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iPhone Hype Intersects with Reality

Written By Brian Hicks

Posted June 28, 2007

With the long awaited debut of Apple’s iPhone tomorrow, Steve Jobs won’t be the only one hoping to earn a buck or two after six months of hype. In fact, a virtual cottage industry has sprung up surrounding the release.

Paid "spot sitters" and enterprising entrepreneurs hoping to flip a phone or two on eBay later in the day have joined the rest of the crowd in the beach chairs and sleeping bags camping out in front of the various stores. Their long wait nearly over, each one plans to be among the lucky few–the proud owner of a new phone.

It’s all absolutely insane. In fact, it reminds me of the hype last fall surrounding PlayStation 3, only Christmas is seven months away.

My only hope is that this time it all turns out a little bit better. In November, some of PlayStation 3’s "lucky few" were mugged, shot, and trampled in the rush to get hold of one.

To that end, AT&T, Apple’s network partner, has overstaffed and added security measures just in case things do get out of hand at one of its 1,800 locations. Apple is merely hoping to ride the crest wild of anticipation, not to cause a mêlée that ends up on YouTube.

Apple has simply done it again. iPhone buzz is in overdrive.

Since Jobs unveiled the iPhone in January, it has been the most talked about and debated gadget since the Segway Human Transporter in 2001. But unlike Dean Kamen’s wheeled machine that was going to "revolutionize transportation," the hype surrounding the iPhone seems actually to be in tune with reality.

Apple’s new product appears to promise dramatic changes not only in how we will use our cell phones, but what we expect them to do in the future. That, after all was part of Jobs’s mission–to shrink the size and complexity of the cell phone user guide while offering great services.

Early reviews have been–for the most part–quite positive.

Newsweek’s reviewer said the phone "comes pretty close to the bombast," while USA Today called the device "worth lusting over."

On top of that, David Pogue, gadget expert for the New York Times, said the iPhone is "still the most sophisticated, outlook-changing piece of electronics to come along in years. It does so many things so well, and so pleasurably, that you tend to forgive its foibles."

Among those foibles, according to early reviews, is the network that it’s attached to.

The iPhone won’t work at all without a two-year AT&T voice-plus-Internet plan.

That, according to Pogue is one of the drawbacks. According to Pogue’s review, published yesterday:

"The bigger problem is the AT&T network. In a Consumer Reports study, AT&T’s signal ranked either last or second to last in 19 out of 20 major cities. My tests in five states bear this out. If Verizon’s slogan is, ‘Can you hear me now?’ AT&T’s should be, ‘I’m losing you.’

"Then there’s the Internet problem. When you’re in a Wi-Fi hot spot, going online is fast and satisfying.

But otherwise, you have to use AT&T’s ancient EDGE cellular network, which is excruciatingly slow. The New York Times’ home page takes 55 seconds to appear;, 100 seconds; Yahoo two minutes. You almost ache for a dial-up modem."

Ache for a dial up modem? Ouch.

That may be where the iPhone’s Achilles heel is ultimately found. After all, what good are all of those benefits and features if your network fails to deliver them? Form is cool, but without function, cachet is seriously crippled.

Despite such misgivings, Apple contends that future software and network upgrades will help to close these gaps over time.

The company has forecast relatively modest sales of 10 million units by the end of 2008, which would translate into an approximate 1% share of the world market for handsets. That’s a far cry from the billion phones sold by the big three in the business, Nokia, Motorola and Samsung.

Nonetheless, the introduction of the iPhone has set each of these companies off in the race to catch up. Apple’s combination of smart phone, mobile email platform, touch screen interface, and MP3 player has sent them and numerous other hardware developers back to their drawing boards.

Tomorrow, however, the real test of the iPhone begins. That’s where hype intersects with reality. Let’s just hope that no one gets trampled because of it.

By the Way: Despite the recent weakness in the broader markets, tech stocks have been relatively robust of late. Led by strong results from Oracle, the techs helped lead yesterday’s rebound.

Next week we’ll take a deeper look at tech’s most recent performance and how growth stocks will lead the markets higher.

Wishing you happiness, health, and wealth,



Steve Christ, Editor


P.S. I recently found this interesting alternative to the iPhone: