Apple Unveils Long-Awaited iPhone

Cingular Exclusive Provider in 'Multiyear Partnership'

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YORK, Pa. ( -- The Apple iPhone, the worst-kept secret in the tech world, was revealed today by Apple CEO Steve Jobs at the company's annual
Analysts said there is a potential huge market for the Apple iPhone introduced today by Apple CEO Steve Jobs.
Analysts said there is a potential huge market for the Apple iPhone introduced today by Apple CEO Steve Jobs. Credit: AP
Macworld confab. The widescreen, touch-sensitive, music-enabled smartphone will bow in June at $499 for the 4 gigabyte version or $599 for the 8GB one. Cingular Wireless will be the exclusive provider in a "multiyear partnership," and the phone will be sold at Apple and Cingular retail outlets.

"Apple chose Cingular because they are the best and most popular carrier in the US," Mr. Jobs said in a news release.

From speculation to fact
The iPhone had been reported for well over a year, first as informed speculation, then rumor, then, in recent days, as fact. Analysts say the market for Apple is promising and potentially huge: According to Solutions Research Group, 16% of Americans older than 12 think an iPod phone is a "great idea" for them. With an iPod phone, Apple could increase the number of Americans 12 and older who own an Apple product from 20% to 30% in just 18 months, according to the study.

The agency handling the device was unknown at press time. "We just don't know yet about agencies, marketing plans, etc.," a Cingular spokesman said. "I am sure all that will be clearer as June approaches and the device is available." Omnicom Group's TBWA/Chiat/Day, Playa del Rey, Calif., is Apple's agency of record, and sibling BBDO, New York, is Cingular's agency of record.

While wireless-phone makers now ship some 1 billion phones annually, the music-phone combination is less proven. The first iPod-sanctioned phone from Motorola, the iTunes Rokr, was an underwhelming less-than-success when it bowed in September 2005; it also featured Cingular as the exclusive provider.

Motorola CEO Ed Zander, who is attending the Consumer Electronics Show in Las Vegas this week, said he had a "great relationship" with Mr. Jobs but is going a separate way.

Established market
Apple's iPhone is entering an already-established market of phones that can store, play and even download music, but it is still a nascent market with plenty of opportunity for Apple to grow.

The iPhone's Wi-Fi connection won't allow users to download music directly to the phone or share it with others, like Microsoft's Zune, but analysts believe Apple is working toward direct downloading via iTunes.

About 23.5 million mobile subscribers, or about one in 10, in the U.S. have phones with integrated music players, according to a recent study by Telephia. Many subscribers reported loading music onto their phones from their computers, Telephia said, but only a small number have actually downloaded music over the air from a wireless-carrier music store. In the third quarter of 2006, only about 8.5% of those with music-capable phones reported they had purchased music via over-the-air downloads.

'Apple could make a huge impact'
"[The] announcement from Apple this week ... could greatly accelerate adoption of music phones and over-the-air purchasing," said Kevin Burden, senior manager of mobile devices for Telephia. "By building on its loyal iPod user base and ability to deliver a seamless music-purchasing experience, Apple could make a huge impact on the market for music phones."

Also during his Macworld speech, Mr. Jobs officially reintroduced the previously shown iTV, now called Apple TV, which can move content from computer to TV for viewing. Mr. Jobs finished his speech by noting that Apple has changed its official company name from Apple Computer to simply Apple Inc.
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