- The Washington Times - Thursday, June 28, 2007

David Chamberlain knows what it feels like to be under Apple’s spell. He experienced it firsthand when he was introduced to an IPod Nano.

“I didn’t know I wanted it,” said the analyst with In-Stat, a research firm in Scottsdale, Ariz. “I saw this little tiny Nano and this great high-resolution screen with pictures. And then I picked that thing up and held it and used it. I had to have it.”

Apple Inc. is set to release its much-anticipated IPhone tomorrow, the latest “must-have” in the company’s line of “cool” consumer-technology products. The phone — also a music player, camera and wireless Web device — is expectedto sell out initially, despite its heftyprice tag of $499 to $599.

IPhone enthusiasts got in line earlier this week at the Apple Store on Fifth Avenue in New York. Message-board posters on the Washington-area’s Craigslist are offering to “line-sit” in return for payments of up to $200.

“There’s a huge amount of interest from buzz,” Mr. Chamberlain said. “They could ask double that initially, and they’d still sell every one that they had in stores.”

Apple stores will close tomorrow at 2 p.m.to prepare for the IPhone’s premiere and will reopen at 6 p.m. The phones will also be sold through Apple’s Web site and atAT&T; stores, which will follow a similar closing procedure but will stay open until 10 p.m.

AT&T; has hired 2,000 temporary store workers to deal with the demand for the phone. Attempts to reach Apple spokesmen were unsuccessful.

Apple executives have a goal of selling 10 million phones by the end of 2008, about 1 percent of total handset sales worldwide. But the phone’s high price and some drawbacks could end up disappointing buyers, especially with such loftyexpectations already set. For example, analysts say the battery life is too short.

Only 9 percent of all mobile-phone subscribers in the U.S. showed “strong interest” in buying an IPhone, according a survey from M:Metrics, a wireless-research firm. And 67 percent of those who are most inclined to buy an IPhone are not AT&T; subscribers, which has a five-year exclusive contract with Apple, according to the survey.

“It runs the risk of being a little less than all that emotional investment that we put into it, said Shiv Bakhshi, director of mobility research at IDC, a research firm based in Framingham, Mass. “So when it gets so hyped and so popular, there’s always the fear of the letdown.”

Still, the phone could excel, Mr. Bakhshi said. Initially, the phone will have limited appeal — mostly to early adopters and status-seekers — because of its price.

Mr. Chamberlain expects thatevery shipped IPhone in the first two weeks, maybe a month, will be sold. But he doesn’t expect competitors to be hurt by the gadget.

In the larger scheme, the IPhone is just another phone, Mr. Bakhshi said. Its planned sales for the end of 2008 are a small portion of the handset market.

“It’s only 10 million out of 1 billion, which is essentially a rounding error,” he said. “But it could force other vendors to experiment with design.”

Apple’s competitors have been pushing their products and introducing new technologies this week in an effort to beat back the Apple hype.

Apple is known for its innovation, particularly with the IPod. The music player blew past MP3 players before it, and in April, Apple announced the sale of its 100 millionth IPod. Apple’s ITunes digital-music store has become the third-largest music retailer in the U.S., with 10 percent of the market, according to the NPD Group, a research company in Port Washington, N.Y.

The IPhone, which does not have a keyboard, unlike many of its competitors, uses a touch-screen design that will let users type on a virtual keyboard and visually scroll through voicemail messages, an innovative feature.

Calling plans for the device, based on a two-year service agreement, start at $59.99 for 450 minutes.

“All of these things on one device, and you’re slipping it into your shirt pocket,” said Joe Farren, director of public affairs for CTIA, a nonprofit organization for the wireless-communications industry. “That is powerful.”

What really separates the IPhone from other smart phones is its design and “cool” status, Mr. Chamberlain said.

“The big question that I keep asking is: Why is it a phone?” he said. “That’s the answer I don’t have yet.”

After the initial buzz fades, there will be plenty of phones, said AT&T; spokesman Michael Coe.

And complaints.

While it will take about a month to see the problems, Mr. Chamberlain said, IPhone’sbattery life, about eight hours for calls, will likely be one of them. Web access on the IPhone, which uses AT&T;’s mobile data network, is also slower than a 3-G network.

Customers will also have to get used to a virtual keyboard, instead of the keypads found on current smart phones. The IPhone’s incompatibility with corporate e-mail systems will present problems for business customers, Mr. Chamberlain said.

But those problems won’t keep consumers from buying the phone. He points out that his son is on his third IPod in three years.

“People who are using these things are extremely forgiving,” Mr. Chamberlain said. “People give Apple a break that they wouldn’t give to any other consumer-products company.”

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