But it's still over-hyped
After Apple and AT&T reported quarterly earnings this week, the truth about the iPhone has started to leak out. On Tuesday, AT&T revealed that only 156,000 phones were sold the first weekend, far less than the 500,000 to 1,000,000 that had been "forecasted" by the usual crowd of Apple groupies.
More importantly, they let slip the fact that another version of the iPhone is expected before Christmas! This is serious because one iPhone cannot be upgraded to another, newer model. It's already affecting in-store sales, which have been slumping steadily. Inventories are flush at many stores, and you'll see price cuts or other promotions before long.
In the meantime, users are finding out the severe weaknesses of the AT&T "Edge" network, which is a pathetic dial-up contraption. The only way anyone actually uses their iPhone now is with a connection to a local wireless network. But the new model will provide a high-speed connection; you just have to shell out another $500 for it.
Now for the good news: the damn thing is pretty slick. Everybody likes its ergonomics, it has a nice high-quality feel, although a bit heavy, and it's only real weakness is its lack of connectivity. Once that gets sorted out, the iPhone will take off, I'm sure. It's simply a matter of when its competitors begin arriving, and how aggressive their pricing will be. I predict that the new, 3G iPhone will be the hit product of the Christmas season.
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