Silicon Insider: Should You Buy an iPhone?

June 28, 2007 — -- Okay, let's deal with the tech question of the week right from the start: Should you buy an Apple iPhone?

Frankly, I don't know. I haven't seen one in person and I haven't spoken with anyone -- even at Apple -- who has. So, any opinion I have should be immediately suspect, as it based only upon what I read from other sources, and hear as scuttlebutt around Silicon Valley.

… So, what the heck, here's what I think.

No. You shouldn't buy an Apple iPhone. At least not yet.

I say that, despite the fact that the iPhone will likely live up to most of its pre-introduction hype, and will likely be a landmark, though not completely revolutionary, product that will profoundly impact the telecommunications world for the rest of this decade.

Here's why I don't think you should make the purchase:

The Cost: When you include the price of the iPhone, the monthly AT&T phone fee (and you're committed for two years), the sign up fee, and the cost of loading the device with iTunes, not to mention quitting your current cell phone contract, and you're talking an investment of as much as $2,000.

Be honest: do you really need to spend that much money on a cell phone, even if it has a brilliant interface, MP3 capacity, and Web access? Or would you be willing to settle for 80 percent of that -- i.e., one of the latest smart phones from another manufacturer at less than half the overall price?

The Kool-Aid: The biggest intangible asset of the iPhone is the 'coolness' factor. This is a purely subjective judgment: How much is the ability to sashay around with your iPhone to your ear and impress the hoi-polloi worth to you?

Remember: Apple is cranking out those puppies as fast as it can roll its factories right now. That means by the end of summer there will probably be enough iPhones out in the marketplace that the initial cachet of owning one will have faded. In other words, is the two months of being the coolest techie on your block worth several hundred bucks to you?

The Reviews: I've been struck the last two days by just how careful the early reviews of the iPhone have been. Putting aside the predictable raves of the mainstream media's biggest Apple Fanboy, Steve Levy of Newsweek, the initial reviews have been surprisingly diplomatic.

All seem to agree that the iPhone is a terrific new product, but not quite what it could have been -- and that's without talking about the price. Even the Wall Street Journal's Walt Mossberg, who in the memory of most adults has never met an Apple product he didn't love, was a touch tepid in his long review of the iPhone Wednesday. That's not a good sign -- especially since the consensus seems to be that where the iPhone is compromised is in wireless communications and Internet access times. In other words, that makes it a big, sleek telephone/iPod with a fabulous user interface. Nothing wrong with that -- but is it worth it to you at that price?

The Expected Weaknesses: Interestingly, what were predicted to be the biggest flaws in the iPhone back in January have not panned out in June. Battery life is impressive -- though, as with the iPod, the battery is bolted inside the case, so it can't be quickly replaced. That was annoying enough with the iPod, an entertainment device, but I suspect will the source of considerable anger to Road Warriors who are used to popping in a back-up battery when their phones go dead on a busy day.

There was also the fear that the touch screen, like the early iPods, would quickly get scratched up with use – especially with a device that has no physical keys. But Mossberg's review seems to put that fear to bed.

As for the backlash against Apple getting into bed with AT&T, that's a matter of personal preference Personally, I think all cell phone providers suck, so I'm a poor judge. But I sure wish Apple had shown some real guts and made the iPhone an internet phone -- now that would have been revolutionary.

The other big early concern, that the iPhone's purely touch screen keyboard would prove as impractical as its predecessors on other electronic devices, also seems to have been dismissed in Mossberg's review -- but on that one I remain unconvinced, having just tapped in a phone number on my old Nokia cell without having to look at the keys. Is this really going to work over the long run -- and, worse, will it degrade like most touch screens? I suspect it depends on what you mostly plan to use the iPhone for.

Finally, there is the matter of size. The early reviews call the iPhone design elegant and thin, but until you try out a real one, there's no way of knowing just what it will be like putting that electronic candy bar next to your ear all day.

The Unexpected Weaknesses: Those were the early concerns, most of which Apple has handled quite deftly. But a whole new host of concerns have popped up this week as early reviewers have played around with their iPhone loaners.

The biggest design flaw I've seen is that the iPhone does not feature state-of-the-art 3rd Generation (3G) cell technology. At this price, that alone should be a deal-breaker for any techie who isn't blinded by the hype. 3G is twenty times faster than the technology used in the iPhone, which suggests that, no matter how great the Safari browser is, downloading multi-media pages from the Web is going to be really s-l-o-w. Two years from now it will be glacial.

The iPhone is also touted as the best iPod yet, which may be true in terms of software, but once again the hardware is second-shelf: the iPhone, with 8 gbytes of memory, only holds about half the songs or movies of a video iPod at (over two years), at one-eighth the total package price.

And then there's all the little stuff: the tiny screen, the recessed earphone plug that may not play your current earbuds, the fact that the iPhone only plays mono-Bluetooth (which means you can't play stereo through your wireless headphones or expensive car stereo), the lack of a wireless connection to enable you to easily download iTunes, the reality that few corporate systems will support it, no texting with pictures, no IM, no GPS, etc., etc.

Are any of these flaws, in themselves, deal-breakers to buying an Apple iPhone? No. Even with them, the iPhone remains a remarkable creation, the kind of thing that Jobs & Co. seems to do effortlessly, while other companies seem to find impossibly difficult.

But these weaknesses do need to be put into your calculations. Only you can make that calculation of capabilities plus cool, minus price and performance limitations to determine if the iPhone is worth the purchase.

For me, it's not. But then, over the years, I've developed an aversion to being an early adopter of new technologies and products. I've brought too many Corvus computers and Apple IIIs and HP-01 wrist-calculators in my life to jump on anything new, no matter how many people camp out on line to buy it.

And I've noticed that this time I'm not alone: all over the Web I've detected an interesting backlash. Many people, including staunch Apple loyalists, are saying that they are going to sit this one out and wait for iPhone 2.0, the version in which all of the current problems are fixed.

That's not a bad strategy -- though it would play hell with the electronics industry if it was universally adopted for all new products. But when you consider that a recession is likely this fall -- a downturn that may make you regret having shelled out this much money for a phone; that might lead to steep Christmas discounts on the current generation of iPhones, and the rushing to market of the improved 2.0 version -- a little patience, even at the cost of some short-tem cool, might be the smart choice.

This work is the opinion of the columnist and in no way reflects the opinion of ABC News.

Michael S. Malone, once called the Boswell of Silicon Valley, is one of the nation's best-known technology writers. He has covered Silicon Valley and high-tech for more than 25 years, beginning with the San Jose Mercury News, as the nation's first daily high-tech reporter. His articles and editorials have appeared in such publications as The Wall Street Journal, the Economist and Fortune, and for two years he was a columnist for The New York Times. He was editor of Forbes ASAP, the world's largest-circulation business-tech magazine, at the height of the dot-com boom. Malone is best-known as the author or co-author of a dozen books, notably the best-selling "Virtual Corporation." Malone has also hosted three public television interview series, and most recently co-produced the celebrated PBS miniseries on social entrepreneurs, "The New Heroes." He has been the ABCNEWS.com "Silicon Insider" columnist since 2000.