iPhone faces uncertain market

Apple's iPhone could be a hit in the high-end phone market, but the device that stunned Macworld Expo attendees is likely to have a narrow market.

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Apple's iPhone could be a hit in the high-end phone market, but the device that stunned Macworld Expo attendees is likely to have a narrow market.

The device is really more a handheld computer than a phone, running Apple's Mac OS X and features Wi-Fi and 4GB or 8GB of storage. Along with voice and email capability, the device functions as an iPod. But it's stratospheric pricing in comparison to other mobiles available today on the market – starting at $499 (£257) for the 4Gb version with a required two-year contract with its US operator Cingular, which is owned by AT&T. It's scheduled to ship in the US in June, Europe later this year and Asia next year.

Mobile analysts said Apple is way ahead of competitors in putting so much in one slim device, but some questioned how big an impact it may have.

"I don't think any of the existing phone companies could have come up with this," said David Chamberlain mobile analyst for communications researcher, InStat. "I think it will set the standard for a lot of consumer electronics for a long time.", the phone won't do that by suddenly showing up in everyone's pocket, he said.

But according to an InStat survey taken in the US in July, out of 1,800 consumers surveyed, only 21 had spent more than $400 for a mobile phone, he said. Ovum analyst Roger Entner pointed out the picture is a bit different in Europe, where consumers are used to spending much more on handhelds.

Analysts agree that the market for high-end smart phones is relatively small and Apple's price is higher than average, even in those rarefied circles. What's more, enterprises aren't likely to foot the cost of the entertainment-oriented iPhones.

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