Apple Bulls and Bears Take Sides
Even those skeptical of the first-generation iPhone think it should do well once the kinks are ironed out. "The Generation 2 or 3 device will probably be a big hit," says analyst Rob Enderle, who has nonetheless dubbed the first-generation product the "Paris Hilton of cellphones–long on hype, short on substance, and (at $500 a pop) she can afford it."
Enderle's biggest concern with the first-generation iPhone is Apple's decision to forgo a keypad in favor of a touch-screen, which he says will make E-mail and text messaging far more cumbersome than with competing smart phones like Blackberry's new 8300 Curve. Moreover, the touch-screen's glass panel–while more scratch-resistant than competitors' plastic screens–means that "if you drop this thing from 2 feet, you'll have shattered glass all over the floor," Enderle says.
That, of course, can't happen until customers get their hands on it. And with about 19 million of them already interested in buying an iPhone sight unseen, according to market researcher M:Metrics, initial demand may be enough to ensure that Apple meets its goal of selling 1 million by year's end.
Enderle expects Apple to roll out its next-generation iPhone by then and another one soon afterward. "They'll work out the bugs and get this right by the beginning of next year," he says.
In the meantime, the likelihood that the first-generation iPhone won't match the hype means investors in Apple's stock may soon have a buying opportunity.
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