“Apple Chief Executive Steve Jobs made a big splash by jumping into the wireless communications business with iPhone, a touch-screen device that plays music, surfs the Internet and delivers voice mail and e-mail differently than any other cell phone,” Rachel Konrad reports for The Associated Press.

Konrad reports, “But it remains to be seen whether the $500 gadget and other products announced Tuesday will allow the company to remain a Wall Street darling and sustain the market dominance enjoyed by iPod, Apple’s iconic digital music player. Some industry veterans wonder whether the phone — despite its slim elegance and wide-screen display — is priced competitively.”

MacDailyNews Take: That’s exactly what they said when the first iPod debuted and we all know how that turned out.

Konrad continues, “‘Prospects for the new device are positive, but it is not a given that Apple can win against a slew of wireless providers, phone manufacturers, and Microsoft, all of whom are similarly motivated to raise their flag on the same territory,’ said James L. McQuivey, a communications technology professor at Boston University.”

MacDailyNews Take: And now BU communications technology students know whose class to avoid – unless they’re interested in studying uninformed, delusional thinking firsthand. Microsoft et al. got run over by the Apple steamroller yet again today – that’s not hubris, just simply a statement of fact. One look was all it took. This one’s so easy, even Rob Enderle got it pretty much right.

Konrad continues, “Tim Bajarin, principal analyst with Creative Strategies, said the iPhone appears poised to revolutionize the way cell phones are designed and sold. ‘This goes beyond smartphones and should be given its own category called ‘brilliant’ phones,” he said. ‘Cell phones are on track to become the largest platform for digital music playback, and Apple needed to make this move to help defend their iPod franchise as well as extend it beyond a dedicated music environment.'”

“Initial hopes for the iPhone are relatively modest. The company hopes to sell about 10 million units in 2008, or about 1 percent of the market. About 957 million cellular phones were sold in 2006,” Konrad reports. “But the phones are expected to have a “halo effect,” intimidating competitors and polishing Apple’s reputation as a maker of elegant, easy-to-use gizmos that technophiles pine for. It could even boost sales of Apple’s Macintosh computers.”

Konrad reports, “The phones, which will operate exclusively on AT&T Inc.’s Cingular Wireless network, will start shipping in June. A 4-gigabyte iPhone will cost $499, while an 8-gigabyte model will be $599. Cingular would not provide details of its financial arrangement with Apple. Executives said both companies would make and distribute advertisements for the iPhone in the spring.”

Full article here.

Related articles:
Time: ‘iPhone could crush cell phone market pitilessly beneath the weight of its own superiority’ – January 09, 2007
Cingular to use Synchronoss Technologies’ platform for Apple iPhone – January 09, 2007
Is Apple building ‘The Device?’ [revisited] – January 09, 2007
iPhone photos from Apple’s Macworld Expo booth – January 09, 2007
Enderle: Apple’s iPhone is going to do very well – January 09, 2007
Apple debuts iPhone: touchscreen mobile phone + widescreen iPod + Internet communicator – January 09, 2007

The Register’s Ray: Apple ‘iPhone’ will fail – December 26, 2006
Analyst: Apple iPhone economics aren’t that compelling – December 08, 2006
CNET editor Kanellos: ‘Apple iPhone will largely fail’ – December 07, 2006
Palm CEO laughs off Apple ‘iPhone’ threat – November 20, 2006