iPhone: One Year Later

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

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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.

The iPhone certainly has its critics, and they emerged on Day One. The initial iPhone-bashing focused on its use of AT&T Inc.'s relatively slow EDGE wireless network, which Apple says it chose because it was so widespread in the U.S. AT&T is promising a faster 3G network upgrade this summer. (Read our blogs: Was the choice of EDGE over 3G for the iPhone genius on Apple's part?.

Some early critics noted that it could take a full minute to download a Web page over EDGE -- much longer than the almost-instant downloads depicted in iPhone TV ads. For the iPhone's Wi-Fi users, though, Internet browsing has generally been much faster.

However, Apple's five-year commitment to lock in the iPhone with AT&T's network flies in the face of the other major trend of the past year in wireless mobility: openness, in both networks and applications.

Google Inc. and the Open Handset Alliance took advantage of concerns about the iPhone being locked in to a single carrier when they introduced their Android software last November. Based on the Linux operating system, it would allow users to work anywhere on any network. Google was also an instigator of a major push to have the Federal Communications Commission's 700-MHz auction include a channel that required the auction- winning carrier to support any device.

Apple ignores such talk and staunchly says its iPhone is allied with AT&T and that's that. But some analysts believe there is wiggle room. "Perhaps some future version of iPhone could be outside AT&T," Gartenberg suggests. But Dulaney differs, saying, "Unlocking from AT&T won't happen."

In contrast, Apple's commitment to openness centers around a multitude of applications, not networks. Its software development kit, announced in March, has attracted the interest of 500,000 developers, and analysts say it could lead to literally hundreds of new applications being distributed to users via Apple's AppStore.

Based on Apple's March announcement, what's officially coming next week in iPhone 2.0 are features designed largely to impress business users, including support for device management functions and Exchange e-mail, an apparent response to concerns that the device didn't support a business-class e-mail system. But there will also be plenty of new consumer-focused applications, including entertainment from start-up i.TV.

Ironically, while the iPhone is making a play for the enterprise, RIM has begun marketing its BlackBerry -- a mainstay among business users -- to consumers with slick TV ads and a new developers conference aimed in part at promoting consumer applications. And RIM is reportedly releasing a touch-screen BlackBerry called Thunder later this year.

Experts predict that future successful wireless devices will need to appeal to both consumers and business users at once, recognizing that there is a true "prosumer." And at least so far, most analysts believe RIM and Windows Mobile devices are more secure.

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