Apple finally answers call for iPhone

In one of the most anticipated gadget announcements in recent years, Apple at Macworld on Tuesday introduced the iPhone, a mobile device that chief executive Steve Jobs promised will reinvent the phone.

The Mac OS X-based iPhone is most akin to an iPod in design, but allows users to listen to music, make phone calls, send text messages and email, surf the Web and take and upload photos, all using a wide touchscreen and a single button. Apple plans to make the device available in June in the US, and it is scheduled to arrive in Europe by the end of the year. The 4GB model will be sold in the US for $499 (£258) with a two-year service contract, and an 8GB model with the same contract for $599 (£310). UK pricing has not yet been released.

The iPhone was announced during a two-hour keynote in which Jobs also announced the expected Apple TV, previously known by its code name 'iTV', as well as a name change for the company.

He surprised many by continuing to refer to the new mobile device as the iPhone, a trademark that is owned by Cisco Systems. Apple has apparently been in discussions with Cisco over use of the iPhone trademark for some time, but it is unclear what Apple's use of the name will mean for either company.

In a written response to an inquiry from CNET.co.uk's sister site, News.com, made while Jobs' speech was still going on, a Cisco representative said, "It is our belief that with their announcement today, Apple intends to agree to the final document and public statements that were distributed to them last night." Cisco expects to receive a signed agreement on Tuesday, according to the statement.

The device is just 11.6mm thick and has controls on its side. It incorporates a wide, 160-pixel-per-inch touchscreen, a single 'home' button, 2-megapixel camera, Wi-Fi capability and a mobile phone. The phone automatically switches to Wi-Fi if it detects a signal.

The iPhone also comes loaded with Apple's Safari Web browser and fully incorporates Google's search and mapping services. Users can make phone calls directly from Google Maps.

True to form, the company did not fail to consider consumers' habits with the product's design. A proximity sensor senses when the phone is brought to a user's face and automatically turns off what music might be playing and turns on the phone. An 'accelerometer' switches the screen from a portrait to landscape format, allowing for easy toggling between the device's various functions.

The iPhone even reconsiders how consumers listen to voicemail.

"Wouldn't it be great if you had six voicemails, and you didn't have to listen to five first before listening to the sixth?" Jobs said in his keynote.

Now users can skip right to the message they want. The iPhone allows people to see all unheard voicemails and select which one to listen to using a technology Jobs called visual voicemail, which Apple developed in the US with Cingular.

Sticking points
But Apple's iPhone isn't cheap, said Samir Bhavnani, an analyst with Current Analysis, however, "it's a great first step" towards getting Apple established as a mobile-phone company.

While the price tag might be out of range for many teenagers and their parents, Apple loyalists will probably be interested in the new iPhone, even though Apple has no phone expertise, said Chris Crotty, a consumer electronics analyst at iSuppli.

"Apple has strong brands, and there is a perception that they are an innovator and that they make products that are easy to use," he said.

With companies expected to sell more than 1 billion mobile phones and more than 200 million portable media players this year, Apple was wise to enter the market, according to Crotty.

"Apple had to make a move like this because their iPod business is under threat more and more from music-capable phones," he said. "So, Apple could lose sales to competitors or lose sales to themselves."

It was unclear what effect the iPhone would have on the market share of existing mobile and handheld providers. Asked to comment on the Apple announcement, Motorola spokesman Alan Buddendeck said: "There's really nothing to say because the [Apple] phone is not out yet."