Think of this week as a kind of Digital Duel in technology. The massive Consumer Electronics Show in Las Vegas; and the not-so-massive IDG Macworld Expo in San Francisco that ended up making massive headlines of its own. And for good reason.
"This clearly is a whole different business, a different type of device, and I think this will radically change the mobile device market so they gotta re-think their business," says Gene Munster, an analyst at Piper Jaffray, talking about Apple Computer's long-awaited new iPhone announcement.
Euphoria over the iPhone and its slick, sleek, slim design quickly gave way to sticker shock when Apple CEO Steve Jobs announced the pricetag: $499 for 4 gig model; $599 for the 8-gig. Let the pundit-parade begin: Too expensive, they clamored. Elitist, said others.
But lets' look back: Remember that Apple was an expensive Johnny-come-lately to the world of digital music, and that was nearly 100 million iPods ago!
Five hundred bucks for a piece of hardware in an industry known for giving the device away and making its money on the service might seem like a tough sell, and a snapshot of street reaction might suggest that: "It's definitely more interesting and high-tech than the phone I have now that I spent around 500 for," says one potential customer in the Washington, DC area. "I think it's a good idea, I want one," says her friend. But would they spend $600 for one? "Eeeewwwww," they all laughed. Though one of them was emphatic: "I WOULD!"
More than a billion handsets will be sold globally this year, but only a fraction are so-called "smart phones," with internet access that can download and playback video and music. But momentum in that part of the sector is growing extremely quickly.
"More and more of those people that are buying standard handsets are going to see the capabilities of these and see that there is no compromise anymore in terms of the form factor and usability from a phone perspective," says Ed Colligan, Palm CEO.
And Apple's own CEO Steve Jobs agrees: "Boy is it frustrating. Really frustrating," he told me in an interview when talking about competitors in the sector including Palm, Research in Motion , Nokia and Motorola . "It's a category that needs reinventing, needs to be made more powerful and much easier to use."
But the rest of the industry is asking, "At what price?"