iPhone Arrives Today

Jun 29, 11:15 AM

Current Headlines: By Richard Mullins, Tampa Tribune, Fla.

Jun. 29--Caledonia Guzzi expects to suffer a good long while for an Apple iPhone.

She parked herself on the hot sidewalk outside an AT&T store in South Tampa at 9 a.m. Thursday to make sure she got one of the first Apple iPhones that go on sale 6 p.m. today.

Too bad the phone isn't for her.

"My sister's boyfriend got me to do this for him, how sad is that?" Guzzi said. "But that's OK. I do this a lot -- wait out in lines: the Playstation 3, XBox 360, Playstation 2. I've sat out for all of them."

Such is the marketing horsepower of Apple that a growing crowd of people across the country are willing to sleep on sidewalks for a new kind of cell phone.

Yes, there is a lot of iPhone hype -- with some analysts saying it's the greatest product launch they've ever seen. And for that, business schools for years will teach the iPhone as a "Hype 101" case study in how to conjure a frenzy among consumers, Wall Street analysts, and yes, newspapers too.

And the most important lesson from Apple CEO Steve Jobs may be this: Like high school prom night, anticipation can be just as exciting as the actual event, if not more.

"Apple has managed to create this certain mystery about the brand, and no one can underestimate the fact that Steve Jobs has launched some truly revolutionary products," said Michael Cai, an analyst with the research firm Parks Associates.

Helped by some early positive reviews, Cai expects Apple to sell out of between 1 million and 2 million iPhones almost immediately, largely due to the rabid expectations built up by Apple's extraordinary publicity.

So how did Apple create this iPhone frenzy?

First, Apple has a habit of doing something few companies can master. 1) Take a difficult and geeky process (such as downloading music) and make it very simple, 2) Market it brilliantly to the mainstream customer, 3) Take the credit, and the profits.

Apple did this with the Macintosh computer in the 1980s, which all but created the market for "personal" computers when PCs were something companies used. Then Apple created the iPod, and sold more than 100 million, making the iPod the gold standard for music fans worldwide. Any company that can do that bears taking seriously.

Combine people's love for music with their addiction to talking on cell phones, add the Internet, and those are three powerful consumer passions. Then set in motion some careful marketing stagecraft.

It began in January at the Macworld trade show, when Jobs coyly slipped an iPhone from his jeans like a high-schooler showing off a good fake ID. The gadget seemed almost magical -- it could surf the Web with a real browser, not the clunky, ad hoc versions on other smart phones -- play music, videos and make calls. And it used no buttons -- just a touch screen that looked truly out of the future.

Then Jobs tucked the phone back in his pocket away from view, and flashed a grin.

Apple released no prices, no details at all. Just maddening silence. That left everyone to fill in the blanks with wild dreams of wonder. Technology blogs all but hyperventilated with speculation, and chased every iPhone rumor.

Whenever the buzz cooled, Apple threw some gasoline on the fire. When blogs speculated the iPhone battery life wouldn't last an hour, Apple waited for months before releasing news that, no, the battery would last hours and hours. Apple's stock jumped.

When buzz cooled again this summer, Apple released news that the government gave the device a prosaic regulatory approval. Again, Apple stock leapt skyward. Then Apple said the iPhone could run YouTube, then it said the screen would be scratch resistant.

The tactic worked. Over the past six months, stock in Apple has jumped from $80 per share to $120.

Does the actual iPhone stand up to the hype? Possibly so. It has already won the praise of two highly influential gadget reviewers.

After a brief trial run, David Pogue of The New York Times called the iPhone "the most sophisticated, outlook-changing piece of electronics to come along in years. It does so many things so well, and so pleasurably, that you tend to forgive its foibles."

Walter Mossberg of The Wall Street Journal said, "Our verdict is that, despite some flaws and feature omissions, the iPhone is, on balance, a beautiful and breakthrough handheld computer."

Among drawbacks they (and others) note: It doesn't synch easily with many corporate e-mail systems. It works only on the cellular network of AT&T and Cingular (now merged) and so, may not offer good coverage everywhere. And while using data links, it operates on AT&T's relatively slow EDGE network.

Yet those same reviews praise its slender profile, easy operating software, smooth Web surfing software and high-resolution touch screen.

Any official signs of the iPhone's success likely won't come for months. Some hopeful customers will have to switch cellular phone providers to AT&T. "We're going to wait a bit," said Virginia Chilcote, president of the Bay Area Macintosh User Group. "People have cell phone plans that need to expire." Yet, she's already arranged for an AT&T employee to bring an iPhone to their next meeting in July, "so we can see it. We really want to play with it."

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