iPhone- Overcoming the Carrier Barrier (Forbes.com)

Has Apple made a serious miscalculation charging $499-599 for a device that must be used on Cingular? According to the above article, the industry wide average cost to cancel an existing carrier contract is $179. On top of that, how many people have an existing iPod or PDA that doesn't quite need replacing? What about concerns over an easily scratched touch screen (as was the problem with earlier iPod generations) and poor battery life? Steve Jobs is a master of marketing (ie: the sizzle), but one has to wonder how this will play out (the steak).

On top of all these concerns, the company is ratcheting down more restrictions in regard to DRM (Digital Rights Management). This NYT article has a lot more detail on the matter.

An excerpt:

Here is how FairPlay works: When you buy songs at the iTunes Music Store, you can play them on one — and only one — line of portable player, the iPod. And when you buy an iPod, you can play copy-protected songs bought from one — and only one — online music store, the iTunes Music Store.

The only legal way around this built-in limitation is to strip out the copy protection by burning a CD with the tracks, then uploading the music back to the computer. If you’re willing to go to that trouble, you can play the music where and how you choose — the equivalent to rights that would have been granted automatically at the cash register if you had bought the same music on a CD in the first place.

So, to summarize the problems facing iPhone- consumers are being asked to do the following in exchange for this beautiful new piece of equipment:

1. Sign up with another carrier
2. Pay a price that is around 5 times the cost of a new cellphone with contract
3. Toss out their old PDA/iPod
4. Subject yourself to lackluster battery life and all of the bugs and design oversights that come with buying a v1 product
5. Subject yourself to overbearing DRM restrictions

Perhaps the truly Mac faithful will be happy to swallow this pill, but I have some serious doubts that the company will make their ridiculously high sales projections (29 million before September 2007, says one analyst) for the v1 device.