iPhone: One year later

Apple's splash into the mobile phone market proved consumers will pay for hip devices. Now the race is on to one-up the iPhone.

What a difference a year makes. This month, the hip iPhone celebrates its first anniversary, following its riotous US launch last June 29. Its birth followed six months of prerelease hype that was ignited by Apple CEO and industry luminary Steve Jobs.

The company that brought you the Macintosh computer, and the fabulously successful iPod and iTunes, has jumped -- well, dive-bombed, really -- into the wireless phone business like no mobile phone vendor before.

Consider that more than 1 billion mobile phones were sold globally in 2007, with thousands of models introduced. But the model that had everyone's attention for much of the year sold just 5.4 million units through March 2008, according to Apple. The company predicts that it will sell 10 million devices this year, partly because of innovations in the iPhone 2.0 version due this month.

No mobile phone, nor arguably any electronic device, has ever generated so much interest so quickly.

"Few companies have managed to penetrate such buyer mind share with a single device in a year's time," says Michael Gartenberg, a JupiterResearch analyst and a columnist. "What's significant is how iPhone's impact has been far greater than the numbers sold."

Among smart-phone devices (which basically combine computer and phone functions), the iPhone ranks second to Research In Motion's BlackBerry in terms of US shipments, according to several analysts. However, Microsoft challenges this claim, saying that the Windows Mobile operating system, on 140 handsets from four manufacturers, leads the way. But the way that market leaders talk about the iPhone -- and the way other vendors shamelessly imitate its touch screen, sleek design and pocket size -- is testimony to its dominance.

Gartner analyst Ken Dulaney, who was initially a harsh critic of the iPhone because of security worries for IT shops, says that Apple's device and the BlackBerry are the biggest innovations in all of communications and computing over the past decade.

"The iPhone's biggest impact has been to redefine 'easy to use' in the mobile phone industry," Dulaney says. In sum, the iPhone has capitalized on the biggest trends in computing: It has a small form factor, it works wirelessly for ubiquitous mobile usage, and it unifies

And, equally important, it's cool.

Fashion Forward

The iPhone builds on a trend among mobile phone and gadget makers to hire product fashion designers to help in the creative process. Yes, fashion matters, even to geeks. "It seems strange to say there's a coolness factor with iPhone, but it does involve extraordinary attention to details in hardware and software," Gartenberg notes. "It doesn't feel like any other phone."

Much of the market frenzy for the iPhone comes down to ease of use, but there are other factors. Among them are its sizable touch screen, its accelerometer (which allows images to rotate as the device rotates), its hip design and quality construction (featuring only metal and glass), its snappy Safari browser and its reliance on the solid Mac OS X operating system.

"It's not one feature, but the aggregate of many features that has attracted people, and Apple has spent a lot of time marketing each one of the innovations separately," Gartenberg says.

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Matt Hamblen

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