After cleaning up in the portable music market with the iPod Apple is now set to take on phone vendors with the release of a stunning new touch screen phone that Apple claims is 5 years ahead of it's competitors.

 The iPhone comes with 8Gb of memory Mac OS X and quad-band as well as, Wi-Fi, Bluetooth, Internet, and extensive media capabilities. It will be available in the US market in June however Australians may have to wait till 2008 to get their hands on the device. Apple expects iPhones to begin shipping in June, 2007, with a 4 GB model priced at US$499 and an 8 GB model for US$599, each with a two year service contract. iPhones will land in Europe in the fourth quarter of 2007, and in Asia and Australia during 2008.

 Announced by Apple CEO Steve Jobs at the Macworld trade show in San Francisco, (Note the new title) the device is a widescreen personal media player that plays music and vide with full-blown Internet communications capabilities and a quad-band, EDGE-capable mobile phone. As one attendee said "This is a Smartphone" with a brain and simplicity.

The first thing you notice of the device is that the phone is slim at 11.6 millimeters and sports a 3.5-inch, 160dpi touch screen, along with a 2 megapixel camera, a headset jack, built-in speaker and microphone, and an iPod dock connector on the bottom.

The phone sports built-in volume controls, a sleep/wake button on top. A proximity sensor turns off the screen when users hold the phone to their heads; automatic orientation adjustment switches on the fly between portrait and landscape modes. But other than that, the iPhone boasts virtually no dedicated controls: instead, everything is driven using a new (patented) multitouch touch-screen, which Jobs claimed to be far more accurate than previous touch-sensitive displays and which puts the iPhone "at least five years ahead" of competitors.

Users control phone functions via a Dashboard-like interface; all phone and application interfaces take place on the touchscreen. And the iPhone uses Mac OS X, tapping into Apple's mainstream operating system for power management, networking, security, and applications—as well as the Macintosh's renowned development community, all of whom will be able to develop desktop-class applications for the iPhone.

As a phone, the iPhone is a quad-band GSM/EDGE handsett hat  also offers integrated Bluetooth and Wi-Fi wireless networking. According to Jobs, the iPhone's "killer application" will actually be making calls: a "Visual Voicemail" application provides random access voicemail, and the iPhone features more-or-less standard SMS, calendar, and contact-tracking capabilities—all of which presumably sync with Apple's Mac OS X applications. The phone's interface simplifies setting up conference calls, making calls private, adding numbers and contact information to favorites, and offers a visual keypad for dialing numbers.

As a personal media player, the iPhone offers all the capabilities of an iPod, with music and video playback, plus the benefits of a high-resolution widescreen display for showing movies and video.

The iPhone also aims to be an Internet communications device, offering full email capabilities and leveraging Apple's Safari Web browser to put "the Internet in your pocket for the first time ever." The iPhone's built-in Web browser displays entire Web pages as though it were a desktop-based browser, while built-in zoom features let users magnify portions of a page and gestures enable page navigation. The iPhone integrates support for both Google and Yahoo search, as well as support for Google Maps; Yahoo will also be offering free push IMAP email to iPhone users.

The iPhone will come with standard headphones with a built-in control to answer calls; Apple also plans to offer a Bluetooth headset with a single button which automatically sleeps to preserve battery life.

It's unusual for Apple to announce products so far in advance: in the past, the company has preferred to debut products and have them available immediately or with only a few weeks delay. By giving the competition—like Motorola, Nokia, Samsung, RIM, and let's not forget Palm and Microsoft—six months to counter the iPhone, Apple is taking a chance that the device will be greeted with a shrug rather than rapturous enthusiasm. But, then again, many Apple loyalists have shown they will wait as long as it takes—and pay whatever is asked. Apple says it hopes to capture a one percent share of the mobile phone market in 2008; that would amount to 10 million iPhones.

Mr Jobs claimed the device, which runs on Apple's Mac OSX operating system and has a 3.5 inch colour screen a 2 megapixel digital camera, speaker and microphone, would "leapfrog" current internet-enabled smartphones. The device, 11.6 millimetres thick, does not have a keyboard, but uses a new touch-screen technology dubbed "Multitouch".

In a feature that will compete with products such as RIM's BlackBerry, Mr Jobs said that Yahoo will offer free "push" e-mail capabilities to Yahoo! Mail users. "When you get a message, it'll push it right out to the phone for you," he said.

Joining the presentation Jerry Yang, the co-founder of Yahoo! said:

"It's basically like having a BlackBerry without the exchange server."

Mr Jobs was also joined on stage by the Google chief executive, Eric Schmidt, who sits on the Apple board. Mr Schmidt said the iPhone would let companies such as Apple and Google "merge without merging" by delivering Google services through Apple hardware.

The iPod dominates the mobile music player market and has sold more than 70 million iPods since its launch in October 2001, but faces competition from "converged" handsets such as the Nokia N-Series and Sony Ericsson's Walkman phones, which can hold up to 4,000 songs.

In the middle of last year, Apple saw iPod sales flatten at amid a dearth of upgrades to the player.

Jerome Buvat, Global Head of Research for Capgemini Telecom, Media & Entertainment, the analysts, said: "The music-enabled handset market is more attractive in terms of volume than the MP3 player market. We expect worldwide shipments of music-enabled phones to reach over 600 million units by 2010, versus around 250 million for standalone digital music players."

Handset manufacturers have also been investing in mobile music distribution services, in an effort to compete with iTunes, Apple's online music and video store. In August Nokia, the largest handset maker with a 30 per cent market share, acquired Loudeye, a digital music distribution platform.

Source: smarthouse.com.au