And The Reviews Are In…..

What Drudge represents as the “First Review…” of the iPhone was published in today’s New York Post. The headline, DON’T GET ‘HUNG UP’ ON BUYING AN IPHONE probably says it all.

To my point in my previous post:

But it’s not an iPod. It’s a $500 or $600 communicator that requires a two-year calling commitment. Monthly charges haven’t been announced, but judging by comparable offerings from AT&T and other carriers, it should run you at least $50 per month in voice service and $40 per month in data service. That adds more than $2,000 to the iPhone’s price tag over two years even before buying music or movies!

Consider also that Apple engineers already are hard at work on iPhone 2.0.

Modern cell networks use third-generation (3G) standards that are five to 20 times faster than that in the iPhone. Jobs said the chips to make a 3G iPhone weren’t available when they designed the iPhone; but they are now, and are in some competitors’ less-featured but faster phones.

Further to my point, The Wall Street Journal in what is otherwise a sterling review says this:

But the iPhone has a major drawback: the cellphone network it uses. It only works with AT&T (formerly Cingular), won’t come in models that use Verizon or Sprint and can’t use the digital cards (called SIM cards) that would allow it to run on T-Mobile’s network. So, the phone can be a poor choice unless you are in areas where AT&T’s coverage is good. It does work overseas, but only via an AT&T roaming plan.

In addition, even when you have great AT&T coverage, the iPhone can’t run on AT&T’s fastest cellular data network. Instead, it uses a pokey network called EDGE, which is far slower than the fastest networks from Verizon or Sprint that power many other smart phones. And the initial iPhone model cannot be upgraded to use the faster networks.

Interestingly enough Apple stock was down today $2.69 (2.20%).

iPhone: The Day The Cell Phone Died?

If you listen to the Mac O’Philes the iPhones upcoming release this Friday spells gloom and doom to all non-iPhone cellular device manufacturers, and indeed the entire cellular industry will soon be on it’s knees worshipping at the altar of Steven Jobs.

Interesting story by Jordan Robertson I read on My Way News today points out that the hype has reached such a level that any negative news sends the market into a tailspin:

It goes on sale this Friday, and die-hard Apple fans are expected to line up overnight or longer outside retail stores to get their hands on an iPhone for either $500 or $600.

But skeptics wonder whether even the most innovative product could live up to the iPhone’s lofty expectations – and whether the pre-launch anticipation has spiraled too far out of control. Scrutiny of the product is so great that any small disappointment could send Apple’s stock plunging, experts say.

Technology analyst Mike McGuire said Apple fans have elevated the status of the iPhone to unprecedented proportions – “somewhere between electricity and sliced bread.”

“The blessing is you’ve created an amazing amount of demand. The curse is you have a very high level of expectations to meet,” said McGuire, a research vice president with Gartner Inc. “If there’s a misstep, there will be a lot of gloating people in the industry.”

But the hype has also hurt Apple.

The launch is being so closely watched that Apple’s share price plunged more than 4 percent in a matter of minutes last month after a rumor about a delay was reported on Engadget.com, an electronics Web site. The rumor was quickly corrected by Apple, and the stock largely recovered by the end of the day.
“That just shows how powerful this has become,” said Chris Hazelton, analyst with market researcher IDC, who said the amount of hype is “almost dangerous to the success of the device.”

No one can deny Apple’s ownership of style and the simple elegant user interface, but the key difference here is that the iPhone will not only come with a hefty price tag but with a two year service committment to AT&T as well. Regardless of how cool the device is it’s performance will be inextricably tied to AT&T’s 2G cellular data network. If this version disappoints, by the time the 3G version comes out next year the user base could be disillusioned and skeptical, not to mention still  a year short of being eligible for a hardware upgrade for another year.

My view is that Apple has entered a market they know nothing about, tied themselves to a single sales channel, overhyped their product, and overestimated the “Wow!” factor they are counting on to drive sales.

All things considered, I’ll wait this one out. If the iPhone is still around in a year or so when I’m eligible for an upgrade, I’ll give it a look.