"let's remember that the cellular market is also not composed of Apple-worshipping technogeeks."

Agreed! This market is actually composed of technogeeks, not Apple-specific technogeeks. And it's these technogeeks that Apple is banking on. Apple knows it's already won over their own fans.

Just for reference: the RAZR was released at a 499 price tag, and it offered none of the sleekness or sophistication of the iPhone. It was just... thin. It was only a year or two later that RAZR's price plummeted as nearly every subscriber used it to try to get customers locked in to their services.

...and not everyone had a RAZR until you could get them virtually for free! (ask Motorola shareholders how they feel about that one)

(I purchased an unlocked phone specifically because I was tired of having the same phone everyone else did!)

iPods did not take off until around 2003, IIRC. What happened between 2001 when iPod first appeared and 2003? The price dropped and the design and capacity improved from the first couple of generations.

If 1st gen iPhone takes off and is a huge hit, I will be pleasantly surprised. And it's nice for once for analysts to be inclined in favor of Apple rather than perpetually skeptical of anything they do (though this does underline once again the pack mentality of analysts).

Personally I don't think it's going to be the home run GS is predicting, at least not right out the gate. In a year or two? Depends what Apple does. I think the product will improve, the price will drop to the $300 range, and then perhaps Apple might have another big hit.

You're right about the time it takes for a product to catch on and take off.

Personally, I think the phone will take off, but who knows if it'll be in the month or the first year. The thing that makes this product an immediate winner is that Apple doesn't stand still with these things. Because it's all software-based, they can do whatever they want.

Expect iPhone to be the first of many products using multi-touch. Of course, like the iPod, iPhone is anything Apple decides it is. And, like iPod, this design will look amazingly different in a few years.

Either way, should be interesting. Good conversing with you, though.

I have learned my lesson and am now predicting that the iPhone - at whatever price Apple decides to sell it for - will be a success. As Jobs said in the keynote, all he wants is 1% market share to start. I think that he would be perfectly happy to take .5% in the first year.

Uh-oh. Did it ever occur to you that its not your picking Apple to not succeed that's bad, but just that your picking is bad. So now you saying the iPhone will be a success could be just the momentum killer it didn't need and it will fail a horrible, miserable death.

The real question is, forgetting your post, what were you thinking before you decided to just say it'll be big? If you thought it was going to be big, then that's bad for Apple. If you thought it was just OK but just a me-too device that wouldn't sell, then start buying AAPL, people!

Agreed! This market is actually composed of technogeeks, not Apple-specific technogeeks. And it's these technogeeks that Apple is banking on. Apple knows it's already won over their own fans.

Wrong. The cell market isn't made up of technogeeks. Its made up of pretty much everyone. Most of whom consider the phone to be a commodity which you purchase as much on price as anything else.

The smartphone market, that might be considered one of technogeeks.

But, keep in mind one thing when talking about technogeeks. They like to fiddle with stuff. Locking themselves in for two years into a closed (no hacks/programs/extras allowed) system isn't going to drive them to buying one of these things.

iPods did not take off until around 2003, IIRC. What happened between 2001 when iPod first appeared and 2003? The price dropped and the design and capacity improved from the first couple of generations.

Actually, there's one thing that you can point to that drove the iPod sales. Windows compatibility. And, especially, USB compatibility. Before that, it was just a cute mac-user-only device. Once Windows users could use one (hence the USB, since few desktops ever came with Firewire), then it become a device for all users (well, except the Linux crowd).

1. Apple is only aiming for 1% marketshare in the first year. It is likely that they will exceed that target.

2. There are a lot of smartphones out there that are more than 500 USD if purchased unsubsidized.

3.The iPhone will not be sold subsidized. The prices you've seen quoted are the full price.

4. The contract price is for the service only. You are not paying for the phone by installments. This will likely mean it will be a cheaper plan than one that includes a free or subsidized phone.

There is a pricey Deli where I live. It is very popular amongst the uppies, and people from all over the country visit it when they are in town. The owner of the place once was asked by a reporter what he does when people complain about the high price of an item. The owner responded, if enough people complain I raise the price even higher.

People who complain about the high price of an item, simply are not the intended customer. Apple clearly said it is only going for one percent of the market. Of course, Apple does not mean that, it wants more, but it has set a goal it thinks it can match or likley beat.

The one percent Apple wants is obviously the top one percent. If you are not one of these top one percent customers, don't worry Apple will eventually come around to catering to you.