The blogosphere, internet, print media, and broadcast media are all abuzz over the "iPhone" announcement on Tuesday by Steve Jobs. I put "iPhone" in quotes as Cisco apparently has decided to aggressively defend their trademark over the use of iPhone. Apple's website now lists it as the "apple" iPhone - using the same apple symbol used in the name of the appleTV. Perhaps, this is the name under which it will be released.
The "iPhone" does appear to be a marvel of technology - part iPod, PDA, and cellular phone. Just look -

The interface is completely touchscreen based (which now explains one to two years of rumors regarding a completely touchscreen based iPod). According to David Pogue, who has spent some time playing with the actual device, streaks only show up when the screen is off, and the screen is quite easy to clean with a simple wipe of cloth. Two separate batteries supply power - one for the phone and the second for the iPod (either 4GB or 8GB which can play video in widescreen mode). Wifi connectivity is included as well. The device runs a pared down version of OS X (albeit a reportedly closed OS). Safari is included as are applications for managing email and contacts. Google maps and widgets round out the added flair. What more could the gadget consumer want? Well, in my opinion, quite a bit more.
While an outstanding basic device, there are several important and significant drawbacks. First, in a word, Cingular. Yes. Cingular only. At least two years of Cingular only. No chance to use other providers in the United States for at least two years. Two years of Cingular only service (1350 minutes for $79.99 per month) and data fees (unlimited data plans listed for $44.99 per month). Apple apparently chose a GSM provider in the US as it apparently intends to enter the European market. There will not be the possibility of purchasing an "iPhone" in the United States without a Cingular contract. This makes one wonder, how much of the $499 (4GB) and $599 (8GB) price Cingular is subsidizing.
Which brings one to price. The $500 - 600 pricepoint is nestled comfortably (for some) between what one would expect to pay for a PDA and a midrange laptop (for example the MacBook). Or between an iPod and a midrange laptop. The question is one of worth - will 1% of the installed cell phone user base potentially change providers, drop their iPod capacity, and shell out at least half a grand plus two years of phone and data service, for the opportunity to use a trick little device with a reportedly closed operating system which may not sync with Outlook, Word, or Excel? Will corporate and business buyers abandon the convenience and interoperability of their Blackberries and Treos?
Mr. Jobs, please consider releasing a parallel line - keep the same form factor, drop the phone, keep the wifi, allow modification and creation of documents, and add a bit more storage. The ultimate apple PDA, perhaps the iNewton, would result. I would be there in a heart beat.