More Sampling of Analyst Opinions of Apple iPhone

January 9, 2007, 11:59 PM by Scott M. Fulton, III

Scott Fulton, BetaNews: Sharon Fisher has been gauging reaction all day to the iPhone news. Sharon, what have you found out?

Sharon Fisher, BetaNews Senior CES Analyst: Scott, the analysts I found are saying the real innovation in the iPhone is the user interface.

Michael McGuire, analyst, Gartner Research: From being able to e-mail a photo from your iPhoto library to somebody while talking to somebody else (all in the same session), to perhaps the easiest method for creating a con-call on the fly (in my experience), the Apple team's deep experience in building elegantly simple interfaces to solve relatively complex tasks is evident. These are the sorts of innovations that are going to be tougher for others to recreate or copy.

Sharon Fisher: Wall Street seemed to agree; while Apple stock went up 8.3%, competitors dropped. Nokia fell by 22 cents; Motorola, which issued an earnings warning last week, dropped by 12 cents. Research in Motion, which makes the Blackberry, fell by 6.6%, while Palm, which makes the Treo, dropped 2.4%. And most likely to be affected by the iPhone are high-end phone manufacturers, analysts said.

Rob Enderle, an analyst with The Enderle Group, told Marketwatch that one of the drivers for the iPhone was iTunes itself – that once people have settled on a music provider, they don't want to change and have to redo all their music. He also said people have been holding on to their phones rather than refreshing them with new models, and that the iPhone might change that – specifically mentioning Motorola as a company that could be hurt.

One competitor that came in for a lot of derision by the Apple faithful is Microsoft's Zune. Yesterday, before the iPhone was formally announced, Microsoft entertainment division president Robbie Bach told Reuters that it could be just another iPod trying to be a phone.

While most of the industry was still being dazzled, some questions and potential issues were coming up, including how durable its touchscreen would be; why the battery couldn't be removed; its lack of 3G support; and the exclusive contract with Cingular and how much control Cingular will maintain over the phone and its services.

McGuire sees the iPhone's biggest downside being its price and that it won't appeal to everyone.

Michael McGuire: Those who have been looking for a smartphone that doubles as a stellar media device are definitely going to be giving this product a serious look.

Scott Fulton: Okay, Sharon, Mike McGuire says this device won't appeal to everyone. Describe for me, if you can, the person who is considering a smart phone, and who will look at this iPhone and say, "Phooey! Yuck! Nasty!"

Sharon Fisher: People who are invested in their non-Cingular carrier, for one. People who can't afford a $400-$600 phone, for another. People with fat fingers and others who don't like the notion of the touch screen.

Scott Fulton: Well, I'm a Verizon customer at the moment, locked in for a little while.

Sharon Fisher: Right. and I'm a Tmobile user.

Scott Fulton: And I don't want to blow $600 on a premium device right now. Still, I think I want one of these - it appeals to me.

Sharon Fisher: I know! I don't even use MP3s for music and I want to play with one! That's Apple's, and Steve Jobs', genius. They make stuff that people want to play with.

Scott Fulton: Thanks for looking into it, Sharon.