iPhone

Updated: Feb. 10, 2011
In 2007, Apple's chief executive, Steven P. Jobs, introduced the iPhone, which instantly became one of the most talked-about consumer products ever. Thousands of customers lined up to be the first to buy the phones, which featured computing and Wi-Fi capabilities, along with a crisp, computer-like display on an innovative touch screen. Rivals rushed phones with similar features onto the market.
Three years later, seeking to fend off intensifying competition from Google and others in the smartphone business, Apple in 2010 introduced a new version of the iPhone that includes a front-facing camera for video chats. The iPhone 4 became Apple’s most successful phone introduction yet and sales were expected to accelerate when Verizon offered its version of the iPhone.
The long-expected arrival of the iPhone on Verizon ended years of exclusivity for AT&T and was likely to upend the smartphone market in the United States. Consumer surveys suggested that demand for a Verizon iPhone is large, as many people have held off from buying an iPhone simply to avoid AT&T’s much-publicized network problems, which include spotty coverage and dropped calls.
Despite icy temperatures in New York on Feb. 10, 2011, people eager to buy the new iPhone filed into Apple and Verizon stores. Many noted, however, that the stores seemed to have prepared for a much larger crush of customers than they received.  The muted enthusiasm was in sharp contrast to the initial introduction of the iPhone 4 on AT&T’s network in June 2010.
A Verizon iPhone could help sell millions of new devices, continuing the iPhone’s strong momentum. It may also become an obstacle to the rapid rise of Android devices, most of which are sold by Verizon Wireless. While the iPhone remains the best-selling smartphone in the United States, many handset makers sell devices running Google’s Android software. Collectively, those devices outsell the iPhone.
Verizon's iPhone version will work only on the carrier's current "3G" network even though the carrier has fired up a faster "4G" network in many cities. That super-fast wireless data network is available only to plug-in laptop modems for now, but Verizon will have smart phones for it by the summer of 2011.
Verizon's iPhone 4 has one feature AT&T's does not: It can act as a portable Wi-Fi "hot spot," connecting up to five laptops or other devices to Verizon's 3G network through Wi-Fi. It's a feature that's been offered on other smart phones, usually for an added monthly fee.
An Issue of Control
Apple likes to maintain tight control over what programs can appear on the iPhone — a task that became a little bit harder in July 2010, when the Library of Congress, which has the power to define exceptions to an important copyright law, said that it was legal to bypass a phone's controls on what software it will run to get "lawfully obtained" programs to work.
The issue has been a topic of debate between Apple, which says it has the right to control the software on its devices, and technically adept users who want to customize their phones as they see fit.
Apple has also said that altering the phones encouraged the pirating of applications, exposed iPhones to security risks and taxed the company's customer support staff. But iPhone hobbyists say they simply want to have free range to use certain features and programs on their phones that Apple has limited or failed to offer.
Can Apple win in an intensely competitive market against rivals that are openly licensing their software to scores of companies? It faces that challenge not only in phones, but also in the market for tablet computers, where the iPad is about to take on a similar set of rivals.
The stakes are huge, as the mobile computing market could prove to be larger than the PC market ever was.
That leaves little room for error at Apple. The company must continue to create hit products, as a single misstep could give Android and other rivals an opportunity to make inroads and steal market share.
Also, as the number of people with Android phones grows, Android will grow more attractive for app developers. For now, Apple’s App Store, with more than 250,000 applications, enjoys a large advantage over the Android Market, which has about 80,000. And those numbers don’t tell the whole story. Apps made for the iPhone tend to be of better quality, are more frequently downloaded and on average are more profitable for developers.
But that edge may not last, especially as many developers fret about Apple’s tight control over the App Store.
For now, the smartphone market is growing so rapidly that the rise of Android has not necessarily been at the expense of the iPhone.
http://topics.nytimes.com/top/reference/timestopics/subjects/i/iphone/index.html

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