20 things we don't know about the iPhone

Steve Jobs unveiled his breathtaking iPhone vision Tuesday, calling it a "magical" device that would "change the world" when it ships in June. Jobs' use of the word "magical" hit the nail on the head. Jobs' keynotes are more than just speeches. They're magic shows.

A skilled magician makes you believe in magic. He makes you believe the magician has supernatural powers to, say, make people (or competitors) disappear. But there's no such thing as magic. The magician makes you believe by showing you one thing, but keeping you in the dark about all the facts that might shatter the illusion.

Now, all this sounds negative so far, but I am in fact truly in awe of what I witnessed Tuesday. Steve Jobs is the Salesman of the Century -- nothing wrong with that. And Apple and Jobs have done everything right with the iPhone -- so far. I certainly want one, and am rooting for Apple to dominate and transform the handset industry.

However, I fear that the iPhone vision and the keynote were so flawlessly executed that Apple may have raised expectations that will be hard to fulfill. The things that might shatter this wonderful iPhone illusion are the things we do not know.

Here's are 20 unanswered questions about the Apple iPhone:

1. How much will it cost to own an iPhone? We already know that the cheapest iPhone will be far more expensive than the most costly Cingular phone to date. But what will the monthly service cost? What will the data plans cost? Will the Yahoo e-mail push option be extra?

2. What will be the "unlocked" iPhone price? Prices quoted by Jobs -- US$599 for the 8GB model and US$499 for the 4GB phone -- are the discounted prices that require a two-year Cingular contract. Will it even be possible to buy an iPhone without a wireless contract and without a specific wireless carrier?

3. How much will it cost to replace a lost or damaged iPhone? Let's say you shell out US$600 for an iPhone, then two weeks later you drop and destroy it. How much will it cost to replace? US$600? US$1,200? More? When you buy a phone with a contract, you nearly always get a huge discount because you're signing up for the service. US$150 phones are free. US$200 are US$50. The Pearl, for example, is US$200 with the contract, but if you replace it, the replacement is US$400, because you don't get a discount. How much will replacement insurance cost? Wireless carriers offer third-party insurance to cover this high replacement cost -- usually a few dollars per month added to your cell-phone bill. Will the insurance for the iPhone cost US$5 or US$15 per month? We don't know. If it's US$15 per month, for example, that adds US$540 to the price of the phone over three years. Not trivial.

4. How fast is the iPhone? Touch-screen devices are often ruined by a delay when you press the on-screen virtual buttons. Apple may solve this problem with its first-release product, but if it doesn't, a persistent lag will degrade the user experience. Jobs said the "iPhone runs OS X" and "desktop-class" applications. But will the OS and applications perform with desktop-class performance? If so, Apple will have solved another problem nobody has ever been able to solve.

5. What did Jobs mean when he said the "iPhone runs OS X?" Is it the "core" of OS X with a new mobile UI? Or is the "core" new, with OS X-like UI code on top? Jobs already hinted that special iPhone applications -- not standard desktop applications -- will run on the phone. What is the iPhone's operating system, really?

6. How well will the iPhone sync with Windows applications? Jobs said the iPhone will sync with your desktop-based data -- contacts, calendars, photos, notes, bookmarks and e-mail accounts -- without giving specifics beyond the fact that iTunes will serve as the synchronization application. Will it sync seamlessly with Microsoft Outlook? Lotus Notes? Other personal information manager (PIM) and e-mail applications? Which ones? How well will all this work?

7. Will businesses be able to use the iPhone? Jobs dissed Treos, BlackBerrys and other devices for their lack of usability. But these companies spend enormous resources on building back-end infrastructure. These systems enable businesses to roll out programs that meet company objectives around regulatory compliance, data security, cost reduction and more. The success of these products is based in part on their enterprise and business solutions. How ready is iPhone for business?

8. Will the iPhone support Word, Excel and PowerPoint documents? Jobs says you can synchronize the iPhone with e-mail -- and even pointed to IMAP support, including Microsoft Exchange -- but what about attachments? Without support for standard office documents, the iPhone is a non-starter for most business users.

9. Will you be able to use your iPhone as a modem for your laptop? If not, this could be a showstopper for many traveling business people.

10. Will the iPhone scratch or peel? Previous Apple products, including some iPods and notebooks, had serious problems with scratching and peeling. People use and abuse their cell phones even more than they do other devices. Will Apple make the iPhone rugged enough to avoid embarrassing blog write-ups about scratching, peeling or other materials defects? Will the iPhone be too slippery to use without dropping?

Page Break

11. Will the iPhone be called the iPhone? Jobs says "yes," but that was news to Cisco, the company that owns the trademark. Cisco said Wednesday that it is suing Apple over the name. It's possible that the two companies will arrive at an agreement, but to date, the name is still up in the air.

12. Will people hate the on-screen iPhone keyboard experience? I got rid of my Palm Treo mainly because the keys were hard to type with -- too small for my fingers. The iPhone keys are about the same size as the Treo's, but software, with no tactile feedback. The keyboard looked great in the demo. But what will it be like to use it every day?

13. Can you use the iPhone to make VoIP calls? Using your iPhone over a Wi-Fi connection to make, say, Skype calls, would be an obviously beneficial feature. Will Apple allow it? Will Cingular?

14. Will people accept iPhone's slow Internet connection? While other phones are embracing 3G, the iPhone's EDGE support gives users a disappointing 2.5 G experience. Jobs showed The New York Times Web page -- how long will that page take to load? For people already using 3G on their phones, going back to a slower device may be too much to ask.

15. Will third-party software vendors be able to create applications for the iPhone? If not, why not? If so, what are they?

16. Will iPhone's single-carrier model wreck the product for most users? Some U.S. cities don't have any Cingular coverage. In other cities, such as New York, Cingular coverage is inferior to competitors' coverage. By limiting the iPhone to Cingular only, will Apple turn away the majority of its potential iPhone customers?

17. Will there be any way to wirelessly share files with the iPhone? Like the Microsoft Zune, the iPhone supports Wi-Fi. But unlike Zune, iPhone Wi-Fi is for connecting to the Internet through wireless hotspots or networks only. You won't be able to connect peer-to-peer. Will Apple be able to turn on this capability later? Will the company at least enable file sharing over the Internet?

18. Will the iPhone kill sales of iPods? Apple has a good thing going with its profitable iPod business. But will people stop buying iPods as they wait for an iPhone? Will investors conclude that Jobs' keynote was a big mistake if iPod profits go down the drain for two quarters?

19. Will Apple be able to accurately fill iPhone orders? No doubt the iPhone is very expensive to manufacture, and, unlike the iPod, is a very complex device, electronically. In the first year of its release, Apple could very easily overbuild -- build far more than it can sell in a given period of time -- or under build -- be unable to keep up with demand, and create long waits and frustrated customers.

20. Will the iPhone really "change the world"? The iPod "changed the world" because everyone bought one. But will the iPhone's price, Cingular-only support, lack of business usability and other factors really make the iPhone just a niche luxury toy for the rich?

The iPhone vision Jobs unveiled was bold, risky and amazing. Now we can only wait and see what Silicon Valley's master magician really has up his sleeve. If Jobs and Apple can produce the right answers to these 20 questions, they'll make a believer out of me.