“Apple has finally announced its long-rumored iPhone. True to the Apple ‘i’ tradition, the iPhone is filled with features and touts an innovative interface more akin to a kiosk or video game than a telephone… Can it succeed? Frankly, and contrary to the reactions of Apple fans and the stock market, I am pretty skeptical. I don’t think this device will meet the fantastic predictions I have been reading. For starters, while Apple basically established the market for portable music players, the phone market is already established, with a number of major brands. Can Apple remake the phone market in its image? Success is far from guaranteed,” Jack Gold, founder and principal analyst at J.Gold Associates, writes for Computerworld.

Gold writes, “Why am I not impressed? First, making an entertainment device is much different from making a phone. Over the years, plenty of phones offering lots of nice ‘toys’ for users have disappointed. Ultimately, they were not very good phones. And the bottom line is that you have to build a good phone first, and then add features on top of that.”

Gold writes, “Another difference between phones and entertainment devices is that phones must be much more rugged and less prone to breakage while being subjected to all kinds of abuse. Can the iPhone take such abuse without a high failure rate?”

Gold writes, “The price is steep. Yes, I understand that the astronomical list prices of $500 and $600 are simply initial inflations meant for the early adopters willing to pay almost anything (and to limit volumes while Apple ramps up to catch up to demand). But even if the prices were cut in half, that is hefty for a phone device these days, even one with loads of features.”

Gold writes, “Who is the target for this device? At $300 to $400 (assuming the price falls rapidly), an iPhone clearly is not a casual buy. In the past, most high-end phones have been sold to business users willing to pay for a fancy phone with the capabilities they wanted. But these users almost universally demand connectivity to corporate systems, especially through push e-mail and Outlook integration. How well the iPhone does at integrating to these systems remains to be tested. And although I would bet the iPhone will integrate and sync well with the Mac, very few businesses run on Macs.”

Gold writes, “The device runs the Mac OS. This is a major constraint, since few third-party application vendors (e.g., Good Technologies for a push e-mail client) run on the Mac… Apple will likely have a tough time convincing application vendors to build specialized clients for the iPhone until the volumes are there, and the volumes could be limited by the lack of third-party applications – a Catch 22.”

Gold writes, “So, will the iPhone succeed? At some level, yes, given the cachet that the Apple brand carries and the company’s base of loyal fans. But Apple has a lot of questions to answer… My advice: Unless you are a die-hard Apple fan, wait a few months to see how this all shakes out, especially if you want to employ the device as an adjunct to your business. Find out how good a phone it really is and how well it connects to the world you live and work in before spending the high price for what could ultimately become an orphaned, stand-alone music player.”

Full article here.

[Thanks to MacDailyNews Reader “King Mel” for the heads up.]
Has Mr. Gold even watched Steve Jobs’ keynote and seen the iPhone demonstrated? Ultimately, Mr. Gold’s advice to “wait a few months to see how this all shakes out” coupled with his threat that Apple’s iPhone “could ultimately become an orphaned, stand-alone music player” just doesn’t smack of FUD, it is the very definition of FUD.

Related article:
The massive FUD campaign against Apple’s iPhone ramps up – January 10, 2007