It's probably not too much of an overstatement to say that the Apple iPod and iTunes store has revolutionized the American music retailing business. In the span of just a few short years, Apple has gone from literally no presence in the business to become the number three retailer in the country.
Now, Steve Jobs and company are promising another technological revolution with the launch of its iPhone. Early reviews of the product say it lives up to its hype. If it has one major drawback, it isn't the product itself but the cellular service (AT&T Wireless) that Apple has chosen to partner with.
Some, including Wal Mossberg, personal technology columnist for The Wall Street Journal, pointed out challenges users may have in picking up signals in some markets and he also decried the network the iPhone uses for lacking in internet connection speed.
Still, the iPhone has many admirers.
Chris Hazleton, senior analyst for mobile devices at IDC, told Wired, "It's several generations ahead of the market in terms of input and it will resist aging better than other phones. No phone has been as highly anticipated as this."
Mr. Mossberg called the iPhone "the most beautiful and the most radical smart phone or hand-held computer that I have ever tested..."
The new iPhone will no doubt be pricier than consumers are used to spending to buy a cell phone, although the product is clearly much more than that. The 4GB model will retail for about $500 while an 8GB iPhone will sell for $600. Apple is looking to sell 10 million by the end of 2008.
Parks Associates said the product's pricing could be a major impediment to purchases. Only three percent of consumers it surveyed had a "strong interest" in buying an iPhone along with the two-year contract required by AT&T.
"The underlying drivers for converging music, multimedia, and communications capabilities in a device such as an iPhone are certainly prevalent in today’s market," said Kurt Scherf, analyst with Parks Associates, told The Journal. "However, the high price point may prevent the iPhone from achieving greater adoption over the short term."
Discussion Questions: What will the iPhone mean for consumers and retailers in the short and long terms? What do you see as the biggest challenges the iPhone faces along with the greatest opportunities as the product rolls out?