Updated: Apple, Cingular tout iPhone

LAS VEGAS--Apple CEO Steve Jobs formally announced the long-anticipated iPhone at the MacWorld Conference and Expo in San Francisco today, sending reverberations throughout the consumer electronics and mobile industries, most notably here in Las Vegas where the Consumer Electronics Showcase was in full swing. The mobile phone/iPod melding will be available in June through Apple, as well as Cingular Wireless, the computer company’s exclusive U.S. carrier partner, through what the companies described as a multi-year partnership.

The industry has expected an Apple phone keying off the popular iPod for years, and before today’s announcement Jobs made numerous hints about its release, making today’s unveiling almost a foregone but still highly anticipated conclusion. The new iPhone is leagues beyond the failed ROKR device over which Apple collaborated with Motorola. While the ROKR was little more than a revamped candy bar phone with iTunes software preloaded and a 100 song capacity, the iPhone promises to offer most of the same capabilities of Apple’s leading iPod digital music player line, with two models holding 4 GB and 8 GB respectively—enough capacity for thousands of song tracks—and including iPod’s video capabilities.

But Apple appears to have done more than embed full iPod capabilities into a handset. Jobs showcased numerous innovations and features it is introducing on the iPhone that will later be applied to the iPod line. The iPhone has a widescreen format supporting letterbox aspect rations for digital video clips and a touch screen soft keyboard and interface, designed specifically for the finger, not a stylus. Apple is also packing several communications-based applications into the phones, including a visual voicemail feature, an onboard e-mail client with free push e-mail services from Yahoo, a mobile version of its Safari Browse, a 2-megapixel camera and photo management software. The iPhone even supports advanced proximity and light sensors as well as accelerometer, which determines whether the user is holding the phone in its normal upright position or lengthwise, adjusting the angle of the display interface accordingly.

One thing the iPhone is unlikely to support, however, is a mobile music download service. Despite the advanced capabilities and the $500-plus price tag, the iPhone only has GSM/EDGE and Wi-Fi connectivity, making it optimal for synching the phone to a PC just like its iPod counterpart, but poor at downloading a multi-megabyte song file from the cellular network. Apple has been reluctant in the past to support any other file download capability that doesn’t require direct synchronization to its iTunes software on a PC or Mac, and it appears that it won’t be starting with the iPhone. Carriers like Sprint and Verizon Wireless have launched their own 3G music download services, branded under their own names. It’s no coincidence that Cingular was named the first iPhone carrier. Not only did Cingular first partner with Apple and Motorola to sell the ROKR, its own music platform is a framework that allows third parties like Yahoo and Napster to distribute the music itself. Cingular as of yet doesn’t support a direct over-the-air download service, which also fits into Apple’s strategy.

Though the iPhone is sure to make an impact on the mobile community, it might have trouble finding sales channels. Apple has not indicated if it will release a CDMA version of the device when it debuts in June, but if it does, Sprint and Verizon Wireless may be reluctant to carry it since it would directly compete with their own digital music services. Cingular and T-Mobile, both GSM carriers, are the likely sales channels in the U.S., and while it may draw glares from European and Asian operators delving into new music services, the more open direct sales channels in those regions will allow Apple to sell the phone directly to consumers.

Cingular also had exclusive carrier distribution rights to the iTunes-enabled Motorola ROKR, the much-criticized device that was Apple’s first direct foray into mobile phone/iPod convergence. "Apple chose Cingular because they are the best and most popular carrier in the US," Jobs said.

The iPhone partnership goes beyond distribution, however, as Apple and Cingular said in a statement that they are working together to provide new features, such as the iPhone's Visual Voicemail. The iPhone also was developed more according to a mobile smartphone design and operating sensibility than Apple’s iPod.

“The decision to design the iPhone with a smartphone orientation was a very wise, yet unexpected move that puts Apple squarely against Microsoft and the Nokia N-series,” said John Jackson, vice president and senior analyst at M:Metrics, in an initial e-mail note reviewing the device. “Whereas the expected profusion of music-centric devices would dilute the value of an iPod-like phone, the demand for smartphones is steadily growing, and now Mac enthusiasts can finally get their hands on the seminal Apple mobile device.”

The iPhone will be available in the U.S. beginning in June in a 4GB model for $499 and an 8GB model for $599, and will work in combination with Apple's iTunes running on either a PC or Mac.

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