Apple iPhone -- I like iPhone


Apple's iPhone Counts on Being Cool

One button. For years, that's all Apple would allow on the mouse that accompanied its Macintosh pcs, arguing that more would complicate a system that stressed simplicity. Now it's one button on Apple's iPhone, a radical experiment in cellphones that has become a phenomenon before it has even been subjected to the ultimate test: consumers around the world. It's unclear if the iPhone can meet Apple's ambitious goals, much less satisfy runaway expectations in an always hyped-up market. But there is no question that the iPhone, which is scheduled to be shipped to stores on June 29, has already had a tectonic impact. "You have to give them credit for shifting the way we even think about a phone," says Gerry Purdy, an analyst at the market research firm Frost & Sullivan.
Rivals are racing to match the device's new approach, which abandons traditional keys for a touchpad, opening space for a larger screen and elbow room for photos and video. Competitors hope to capture a slice of a market that until now has not even existed in the United States, where no one has ever sold a $500-and-up phone that is more about multimedia than about voice calls.
Not that others couldn't have. Most, if not all, of the gear that Apple has packaged into the iPhone is not unique, be it touch-screens, WiFi, Bluetooth, or a camera—even the iPhone's seeming magic in sensing if it's being held vertically or horizontally, shifting its screen appropriately. But that kitchen-sink approach is Apple's gamble: deftly packing oodles of capability into one sleek device and assuming Americans will pay for it (with no discount while being handcuffed to a two-year service plan).
Expectations. Apple is wagering that it can be first because of its superior fit and finish. The iPhone's raw technical specs left him cold, says Avi Greengart, recalling his initial reaction as Steve Jobs described the new product in a January speech. Then he got 15 minutes to try one, and his skepticism melted. "I realized it lives up to the hype," says Greengart, who has tested scores of hand-held devices for the market-tracking firm Current Analysis.
Apple understands that it's the software, stupid, and has written numerous nice touches into the system that runs all that gear. Some of them make the iPhone uniquely attractive: shadows behind objects, like a desktop computer, and fade transitions between screens. Flick the touch-screen and send a list scrolling, then watch it slow down as if on a physical spindle. Apple also manages to walk users through tasks like setting up a conference call—who can manage one of those on a cellphone?—without patronizing them with dumbed-down "wizards" or cutesy characters. "Many people hate, hate, hate their cellphones," Greengart says. "The iPhone doesn't make you feel stupid—it makes you feel cool."
There are things missing from the iPhone, including high-speed Internet, even though Jobs touted its Web browser. The phone won't tap the fastest data rates available from AT&T, with which Apple will sell the phone.

The iPhone's Top Pros and Cons

Face it, the iPhone can only have so many folks swooning if it's got raw sex appeal. This is one device that will appeal to both genders, leaving us to ponder just what will draw people when Apple launches the phone on June 29–and what everyone should be wary of.
Seven attractions:
Striking looks: And we don't just meet the slim, hot look of the case. This phone has a large, beautiful, and bright screen–which is all the more surprising since it's a touch-screen, which is usually less vivid. The screen measures 3.5 inches across, bigger than just about anything made for the hand, and can produce as good an image as a typical desktop monitor did just a few years ago.
Friendly demeanor: This looks to be one of the easiest cellphones to get to know and use. Apple does software well and has packed nearly 30 years of experience into lists that scroll with the flick of a finger, photos that expand and shrink with a stretch of a thumb, and a screen that gets wider or taller with the twist of a wrist. In short, the iPhone strives to become one with your hands.
Smarts: The phone comes with all the elements of a smart phone, including an address book, calendar, maps, notes, and, of course, E-mail. A full-fledged Web browser comes with the system, which also is a version of the OS X that runs Apple's computers. That means it can do several things at once, such as send a photo to a friend while checking the calendar.
Good voice: The iPhone hails from the folks who brought you the iPod, and you can bet this will be the best phone yet for listening to tunes. Plus it will work with the hundreds of iPod speakers and other accessories out there, including docks built into your Mercedes or Volkswagen, and maybe even at your seat on a Boeing Dreamliner. Just be sure to turn off the wireless before take-off.
Sensitive communicator: Besides a cellphone, the iPhone has built-in WiFi and Bluetooth, which should make it easy to connect to high-speed Internet hot spots and companion devices, like headsets. The phone itself is no slacker, with the industry's first visual voice mail: Your messages show up on a list, making it easy to find the one you want to hear first.
Buff muscles: With built-in memory of at least 4 gigabytes, the phone has the heft to carry a goodly amount of music, photos, and videos.
Worldliness: The iPhone is ready to roam the globe, with its four bands of cellphone reception.
Seven reasons to be wary:
Gold-digging: Starting at $500, the iPhone is one pricey date. That's even before the cost of a monthly voice and data plan, whose prices AT&T and Apple haven't yet revealed. Analysts estimate that Apple's cost is about half of that $500, suggesting that the company is milking the early adopters.
No prenup: Purchasing an iPhone will force you to sign a two-year contract with AT&T, which will provide voice and data service. And unlike just about every other phone out there, there is no discount on the purchase price for signing that two-year agreement.

AT&T Hoping the iPhone Has Coattails

SAN FRANCISCO, June 22 — When the iPhone goes on sale next Friday, people are likely to flood AT&T Wireless and Apple stores to check out the new device. But will the curiosity translate into big business for AT&T?
Skip to next paragraph MultimediaGraphic Plugging Into the Wireless Market Industry analysts and executives offer mixed opinions about how much the iPhone will shake up the wireless business. They are torn, too, about how much it will benefit AT&T — Apple’s exclusive partner — in its fierce competition with Verizon, Sprint Nextel and other carriers.
But analysts can generally agree on one thing: the sleek touch-screen iPhone will change what consumers expect from the mobile phones offered by wireless companies.
The shift will be like the one caused by the skinny Razr from Motorola, the once wildly popular phone that became perhaps the first that people regularly asked for by name, said Chetan Sharma, a wireless industry consultant.
“The Razr redefined expectations,” Mr. Sharma said. “The iPhone will have a similar and larger impact.”
For Mr. Sharma, that impact will benefit AT&T only if its competitors fail to offer solid alternatives: “If they don’t have a compelling product in the market, it’ll start to show.”
The other carriers argue that they already have competitive devices that take sharp pictures, allow music downloads and are tailored for heavy use of text messaging and Internet access.
But it is a testament to the power of Apple’s brand name and reputation that many consumers appear to be giving it a chance to redefine phones as the iPod did music players. AT&T said 1.1 million potential customers had signed up on the company’s Web site asking to be contacted when the phone is for sale.
Steven P. Jobs, Apple’s chief executive, has said that he expects Apple to sell 10 million iPhones by the end of 2008. That projection could include sales outside the United States, but Apple has not yet announced any deals with foreign carriers.
M:Metrics, a market research firm, found in a recent study that 64 percent of American mobile phone users had heard of the iPhone and 14 percent of those would be “highly interested in buying one.”
The iPhone could bring AT&T more subscribers, but perhaps more important it could allow AT&T to position itself as a younger, hipper company, said John Hodulik, a telecommunications industry analyst at UBS.
For AT&T “the iPhone launch is bigger than the launch of a new device,” Mr. Hodulik said. “It’s something more strategic. It’s about moving the whole brand.”
The new phone comes at a challenging time for AT&T and an inflection point for the industry.
AT&T’s share of new monthly wireless subscribers has fallen steadily over the last year, notably since it purchased BellSouth and changed its wireless brand to AT&T from Cingular. In the second quarter of last year, 29.5 percent of new cellphone subscribers chose AT&T, but that figure was 25.8 percent in this year’s first quarter, Mr. Hodulik said.
At the end of the first quarter, AT&T had 62.2 million subscribers, slightly more than Verizon’s 61.5 million, said Jonathan Atkin, an analyst at RBC Capital Markets. But Verizon is catching up a little bit each quarter.
AT&T is already doing worse than Verizon in terms of customer turnover, or churn, Mr. Atkin said. AT&T is now losing around 1.7 percent of its subscribers each month, compared with 1.1 percent at Verizon. T-Mobile’s churn is 2.6 percent, while Sprint’s is 2.3 percent.
AT&T executives say the buzz created by the iPhone will generate interest in their other products and inspire customers who do not buy the Apple device to perhaps buy a different phone from the company. To accommodate the expected demand this summer, AT&T is hiring an average of one extra temporary worker in about 1,900 of its wireless stores who will be trained to sell the iPhone.
“This is going to drive a tremendous amount of traffic and energy to our stores,” said Glenn Lurie, president for national distribution of AT&T’s wireless group. He added: “It’ll help our growth not just in iPhones but in our overall business.”
Mr. Lurie declined to say how much money AT&T is spending to market the iPhone or how many phones it expects to sell. He said he was not concerned that consumers would balk at the price of the iPhone, which costs $499 or $599, depending on how much memory it has. The phones require a two-year service contract and, unlike most other phones AT&T offers, it will not be subsidized by the company.
“Price is not an issue,” Mr. Lurie said. “It combines multiple functions and it’s the best iPod ever built.”
On this issue, and others, Verizon begs to differ.
“AT&T set the initial price very high, so it’ll likely do better once they lower the price, and align it with the value they offer,” said Mike Lanman, the chief marketing officer for Verizon Wireless.
Mr. Lanman said Verizon already had at least 18 music-capable phones. In the next few weeks, he said, it plans to introduce a new model of its Chocolate phones that allows not just downloading of songs over the air but also transferring music from computers.
Mr. Lanman said he was not worried that AT&T would steal customers because Verizon’s network infrastructure is superior and offers better connection coverage and stability. “For Apple, I think the big risk is the AT&T network.”
Some industry analysts agree that the iPhone is not necessarily destined to be an instant or significant buoy to AT&T’s business.
Edward Snyder, an equity analyst with Charter Equity Research, said that many people would be turned off by the price; older customers who can afford it, he said, will not care about all the fancy features of the iPhone, while younger ones who are excited about the device will not like the cost.
Over all, Mr. Snyder said, the iPhone will appeal to maybe 3 percent to 5 percent of wireless phone users. And he said he was skeptical that it would work as well as advertised.
“Implementing a cellphone is absolutely more difficult than anything Apple’s done to date,” he said, noting that, in particular, the phones might have trouble delivering consistently good voice communications and that the devices could suffer overall reliability problems. “Go out and buy an iPod and hold it at waist level and drop it. That’s the end of the iPod.”
“I don’t think Apple’s going to be a big player in this at all.”
The deal could actually go badly for AT&T because it will spend a lot of money to market the phone and then not wind up with the returns it hopes for, Mr. Snyder said. But Mr. Snyder joins other analysts who agree that, if nothing else, the iPhone will accelerate innovation in the handset market.
Bill Plummer, vice president of Nokia’s multimedia group in North America, disagreed with the assertion that the iPhone would bring fundamental change to the market. He said Nokia already sold high-end phones with a wide range of functions, including the N95, which has a five-megapixel camera and a hard drive to store and play music. The phone works on either the AT&T or T-Mobile network and sells for $749.
The iPhone, he argued “is an evolution of the status quo.”


Verizon, Sprint await iPhone onslaught

WASHINGTON (MarketWatch) -- While AT&T Inc. executives talk confidently about gaining market share in the wireless business after the iPhone is released, skeptical rivals have reserved their fire.Verizon Wireless, Sprint Nextel Corp. and T-Mobile USA Inc. all say they are prepared for the iPhone, but none has offered a clear strategy to combat the introduction of the highly anticipated device. "I'm not sure it is wise to pick on a particular product and say: 'This is the product that we want to compete head-to-head with,'" Denny Strigl, Verizon's chief operating officer, said last week. "It does not make a lot of sense to me." Apple Inc. (AAPL : Apple IncNews , chart , profile , moreLast: 120.38+0.19+0.16%
12:15am 06/13/2007
Delayed quote dataAdd to portfolioAnalyst Create alertInsiderDiscussFinancials Sponsored by:AAPL120.38, +0.19, +0.2%) has designated June 29 for the debut of the wireless device, which will work only on AT&T's network. The iPhone is a first-of-its-kind mobile handset based entirely on a touch-screen design but will sport a high price tag of $500 for the cheapest model. AT&T (T : AT&T IncNews , chart , profile , moreLast: 39.08-1.04-2.59%
12:07am 06/13/2007
Delayed quote dataAdd to portfolioAnalyst Create alertInsiderDiscussFinancials Sponsored by:T39.08, -1.04, -2.6%) has repeatedly called the iPhone a "game changer," saying more than 1 million potential customers have made inquiries about the device. Many of them have declined to re-sign annual commitments with their current providers so they'll have a chance to check out the iPhone, AT&T executives say. "We believe the big shift that will occur is it's going to be an opportunity to take share," John Stankey, AT&T's group president for operations, told investors Tuesday at a Bear Stearns conference. Looking for an edgeCertainly AT&T could use a big winner. Although it is the largest mobile operator in the U.S. with 62.2 million subscribers, Verizon Wireless has been gaining fast. Verizon Wireless, a joint venture of Verizon Communications Inc. (VZ : verizon communications comNews , chart , profile , moreLast: 43.08-0.43-0.99%
12:07am 06/13/2007
Delayed quote dataAdd to portfolioAnalyst Create alertInsiderDiscussFinancials Sponsored by:VZ43.08, -0.43, -1.0%) and Vodafone Group Plc (VOD : vodafone group plc new spons adr newNews , chart , profile , moreLast: 31.18-0.11-0.35%
12:07am 06/13/2007
Delayed quote dataAdd to portfolioAnalyst Create alertInsiderDiscussFinancials Sponsored by:VOD31.18, -0.11, -0.4%) , has out-gained AT&T by an average of 220,000 customers each quarter since the beginning of 2006. Verizon now has 60.7 million mobile customers. Verizon also generates higher total revenue from its wireless business than AT&T and the company's customers spend more -- $50.73 per Verizon user compared with $49.21 for AT&T, according to data from company reports. Because the iPhone is a data-intensive device -- Web surfing and music playing are two of its most crucial features -- AT&T expects customers who choose the device will spend more each month. Data plans are priced significantly higher than voice-only service. AT&T executives also figure that iPhone users will prove more loyal, helping the company to cut its current churn rate of 1.7%. Churn, a key measure in the wireless business, reflects the percentage of customers who cancel service. Verizon also leads in that category with a 1.08% churn rate. Sizing up AppleRival executives know Apple and its iPhone pose a serious threat. They've even put a positive spin on the device's introduction, saying awareness of the iPhone could create broader consumer demand for handsets that play music or offer speedy connections to the Internet. "We've been anticipating, as the industry has, the coming of the iPhone," Sprint Chief Executive Gary Forsee acknowledged. Added Strigl: "I think they will have a good product. So I don't deny them that." Nonetheless, rival operators and handset makers have expressed skepticism about whether the iPhone will truly shake up a wireless market in which the vast majority of consumers pay less than $100 for the handsets they own. They point to the iPhone's $500 starting price tag and note that consumers would also have to sign up for more costly monthly plans. "It's an expensive device," Forsee said. "If the customer is buying that for music, then we're going to be able to provide very significant alternatives to that at a much cheaper price point." Effect on rivalsIf Forsee's skepticism is misplaced, Sprint (S : Sprint Nextel CorporationNews , chart , profile , moreLast: 21.60-0.40-1.82%
12:07am 06/13/2007
Delayed quote dataAdd to portfolioAnalyst Create alertInsiderDiscussFinancials Sponsored by:S21.60, -0.40, -1.8%) has the most to lose. The company has lost thousands of its best customers over the past year to AT&T and Verizon and its churn rate remains stubbornly high. Since the start of 2006, Sprint has added just 3.56 million net customers, most of whom signed up through less profitable wholesale channels or subscribed to its cheaper prepaid service. In the last three quarters alone, Sprint has lost more than 700,000 highly valued postpaid subscribers -- those on yearly plans who pay their bills at the end of each month. By contrast, Verizon has added 9.4 million net customers during the same period, almost all of them postpaid subscribers signed up directly by the company. AT&T added 8.3 million net customers. Even T-Mobile, the fourth biggest wireless operator in the U.S., has outpaced Sprint by adding 4.3 million net customers over the past five quarters. Verizon is not immune either, but the company's relatively high consumer-satisfaction rating and the perception that it operates a superior network could mitigate losses over the iPhone. But just in case the iPhone proves to be a huge hit, Verizon executives are plotting out their response. "You will see you will see more products from us by year-end, so stay tuned," Strigl said.

That iPhone Has a Keyboard, but It’s Not Mechanical

SAN FRANCISCO, June 12 — If there is a billion-dollar gamble underlying Apple’s iPhone, it lies in what this smart cellphone does not have: a mechanical keyboard.
Skip to next paragraph MultimediaGraphic Compare the iPhone RelatedTimes Topics: iPhoneTimes Topics: Steven P. JobsAs the clearest expression yet of the Apple chief executive’s spartan design aesthetic, the iPhone sports only one mechanical button, to return a user to the home screen. It echoes Steven P. Jobs’s decree two decades ago that a computer mouse should have a single button. (Most computer mice these days have two.) His argument was that one button ensured that it would be impossible to push the wrong button.
The keyboard is built into other phones, those designed for businesspeople as well as those for teenagers. But the lack of a keyboard could be seen as a clever industrial design solution. It has permitted the iPhone to have a 3.5-inch screen. A big screen makes the phone attractive for alternative uses like watching movies and that could open up new revenue streams for Apple and its partner, AT&T.
The downside is that typing is done by pecking on the screen with thumbs or fingers, something hardly anyone outside of Apple has experienced yet. “The tactile feedback of a mechanical keyboard is a pretty important aspect of human interaction,” said Bill Moggeridge, a founder of Ideo, an industrial design company in Palo Alto, Calif. “If you take that away you tend to be very insecure.”
Mr. Jobs and other Apple executives argue that the keyboard that pops up onscreen will be a painless compromise. The iPhone’s onscreen keyboard has a dictionary-lookup feature that tries to predict the word being typed, catching errors as they are made.
That, of course, requires users to learn the new system, a task that Apple executives acknowledge may require several days. Last month at an industry conference, Mr. Jobs dismissed doubts about the decision to rely on a virtual keyboard, saying that users only had to learn to trust the keyboard, “and then you will fly.”
Yet in the days before the phone is scheduled to go on sale at Apple and AT&T stores around the country, designers and marketers of electronic devices centers are having a spirited debate about whether consumers will have the patience to overcome the hurdle that will be required to type without the familiar tactile feedback offered by conventional keyboards.
Apple is making other compromises. The AT&T Edge cellular network transmits data more slowly than those of rivals, but the iPhone will still be equipped with Wi-Fi for Web access. The phone will not accept memory cards.
The keyboard, however, is the biggest worry. At worst, customers will return the products. Currently AT&T gives customers 30 days to return handsets, but it is not clear whether it will maintain that policy for the iPhone. Any significant number of returns of the iPhone could conceivably undermine what until now has been a remarkable promotional blitzkrieg that culminates in the phone’s release June 29.
“There has never been a massively successful consumer device based solely on a touch screen,” warned Sky Dayton, chief executive of Helio, a cellular network service that has recently introduced an innovative handset that integrates Google maps with a G.P.S. system and another feature that physically locates friends using Helio phones.
Palm was successful, he noted, despite requiring the Palm Pilot’s users to enter text with a stylus using its own writing system called Graffiti. But the company eventually retreated and put a mechanical keyboard on its Treo smartphones.
“Texting” is central to an entire generation of people, Mr. Dayton argued, and Apple is taking a risk in not making that a central design feature. “There is a generation of users who are always online and who don’t communicate the way their parents did,” he said. “They’re e-mailing; they’re texting; they’re I.M.-ing.”
To be sure, Apple has had its share of product design hits and misses both under Mr. Jobs’s command and while he was in exile from the computer maker from 1985 to 1997. The Apple III was a well-designed computer, but was undermined by shoddy manufacturing. Several years later, the Lisa, the first commercial PC with a graphical user interface, and an infamously poorly designed “Twiggy” floppy disk drive, generated excitement but failed commercially. More recently, the Apple Cube, which was perhaps Mr. Jobs’s most daring design statement, drew critical praise and few sales.
But the comparison that could haunt the iPhone most comes from the specter of a former Apple chief executive, John Sculley, and his Newton. Billed as the original “personal digital assistant,” the Newton relied on a stylus for entering text. When users fumbled with its character recognition system, the machine went from hype to humiliation.
Although a small team of dedicated Apple engineers ultimately improved the technology, it was too late to save the Newton as a product.
Few industrial designers believe that the iPhone will suffer the Newton’s fate. Indeed, many leading designers argue that even before the iPhone has reached the market, it has changed consumer electronics industry standards irrevocably. Dispensing with a physical keyboard has given software an increased importance over hardware in product design, said Mark Rolston, senior vice president at Frog Design, an industrial design consulting firm.
A result, he said, has been a richer conversation between Frog’s designers and customers because the software presents a much wider range of options for features. “This is great for us because the carriers weren’t listening,” Mr. Rolston said. “They were slightly adjusting the soft-keys.”
Overnight that has changed and that has resulted in significant new business for design companies like Frog. “We’re being engaged by many more customers with more aggressive ideas about what to do,” he said.
Mr. Rolston believes that Mr. Jobs will get away with his gamble. “They took a risk and it’s a bold step for the industry,” he said. “This is a worthwhile risk.”
Indeed, the handful of users outside Apple who have been able to play with the hand-held device report that the quirky company has made an important step forward in the art of controlling computer systems. It may teach a new generation of technology users to use their fingers rather than a mouse — a four-decade-old technology — as a pointing and command device.
Apple’s multitouch technology — which permits control gestures with one or more fingers or thumbs — and which is now also being explored by a variety of other companies, including Microsoft, Hewlett-Packard and others, is a much more direct way to interact with a computer. Software designers have injected virtual “physics” into the user’s experience. For example, sliding a finger along the screen in a directory will cause the index to slide as if it were a piece of paper on a flat surface.
Mr. Jobs’s new phone may resonate with a new kind of mobile user, said Donald A. Norman, a product designer who is co-director of the Segal Design Institute at Northwestern University in Evanston, Ill.
“Apple says, ‘We’re not selling to the person who lives on his BlackBerry, we’re selling to the person who listens to music and surfs the Web,’ ” he said.
And even Mr. Jobs’s competitors are rooting for him to win.
“When I first saw iPhone I was very excited,” said Benjamin Bederson, co-founder and vice president for client technologies at ZenZui, a Seattle-based mobile phone software company, which is commercializing technologies that were developed at Microsoft’s research labs. “It will raise the expectations. I think that consumers have had the central assumption that cellphone experiences are terrible and there’s nothing you can do about it.”


Apple iPhone Accessories by BoxWave Corporation Shipping Before iPhone Release

BELLEVUE, Wash., June 6 /PRNewswire/ -- BoxWave(R) Corporation announces the immediate availability of its Apple iPhone accessories. Ready with a complete line of iPhone accessories before the iPhone is available for public retail sale on June 29, 2007, BoxWave continues its trend of "Bringing You Tomorrow's Products Today."

BoxWave is one of the first major handheld accessories manufacturers and online retailers to produce and release a complete line of iPhone accessories. With a proven track record for creating high quality accessories, BoxWave is fast gaining attention for bringing premium iPhone accessories to market quickly. BoxWave's iPhone accessories have been available for ordering since April 2007 and the company has been fulfilling orders of iPhone ClearTouch(R) screen protectors, iPhone chargers, and iPhone cases for customers who want to protect and enhance their several hundred dollar Apple iPhone investment.

iPhone Will Promote All Smartphones, Exec Says

The iPhone is about to do for smartphones what the iPod did for digital music players: put one in everyone's pocket.

That's the message Warren East, CEO of ARM Holdings PLC, brought to Computex Wednesday in a talk about the future of mobile computing.

The idea of putting computing power into a small device has been around for years. Apple Inc. put out the Newton personal digital assistant (PDA) in the early 1990s, followed by U.S. Robotics with its Pilot (which later became the Palm). Adding computing functions to mobile phones, to create smartphones, happened soon after. Now, demand for Internet access while on the move is making small computing devices even more popular. Even the computer industry has taken up the challenge, with its ultramobile PC.

"This has been an emerging market for a long time," East said in an interview. And the hype surrounding the iPhone will put smartphones in the lead as demand for Internet access at all times takes off, he said.

In fact, he believes that smartphone sales could double this year if the iPhone proves to be the hit that some people expect. Sales will end up close to 200 million units, or double last year's figure, if the iPhone is a hit, East said, because smartphone demand overall will take off. "Within the next few years, smartphones will make up half the mobile phone market," he said.

East stands to gain from such a prediction, of course. ARM processing cores are in around 95 percent of all smartphones, so his company will be a direct beneficiary of the growing market. They are also in certain iPods, leading to speculation that several of its chip designs will end up in iPhones. East declined to comment on the matter, saying Apple prefers to keep such details secret.

Another key to the success of smartphones and other small devices is software. A lot of computing software that works well on a PC has trouble on portable gadgets because of the smaller screen size. Mobile web browsers, for example, don't shrink all Web sites very well. ARM is working with software makers on rewriting their applications to better fit smaller devices, East said.

The ultramobile PC is also an area that East doesn't mind competition from, since ARM processing cores go into them, too. The new product category is also boosting interest in devices such as smartphones, he said. Besides, the mobile industry has an advantage over the computer industry's ultramobile PC: its expertise in power consumption.

Mobile phone makers have worked for years to ensure users have plenty of battery power on their handsets. Companies focused on the ultramobile PC come from a far different background, where power consumption has not been a big issue until recently. That gives the mobile phone industry an advantage, East said.

It won't take long to see if East's predictions are correct. The iPhone will be out in the U.S. around the end of this month. It may end up creating a smartphone craze, as the iPod did for digital music players. At the very least, the much hyped product should spur interest in small computing devices.

"Apple's iPhone... is clearly the most widely anticipated product the industry has seen for years, potentially ever," said Michael Ounjian, a research analyst at Credit Suisse, in a recent report.