The Economist has an interesting analysis: expect better targeted,
cheaper iPhones by as soon as january:
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Tech.view
Eye phone

Jun 29th 2007
>From Economist.com
Apple is changing the way we view mobile phones

YOU have to admire Apple's chutzpah as much as its creativity. Any
other newcomer to the mobile-phone market would have allowed, indeed
encouraged, potential customers—the Verizons, T-Mobiles, AT&Ts of the
world—to have at least some say in what went into its fledgling
device. Even Nokia, the biggest handset maker in the business, has
always listened carefully to its clients.

Not Apple. Since its conception early last year, the company's heavily
hyped iPhone (which finally goes on sale in America today) has
remained remarkably untainted by industry group-think. In exchange for
exclusive rights to offer the phone in America for at least the next
couple of years, AT&T has had to refrain from any form of meddling.
And it shows—both for good and for bad.
Click here to find out more!

The iPhone is all you would expect of Apple—thin and sleek, with the
biggest screen ever seen on a mobile phone. It combines all the
functions of a smart phone, internet appliance and multimedia player
seamlessly in one handsome device.

Using a subset of Apple's rock-solid OS X operating system means the
iPhone's 16 built-in applications—including phone, address book,
calendar, alarm clock, organiser, camera, web browser, e-mail client,
Wi-Fi terminal, video and audio iPod—work together in a clear, simple,
intuitive way that has become Apple's hallmark.

As with an iPod or iMac, it's the user interface that impresses most.
With the iPhone, Apple has taken its sense of minimalism a crucial
step further. The phone has no clunky keyboard or rows of fiddly
function keys, and no pop-up menus to plow through. Instead,
everything is done by tapping, pinching or swiping a finger on the
phone's touch-sensitive screen. Get lost among its many different
displays, and the gadget's one solitary button takes you straight back
to the home-page showing icons for the phone's various functions.

A virtual QWERTY keyboard pops up on the screen when you need to write
a text message or an e-mail. Tricky, yes, but the software is smart
enough to guess what you meant to type and will correct most mis-keyed
letters.

Another bit of out-of-the-box thinking is the iPhone's web browser.
Unlike the tiny cut-down, text-based Mobile Web offered by Verizon and
the rest, Apple has implemented a rich set of browser features that
lets the iPhone display pretty well the same web pages you get on a
computer. You can scroll down by dragging a finger over the screen,
and enlarge anything you can't read by simply double tapping on it.
Spread two fingers across the screen and the whole image gets
magnified.
AFP The phone of the future

But just because Apple is clever enough to do all these things, and
more, does not mean they will necessarily be appreciated beyond the
Macaholics, fashionistas and other early adopters. Much has been made
about the way Apple has bravely bucked the trend by building a
"convergence" device—an appliance that melds many functions into
one—instead of pouring its prodigious energies into a "divergence"
product that does one thing brilliantly, as it did so successfully
with the iPod. All the blockbusters of consumer electronics—video
recorders, digital cameras, plasma TVs, Nintendo game consoles, MP3
players, as well as the vast majority of mobile phones—have been
divergence devices. By contrast, convergence products, such as smart
phones and media-centre PCs, have either flopped or finished up
occupying niches.

The danger in developing a gadget that tries to be a phone, internet
appliance and iPod all in one is that it can fail to accomplish each
as well as it might. Unfortunately, the iPhone comes up short in a
number of areas. For instance, it does not include voice
dialing—essential now that hands-free is fast becoming the only way
that mobile phones can be used legally in cars. Also, simply making a
phone call is more cumbersome than it should be, requiring up to half
a dozen different steps. And because the phone can't take advantage of
high-speed 3G cellular networks, surfing the web is more like wading
through molasses.

As an iPod, the iPhone is also less than adequate—especially when
trying to store videos and photographs as well as songs. The $500
model has only four gigabytes of storage, while the $600 version has
eight gigabytes. These days, iPods come with 80-gigabyte hard-drives.

If the iPhone's potential is to be fully realised, Apple will need to
do two things in a hurry. As with the iPod Nano, it will need an
entry-level model that's much cheaper and more focused. And as with
the iPod itself, it will need to make the mainstream model a good deal
more polished. That means adding more storage, a modern broadband
radio, a slot for an external memory card, a GPS receiver for
real-time navigation and software which, among other things, allows
the phone to capture video as well as send photos to others.

Insiders reckon that Apple could halve the current price of the iPhone
and still make a profit. That leaves the company plenty of wiggle room
to prove the naysayers wrong. Expect to see cheaper and better iPhones
perhaps as early as January.

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