Considering Apple (Nasdaq: AAPL) sold 1 million iPhone units in the U.S.
within 74 days of its release, it is little wonder that the imminent arrival of
the latest musthave product has sparked a consumer frenzy this side of the
Atlantic as well.
The phone, which will be launched in Britain on Friday, is expected to sell
rapidly with sales of the "breakthrough" handsets predicted to reach 400,000
The muchanticipated iPhone, a cornucopia of the latest multimedia technology
squashed into a palmsized box that contains, among other things, a mobile
phone, MP3 player, camera and wireless Internet browser, will be available in
shops under an exclusive deal with Britains largest mobile operator, O2. Never
ones to shy from even the smallest of publicity stunts, Apple and O2 confirmed
that the handsets would be available in Britain from exactly 6:02 p.m. on
Queues are expected to form early as Carphone Warehouse, the only nonApple or
O2branded store allowed to sell the device, pledged to keep all 783 of its UK
stores open during the night until the last customers leave.
The touchscreen handset will be one of the most expensive on the market at
Pounds 269 (US$566), but users will in fact have to shell out a minimum of
Pounds 899 ($1,892) during the first year and a half of ownership because the
phones can be bought only with an 18month O2 contract, with the minimum monthly
tariff starting at Pounds 35 ($74).
O2 hopes the technology, which represents Apples first foray into the telecoms
industry, will tempt thousands of Appleloyal customers from its main rivals
Vodafone and Orange, which both failed to secure the highly soughtafter
exclusive contract with the San Franciscobased company.
Big Price Plus Contract
Analysts say the decision to charge such a high price for the handset is unusual
in the UK telecommunications market, which usually provides cheap handsets if
customers sign a contract.
"Its definitely a new approach because the phone is not subsidized," said
Carolina Milanesi, research director at the analyst Gartner (NYSE: IT) , which
predicts that Apple could sell as many as 400,000 units in the next two months.
"Consumers are buying it for the user interface its essentially the latest and
greatest iPod that also happens to be a phone. In the UK were very spoilt
because we normally get a phone cheaply if we sign up to a contract but that
doesnt happen in countries like Italy, Belgium and Finland."
The launch of the handset, now Time magazines "Invention of the Year," has also
been dogged by controversy since Apple announced its first foray into the
telecoms market in January. Diehard Apple fans in the U.S., who queued through
the night in their thousands in June on the U.S. launch day, were incensed when
Apple slashed the retail price by $200 (Pounds 100) 10 weeks later.
There was also widespread dissatisfaction that, as in the UK, the handsets were
available only on one network , the U.S. telecom giant AT&T (NYSE: T) . The
exclusive deals with network providers, a tactic Apple has pursued in wider
Europe, has led to blogger backlash as well as a number of Web sites offering
software that can supposedly "unlock" an iPhones software, making it available
on other network providers.
Apple has warned that unauthorized downloads could cause "irreparable damage" to
the handsets and said doing so would void the phones warranty.
The success of the iPhone will be closely scrutinized by Google (Nasdaq: GOOG) ,
which also wants to tap into the telecoms market and has announced a new
strategy to form an alliance with more than 30 handset makers and communications
companies, which will work with the company to utilize its famously easytouse
software in their phones.
Ringing the Changes
What you can do with an iPhone ...
"Visual voicemail" allows users to view all waiting messages on screen, and
makes them accessible in any order.
The music player uses the Cover Flow software that was recently made available
to the newest iPods, the iPod touch. Listeners can flip though album sleeve
covers rather than simple playlists.
The headphones act as a handsfree kit and a remote control for music. If you
receive a call the music cuts out for you to answer and then returns to the same
The iPhones WiFi technology makes it possible to browse and buy music on the
go. Tracks downloaded from iTunes can be transferred to your computer.
The Safari Web browser allows users to access the net as if from home. The
iPhone runs on the 2.5G network rather than 3G so downloads times may not be
The iPhone could replace your BlackBerry as the best way to access emails on
Using Google Maps, the iPhone acts as a de facto GPS device. Its not as
accurate or fast as GPS but the software in the iPhone gives directions from a
users house, for instance, to a local sushi restaurant, and tracks their
... And what you cant ...
The iPhone will only be available on one network, O2. Customers will have to
sign up to an 18month contract.
There is no removable battery, no expandable storage and no multimedia