wireless market. Currently, the telcos, especially in the U.S., determine what phones and what features will be available to consumers.
Apple could play along with the rules and comply with all the telcos' requirements.
But Wu and Lin expect the tech maverick to go its own way by offering a wireless service to go along with the iPhone. Ventures like
resell other telco's wireless service under their own brand. This strategy is known as mobile virtual network operator, or MVNO.
The MVNO trend seems to be sputtering a bit lately. Niche players like ESPN Mobile, which started by reselling
service last year, have fizzled of late, say analysts.
That doesn't mean much to Apple bulls though. The MP3 music-player business was thought to have reached its potential when Apple decided to enter the field. However, the pleasing iPod design and easy-to-use iTunes service quickly took off with consumers.
"Apple is a company to watch out for," says Wu. "This is when they are the most dangerous. They could turn the business model upside down."