The iPhone's Competition

The iPhone has gotten a lot of attention in the press, but other phone models already have similar features. Numerous smartphones have a built-in Opera Web browser designed for mobile devices. Although most other phones don't have completely virtual controls, some, like the Helio Ocean, have multiple physical keyboards. You can slide the front portion of the Ocean vertically to access a number pad or horizontally to access a QWERTY keyboard. The orientation of the images on the screen changes depending on which keyboard you are using. Other phones, like the LG Prada and the HTC Touch phone, use touch-screens and virtual controls much the way the iPhone does.

Image courtesy © 2007 LG Electronics LG Prada

Some smartphones also have features that an iPhone doesn't. Some have third-generation (3G) cellular phone capability, which allows significantly faster data transfer rates. The iPhone lacks this capability. Many smartphones and other handheld devices can also run third-party applications, some of which have very specialized functions, but Apple allows only approved applications that work within the Safari browser. In addition, some smartphones can run a range of instant-messaging (IM) clients. With the iPhone, you can send and receive text messages using an iChat-like interface, but there's no real IM client. Finally, the complete absence of a physical keyboard, which Apple has touted as essential to the phone's usability, may prove to be a challenge for some users.

The HTC Touch Image courtesy ­© 2007 High Tech Computer Corp.

With all this in mind, it may seem unclear whether the iPhone's features outweigh its cost. At its introduction, the iPhone's price was $499 for 4 GB of storage space and $599 for 8 GB. In September 2007, Apple announced that it was lowering the price of the 8 GB model to $399 and that it would continue to sell the 4-GB model while supplies lasted.

Even with the price drop, the iPhone is still more expensive than many, but not all, other smartphones. Apple's argument is that the iPhone acts like three distinctly separate devices -- a phone, an iPod and an Internet access device -- which would cost at least $499 if purchased separately. The iPhone also requires a two-year contract with AT&T, formerly known as Cingular. Unless you hack your iPhone and unlock it, it won't work at all without the AT&T plan.

The iPhone hit the market on June 29, 2007 in the United States. In the days after the release, users and reviewers criticized some of the iPhone's features, including slow browsing speeds and difficulty using the virtual keyboard. Customers reported difficulties with the lengthy activation process and itemized paper billing statements that were hundreds of pages long. Consumer-rights advocates also criticized the cost of the iPhone's battery replacement program. Early iPhone adopters were also angry at the dramatic price increase -- Apple responded by offering a $100 store credit [source: Apple]. In spite of all these difficulties, Apple sold its millionth iPhone in September 2007.

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