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Thu 18 Jan 2007 05:38 PM

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Has Jobs taken too big a bite out of the apple?

As the dust settles on Apple’s announcement last week, questions are starting to be asked as to whether the iPhone will live up to the hype.

When Apple CEO Steve Jobs unveiled his company's latest device, the long-awaited iPhone, at last week's Macworld event in San Francisco, US, he made it plain just how important he felt the device would be.

"Every once in a while a revolutionary product comes along that changes everything," he told the Mac faithful. "It's very fortunate if you can work on just one of these in your career. The iPod changed everything in 2001. And we're going to do it again with the iPhone in 2007."

The product in question is a combination device featuring the music and video capabilities of Apple's iPod with voice and data capabilities. Central to that claim of changing everything is the new user interface for the iPhone, Multi-touch, which allows users to navigate device functions using their fingertips. Jobs said the technology doesn't require a stylus, can ignore unintentional touches and is better suited for mobile phones than the current trend toward Qwerty keyboards on smartphones.

The iPhone would allow users to create true "desktop-class" applications, Jobs told delegates. "Software on mobile phones is like ‘‘baby software" - it's not that powerful,' he said. "Our software is at least five years ahead of rival offerings. iPhone features Mac OS X, which enables us to create desktop class applications and networking technologies - not the ‘crippled' stuff you find on other mobile phones."

Initial reaction to the iPhone was extremely positive - rival device makers Palm and Research in Motion (RIM) both saw their share prices fall last week, over fears that the iPhone would take away sales from their Treo and BlackBerry devices.

However, this week that enthusiasm has been replaced with a little more scepticism, as analysts question just how many people are actually going to buy into the iPhone experience - at least for the business market.

For one thing, the mooted US$500 to US$600 price tag is expensive even for a high-end device - BlackBerry devices start from as low as US$200. Considering a large part of that cost is for the iPod features, it seems tougher to see businesses willing to shell out that cash to, say, equip their mobile sales force with an iPhone each.

For another, Apple has very limited experience of the mobile phone market - a market with volume sales of a billion units a year. Its previous foray into that market - working with Motorola in 2005 to deliver an iTunes-enabled device, the ROKR - did not go well.

And while Jobs may claim that the iPhone's software is going to be years ahead of the competition, he has also gone on record as saying that Apple will control just what software can go on it. While both the Treo and BlackBerry devices allow third-party applications to be installed on them, only applications that Apple approves will go on the iPhone. So forget about allowing your sales team to access the CRM system, at least for now.

Add in the fact that the iPhone is far from being ready - it won't be launched in the US until June at the earliest - and initial specs on features such as battery life are fairly unpromising, and it is clear that the iPhone isn't going to change everything overnight.

"The iPhone will force competing device makers like Motorola to play catch-up and operators to search for a response, but the iPhone will not substantially alter the fundamental structure and challenges of the mobile industry," said Charles Golvin, an analyst at Forrester Research last week.

Jobs knows that he has his work cut out if he is going to make his bold words come even partially true - but he also knows that he has got everybody's attention right now.

iPhone specs:

• 4/8Gbytes of storage

• Weighs 4.8 ounces

• Is 4.5 x 2.4 x 0.46 inches in size

• Has 16-hour battery life for music; five hours for everything else

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