Single carrier: Why does this surprise people? Apple is typically into monogamy. The iPod doesn't support a panoply of music services. It's iTunes all the way. And, when it was time to choose a new CPU maker, Apple chose Intel. It will never court AMD.

Too expensive: The iPhone is not cheap, but it's totally in line with Apple's pricing strategy: premium prices for premium products.

No buttons/keys: The lack of a keyboard will turn off some customers, especially those who grew up with rotary and push-button phones. It will, on the other hand, attract all the young, trendy, flexible, iPod-loving customers that Apple cares about.

Apple doesn't do phones: Some people think the iPhone won't fly because no one wants to buy a phone from Apple. They'd rather have an 80GB, large-screen iPod (no scroll wheel, just a screen). I agree that iPod fans do want this, but I bet they'd also like to carry just one gadget instead of a phone and a music player. Major cell-phone service providers, such as Verizon, must have research to back this up. Otherwise, why would Verizon push V Cast so hard? The problem with phone/music player hybrids isn't that people don't want a do-it-all device. It's that they want a "do-it-all-well" device. Music phones don't fulfill this desire. Downloading music over cell services (even high-speed ones) is a pain. iPod owners do their downloading where it's easiest—at home. So why not have a phone that can hook up to the PC and iTunes, where you can manage your music before you hit the road? I will grant iPhone dismissers one point: 8GB doesn't seem like enough storage. The iPhone should have started at a base of 20GB—even if most people never fill up their regular iPod's storage, perception is reality. As long as 80GB iPods exist, 8GB iPhones will always be regarded as somewhat second-tier.

Despite that nit, and because of everything else I've outlined, the iPhone will ultimately soar, becoming, I think, the most sought-after cell phone on the market. It would, of course, be an automatic and huge best-seller if it didn't cost $500. I wouldn't be surprised if we see a major shift in pricing in time for the holidays—Apple has no interest in playing "Macintosh" with the iPhone and ending up with just 10 percent or less of the cell-phone market.

Even if the price remains unchanged, however, interested consumers will start planning their exits from current carriers (and begin saving their dollars). By the time the holiday season rolls around, and certainly by 2008, consumers will assume that the bugs—if there are any—have been worked out and start making their move.

In very short order, the iPhone will become the ultimate cell-phone status symbol, pushing aside the RAZR and Sidekick. Demand will skyrocket. Apple will help stoke demand by keeping supplies low and teasing us with new features (colors, storage options, and more) that I expect by January. A new pricing strategy should do wonders for sales, too. By this time next year, the iPhone will be a blockbuster success. I guarantee it.

Arrow Is Lance right about the iPhone? Louderback doesn't think so—at all.
Check out what he has to say in his column: Apple's iPhone Will Fly...Then Flounder.

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