Apple's iPhone: Technology Product of the Year

Oh, iPhone. Even typing your name feels trite at this point -- but that's exactly what makes you a perfect candidate for IndustryWeek's IT Product of the Year for 2007.

Even for those who didn't wait in line for days to buy one, there's no doubt that by now, the tide of hype associated with Apple's iPhone has washed up on your shores. Whether during the initial buying barrage, the backlash over the $200 price drop, the "bricking" of many illegally modified iPhones by Apple, or the bombshell announcement of Apple's reversal of position on third-party software development, this newest "must-have" device has been in the news since its launch six months ago.

Since its theatrical unveiling nearly one year ago, the iPhone has inspired the kind of contentious cultural divide usually associated with significant icons or landmark events -- i.e., you're either sick to death of hearing about it (if so, read no further) or you can't get enough of it -- in which case, read on.

What is the iPhone? The iPhone is a pocket-sized Macintosh computer that uses an unique and intuitive touch-screen interface for surfing the web, scrolling through pictures and music, and making calls, sending text messages and emails. The ability of users to literally let their fingers do the walking through the iPhone's operating system, and even around the Internet, has been described by even the most jaded tech reporters as a "thrilling" experience.

This potent combination of the extreme usability of an Apple-designed touchscreen operating system with the portability and "cool factor" of an iPod media device makes for a product that raises the bar for what people expect from their information appliances, and signifies the contemporary convergence of disparate technologies into a single, handheld unit. With 1.4 million units sold to date, the inevitable verdict is that Apple's iPhone has been a golden fusion of product development, design and marketing -- and another huge win for Apple Inc., an IW 50 Best Manufacturer.

Calling it "golden" is no exaggeration -- ounce for ounce, the iPhone is some pretty precious metal. Consider the margins for a moment. A teardown of the device by the tireless tech investigators at iSuppli reveals that the standard (8GB) iPhone has a total hardware bill of materials and manufacturing cost of $265.83, "generating a margin in excess of 55% at the $599.00 retail price," comments iSuppli principal analyst Andrew Rassweiler.

And that's not even counting the revenues from AT&T's exclusive iPhone contract. The tough deal Apple struck with AT&T has been estimated by Piper Jaffray analyst Gene Munster to be worth about $18 per month, per contract, for every iPhone activated on AT&T's network, adding up to more than $430 of revenue for each device for a typical two year deal. Pre-price drop, that means every iPhone sold brought in a ballpark estimate of $1,030 of revenue.

Another equally golden aspect of the iPhone is the "halo effect" currently shining onto the rest of the Apple line. In his year-end statement to investors, Apple COO Timothy Cook noted that Apple shipped 2.2 million Mac computers, a 34% jump over a year ago, and 400,000 more units than the company's previous quarterly record. Most tellingly, 50% of the Macs sold in Apple retail stores were to people who had never owned a Mac before, Cook said.

Finally, a recent corporate decision by Apple's leadership could bring a new, perhaps even more lucrative, customer segment on board for the iPhone -- the business smartphone user community. By "opening up" the iPhone to third-party development, Apple is removing a major stumbling block to development and upscale market penetration and giving legions of clever, talented and eager "independent software developers" (formerly forced to operate as hackers) the chance to build tools that will legally integrate the iPhone, and Apple in general, further into the enterprise.

Whether or not this new, user-improved product immediately grabs executive market share from RIM, Nokia, Palm and others, there is no doubt that the iPhone will have an impact, either direct or indirect, on every handheld computer device that comes after it. That fact, more than anything else, makes the iPhone our choice as the IW IT Product of the Year for 2007.

http://www.industryweek.com

The iPhone Reviewed

Underneath its sleek exterior and slick advertising, the iPhone relies heavily on a single piece of technology.

Such dependence could be a weakness, but here it's a strength because - to put it simply - the touchscreen is years ahead of anything else on the market. Wave a digit and your contacts scroll by; flick a finger and your pictures fly past. Even for old hands, the accuracy and intuitiveness of the interface should provide a few jaw-dropping moments.

Elsewhere, the software seems equally well crafted: phone calls, SMS and email are straightforward and the iPod functions work well. Even the on-screen virtual keypad - a potential bugbear for those used to hammering real buttons - is intelligent enough to get you texting at a respectable speed.

Wi-Fi access is a doddle, and the Safari browser renders websites beautifully - although sometimes it feels like the web got shrunk in the wash.

There are a few bugs and annoyances, however; the inability to send an SMS to more than one person, or the under-powered 2 megapixel camera. The 8GB memory limit won't raise a smile from music fans, nor will the recessed headphone socket which forces you to use Apple's earbuds.

The biggest problem, though, is the phone network itself. While the call plans available are fairly competitive, the fact that you're running on O2's mobile system makes the trip a little less enjoyable. O2 insists that it is rolling out faster Edge networking where it can, but it's tough to get any reception at all in many places - Edge or otherwise.

It's the iPhone's overall approach to mobile phones that will probably have a lasting influence, however. As the mobile revolution took hold, we all became used to wrestling with the deficiencies of our handsets. But the iPhone cuts through that predictable haze of awkward moments and messy menus: somehow, almost, it is as if Apple has wrangled the cats back into the bag.

Arthur C Clarke's third law of prediction says that "any sufficiently advanced technology is indistinguishable from magic", and - for all its solid engineering - it's the little flourishes that make the iPhone a joy to use. At £269 plus an 18-month contract with O2, it is far from cheap, but even if you decide not to buy one, chances are that in a few years every mobile will have a little of Apple's magic dust sprinkled on it.

(the guardian)

Unlock Your iPhone

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info: http://iphone.unlock.no/