Technology eReport
Volume 6, Number 3
September 2007

Table of Contents
Past Issues

Apple Phone Home

By Jeffrey Allen

Several months ago, Apple announced that it would delay the release of the newest iteration of its operating system, OS X 10.5 (aka Leopard), in order to divert resources from the development of Leopard to the completion of the iPhone. Apple management smelled a killer product in the marketplace and made the decision to move on it and make sure that it could release the iPhone in June as promised.

On June 29, 2007, at 6:00 p.m., the iPhone officially went on sale at Apple Stores and Cingular/AT&T stores throughout the land. The fanfare and hoopla associated with the release boggles the mind. One would think that we expected the next major generation of a video game. Anticipating the promised shortage of inventory, people lined up outside the Apple stores days in advance. Some lined up to sell their spots in line. Some lined up to get the iPhone and resell it on places like eBay. Some lined up to get it for themselves as early adopters who could not bear to wait to get the new smart phone. Early reports indicate that the Apple/AT&T partnership sold approximately 700,000 phones in the first three days of sales. One report of eBay sales showed the highest price paid for an iPhone at $12,500.

Now that Apple has the phone out, it won’t take long for inventory to catch up with demand, and, if you want one, you probably can acquire one without too much difficulty by the time you read this article.

Pundits have claimed the iPhone ushers in a new era in communications/Internet access/email/smart phones/PDA devices and will change the way we get, communicate, and use information. Although that may gild the lily just a bit, few will argue that the iPhone takes us to another level in converged devices. Whether you believe the hype or not, you cannot deny that in the iPhone, Apple has developed a slick technology device with some real appeal. Interestingly enough, the device appeals to people of all ages, including those who have not in the past reacted very positively to slick technology.

 In the iPhone, Apple married a quad band GSM telephone to a two-mega pixel camera to a video iPod, added 802.11b/g WiFi and Cingular Edge Internet connectivity, and then made it run with a version of the Leopard operating system. The iPhone works internationally, can use push or pull email technology to recover email from most popular email systems including POP and IMAP systems such as AOL, Yahoo, Google GMail, and, of course Apple’s own .MAC mail. The iPhone weighs in at 4.8 ounces and has dimensions of 4.5" (H) x 2.4" (w) x .46" (D).

You get your choice of 4GB or an 8GB flash memory for $499 or $599, respectively. Early reports of concerns over battery usage resulted in modifications, and the officially released specifications for the iPhone claim that the built-in rechargeable lithium ion battery will provide up to 8 hours of talk time, 250 hours of standby time, 6 hours of Internet browsing, 7 hours of video playback, and 24 hours of audio playback. Do note that those estimates do not represent cumulative numbers. If you make phone calls, do not expect 6 hours of Internet time. If you use the iPhone for video and audio playback, expect less than 8 hours of talk time. The iPhone also supports Bluetooth, but using a Bluetooth device also draws battery power and reduces the other numbers.

The iPhone uses Apples 30-pin dock connector and has a 3.5 mm stereo headphone minijack. Because the iPhone will hold contact and calendar information as well as audio and visual information, you would expect it to sync to a computer. In fact, it will sync with computers on the Macintosh OS X version 10.4.10 or later as well as those on the Windows platform running Vista Home Premium or better or XP Home or Professional with Service Pack 2 or later.

The iPhone will play AAC, Protected AAC, MP3, MP3 VBR, Audible (formats 1, 2, and 3), Apple Lossless, AIFF, and WAV formats. It comes with several iPod features, but certainly not all of them. The iPhone has the following iPod features: password protection, shuffle and repeat modes, SoundCheck, equalization, volume limiter, and on-the-go playlists. It can handle podcasts and audio books as well as music and includes audio book speed control. The iPhone does not do games, lyrics, video output to a TV, or disk mode (when the iPod acts as a hard drive for transporting computer files).

I have little doubt of the success of the iPhone. Its immediate and early acceptance suggests that it will quickly evolve into a third highly successful profit center for Apple. The real question will be whether it can sustain that position despite the well-established fickleness of the mobile phone-buying public that likes to change phones just for the heck of it every so often. Apple has left itself room to grow in the future. The iPhone supports the outdated Edge system that Cingular/AT&T is in the process of replacing with faster and better technology that will make it more competitive with Verizon and Sprint in terms of Internet access. Count on the fact that a later iteration of the iPhone will respond to that technology.

 One concern that I have about the iPhone is the low level of memory. You get your choice of 4 or 8GB. As a PDA, 8 GB provides plenty of space. So, for that matter, does 4GB. The same analysis and conclusion apply to a camera and to a digital audio player. When you get to the point of including video and adding still photos and audio and your contacts and your calendar information, 8GB starts getting crowded. Remember, the full-sized video iPods come with 30GB or 80GB of memory. Why would Apple use such low levels of memory in the iPhone? Well, I have a couple of ideas. First, more memory generally means more battery drain, even with flash memory (which draws substantially lower energy levels than other forms of memory). Second, by keeping the iPhone memory lower, Apple helps maintain a market for its iPods, which have, to date, served as the best-selling product in Apple history. Apple will likely act very carefully and not very quickly respecting significant upgrading of the iPhone’s memory.

Before you run out and buy an iPhone, you should consider a few other negatives. The iPhone does not do voice memo, voice dialing, or call recording. Although the iPhone uses flash memory, like other Apple products, it has no memory slot for additional flash memory. You get what you buy from Apple, and that’s all you get.

While the quad band GSM phone will work in many foreign countries, using it there requires paying roaming fees and surcharges to Cingular/AT&T for the use. You cannot simply replace the SIM card that came with the phone with a SIM card from another country (a much cheaper way to do cellular calling abroad). When I travel outside of the country, I often take two cell phones with me, one that has my regular SIM card in it and a second, unlocked phone that I can use to hold a SIM card from whatever country I am traveling in at the time. If you get an iPhone and travel overseas, you will likely want to get a second unlocked phone.

One other negative: Apple climbed into bed with Cingular/AT&T respecting the iPhone. The general public does not know the term of exclusivity; but in the foreseeable future, if you want an iPhone, you can have your choice of any provider as long as you pick Cingular/AT&T. AT&T has set up special rate plans for the iPhone including voice and data. If you have an existing voice plan with AT&T and want to keep that plan, it costs an extra $20/month for the data portion of the iPhone plan.

On other fronts, the Leopard OS should come out in October as now rescheduled. Look to pay about $129 for a singe copy of $199 for a family pack.

Apple recently upgraded its MacBook and MacBook Pro lines. The changes made related primarily to processor speeds. The new MacBook comes with an Intel Core 2 Duo running at 2.16 GHz and accepts up to two megabytes of RAM. The Mac Book Pro tops out at an Intel Core 2 Duo running at 2.4 GHz and 4 GB RAM. If you already have a Core 2 Due MacBook or Mac Book Pro, the new upgrades do not make a difference sufficient to warrant replacement of your current hardware. If you think you need a new machine, the new upgrades make the choice that much easier. If you don’t have to have the machine right now, you might wait a few months and get it with OS X 10.5 built in rather than upgrading to it after buying the new system when Apple releases it in the fall.

By the way, one of the main reasons to go with the MacBook Pro in the past has been the Express 34 slot allowing the use of an air card. Now that air card modems have come out with USB connections that work with all computers, the air card will work with the MacBook and, unless you need the larger screen or the extra 2 MB of RAM, you can get a MacBook and use it for most business purposes. If you plan to run Windows as well as the Mac OS and plan to use parallels, you will need to consider the RAM issue. The Mac Book will run Vista and Mac OS X with 768MB of the 2GB of RAM allocated to Vista and the rest held back for the Mac OS. It runs it fairly slowly, though. A Mac Book Pro with 3 or 4 GB of RAM allows a better allocation as you can keep 2 GB for the Mac OS and use 1 GB for Windows XP or Vista (If you have 4 GB, you will want to use 2 GB for Vista.

Jeffrey Allen is the principal in the Graves & Allen law firm in Oakland, California, with a general practice emphasizing real estate and business transactions, litigation, and ADR work as a mediator and arbitrator. A frequent speaker on technology topics, he is the special issue editor of GPSOLO’s Technology & Practice Guide and editor-in-chief of the Technology eReport. He regularly contributes to those and other publications. A frequent presenter at CLE courses for attorneys on technology and on substantive law topics, he also teaches business law in the graduate and undergraduate divisions of the Business School of the University of Phoenix and construction law and other topics at California State University of the East Bay. In addition, he is a solicitor of the Supreme Court of England and Wales. You can contact Jeffrey via email at .

Picture courtesy of Apple Computer, Inc.

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