Apple's New Phone Could Be Category Killer, Spur Ads

The rumors were true. Steve Jobs did unveil the much-anticipated Apple iPhone at the Macworld Conference and Expo in San Francisco yesterday. It is slim, stylish, sleek, comes in two versions (4 GB for $499, 8 GB for $599), has iTunes and Web surfing capability, will operate on the OS X platform, and will be available exclusively on the Cingular wireless network.

It will not, however, be available until June in the U.S., and whether Apple will be able to go ahead with the iPhone name depends on their coming to legal terms with Cisco Systems, which owns the iPhone name.

But these facts did little to quell Jobs' exuberance about iPhone's potential to help Apple own the cell phone market, just as iPod has helped it own the portable music market. The company is predicting it will sell 10 million iPhones in 2008, giving it a 1% share of the global handset market.

The robust capability of the iPhone, which exceeded even the most devoted Apple speculators' expectations, gives it a real chance at being a category killer and giving a lift to mobile advertising with its 3.5-inch screen.



Combining the functionality of a cell phone, iPod, smartphone and portable Web browser, Apple has partnered with Yahoo and Google to incorporate their search engines and email. Jobs described it as a way to provide the ultimate in best-in-class applications for iPhone users and allowing the companies to merge without merging.

Jobs emphasized the phone will employ an easier-to-use navigational structure that takes advantage of a person's 10 full fingers.

The phone could well revolutionize the nascent mobile advertising field, marketing executives said Tuesday.

"A killer app, overnight, can change what happens," said Isobar's Gene Keenan, vice president of mobile services. The iPhone, he added, with its ability to display high-quality video, could easily be such an app. "Apple has definitely sparked a revolution with this phone."

The wide screen of the new Wi-Fi-enabled device also offers new promise for wireless video ads.

Apple also formally announced its previously announced plans to enter the interactive television business. The company unveiled appletv, which allows consumers to play back downloaded content from the Internet to their TV sets to a 40 GB hard drive priced at $299. The product is ready to ship in February.

To reflect its overall strategic shift toward consumer electronics, Jobs announced that the company will change its name from Apple Computer Inc. to Apple Inc.

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